Overview

• The Office for Budget Responsibility presented its pre-Budget forecast on Friday, with reports indicating a shortfall in the range of £20bn to £40bn and commonly cited at about £30bn.
• Treasury sources say reductions in asylum-related spending are a priority, with faster hotel closures and tighter access to some support under consideration.
• Home Secretary Shabana Mahmood is working with the Ministry of Defence on using military sites and is exploring disused student accommodation to move people out of hotels.
• Officials say nearly £1bn has already been saved by cutting hotel use, lowering projected hotel costs to about £2.1bn in 2024–25, while the asylum system cost £5.4bn in 2023–24 and NAO estimates put accommodation at £15.3bn over a decade.
• Business groups warn further tax rises would hit hiring and pay, as internal debate continues over whether to hold to pledges not to raise income tax, national insurance or VAT.