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Public finances: evidence and policy appraisals

Detailed research records, alternatives, costs and provisional assessments. These records preserve different scopes and historical reviews; they are not an additional ranked action plan.

Evidence → choices → outcomes

What could improve it?

Services funded at the level Parliament chooses, paid for by tax and borrowing choices that are stated openly and sustainable.

These options link to their national assessment, including funding, delivery constraints and remaining uncertainties.

  • Assessed option · provisional

    Turn investment promises into a deliverable pipeline

    Approved-versus-aspirational status, milestones and completed assets in the infrastructure pipeline.

    8/10 criteria scored

    Coverage of the appraisal, not an impact score.

    Delivery: Amber

    Whole-life costs incomplete

    Evidence and delivery constraints

    Macro modelling and delivery audits support the rationale; they do not evaluate the incremental publication or coordination change.

    Distinguish funded projects from aspirations; sequence resources; name owners and independent assurance; protect maintenance.

    Growth and prosperity listEvidence and assessment

  • Assessed option · provisional

    Collect the tax already due

    8/10 criteria scored

    Coverage of the appraisal, not an impact score.

    Delivery: Amber

    Whole-life costs incomplete

    Evidence and delivery constraints

    Compliance activity can yield revenue; the return from the proposed extra high-wealth focus is not established here.

    Reconcile existing forecast baseline; define cases, staff, legal powers and collection horizon; audit net additional receipts.

    Equality and opportunity listEvidence and assessment

  • Assessed option · provisional

    Close capital-tax reliefs rather than raise rates

    7/10 criteria scored

    Coverage of the appraisal, not an impact score.

    Delivery: Amber

    Whole-life costs incomplete

    Evidence and delivery constraints

    Illustrative rate changes and another party’s design do not cost the proposed relief package. Effects depend on exact reliefs and behaviour.

    Name reliefs, thresholds, interactions and transition; obtain distributional/behavioural costing and administrative assessment.

    Equality and opportunity listEvidence and assessment

  • Assessed option · provisional

    Property and land tax reform

    8/10 criteria scored

    Coverage of the appraisal, not an impact score.

    Delivery: Amber

    Whole-life costs incomplete

    Evidence and delivery constraints

    Modelled designs exist; exact tax base, jurisdiction and transition are not specified.

    Separate council-tax revaluation, land/property tax and transaction-tax changes; model losers and deferral options.

    Equality and opportunity listEvidence and assessment

This domain in the UK SWOT →UK National Action Plan →

How we assessed these options

What would it take to improve this?

Detailed policy appraisal

The outcome we want: Services funded at the level Parliament chooses, paid for by tax and borrowing choices that are stated openly and sustainable.

The main constraint: HM Treasury and Parliament must choose who pays — taxpayers now, service users or future taxpayers — and a debt-interest bill that moves with inflation and Bank Rate narrows those choices; growth effects and forecast headroom are not money that can be spent.

Constraint type: money, public consent, evidence.

The options on the table

What is funded now, and the changes assessed against it — the current baseline and the alternatives, before the position today and the actions.

Provisional single-reviewer assessments from the 6 October 2026 review; not approved business cases, and not government policy.

Assessed with another page as home

These options also bear on this topic. The full assessment sits on the home page named under each.

  • Turn investment promises into a deliverable pipelineDelivery risk: Amber

    Home: Growth & productivity.

    Funded now
    Already government policy: the 10 Year Infrastructure Strategy (June 2025) commits at least £725bn over a decade and launched an online Infrastructure Pipeline in July 2025, updated at least every six months. UK Facts’ addition is to separate approved from aspirational projects on the page and to count completed, used assets rather than announcements.
    The change assessed
    Approved-versus-aspirational status, milestones and completed assets in the infrastructure pipeline.

    Range if completed: 15.0–21.0 out of 30 (equal weights; not yet assessed: expected incremental benefit (Bn), incremental affordability (Co))

  • Collect the tax already dueDelivery risk: Amber

    Home: Follow the money.

    Funded now
    A large package is already funded and running: Autumn Budget 2024 expected £6.5bn a year by 2029–30 from 5,000 extra compliance staff and 1,800 debt-management staff. Later measures raised this: HMRC’s August 2026 update gives £10bn of additional tax revenue a year by 2029–30 and plans for 5,500 new compliance caseworkers (more than 2,400 compliance staff recruited since Autumn Budget 2024). That yield is already in the fiscal forecasts. Any further package beyond it is a UK Facts proposal.
    The change assessed
    Not yet defined.

    Range if completed: 13.0–19.0 out of 30 (equal weights; not yet assessed: expected incremental benefit (Bn), incremental affordability (Co))

  • Close capital-tax reliefs rather than raise ratesDelivery risk: Amber

    Home: Tax options.

    Funded now
    Baseline: CGT rates of 18% and 24% since October 2024; business asset disposal relief rising to 18% from April 2026; a £2.5m allowance for agricultural and business property relief from April 2026. Closing further reliefs instead of raising rates is a UK Facts framing of options, not government policy.
    The change assessed
    Not yet defined.

    Range if completed: 11.0–20.0 out of 30 (equal weights; not yet assessed: increment beyond baseline (Ad), expected incremental benefit (Bn), incremental affordability (Co))

  • Property and land tax reformDelivery risk: Amber

    Home: Tax options.

    Funded now
    Not yet stated in the record.
    The change assessed
    Not yet defined.

    Range if completed: 13.0–19.0 out of 30 (equal weights; not yet assessed: expected incremental benefit (Bn), incremental affordability (Co))

  • Make council and SEND funding risks explicit before promises expandDelivery risk: Amber

    Home: SEND.

    Funded now
    Not yet stated in the record.
    The change assessed
    Build a service-duty, demand, reserves and workforce baseline for exposed councils; appraise settlement choices explicitly.

    Range if completed: 16.0–22.0 out of 30 (equal weights; not yet assessed: expected incremental benefit (Bn), incremental affordability (Co))

Alternatives already on record: 23 options listed under the points in the position today (14 without an action record), and 2 earlier options under other options compared. They have not been scored in the review.

The position today

  • What we can build on (3)
  • What is holding us back (6)The NAO disclaimed its opinion on the Whole of Government Accounts for a third successive year because assurance over English council data remained inadequate. This limits scrutiny of the consolidated accounts; it is not proof that all spending was wasted or that ONS borrowing statistics are invalid. (2024–25 accounts; June 2026 audit · UK consolidated accounts; English council data)
  • What could improve things (2)Pricing the cost of current service standards, and showing tax packages as alternatives with their losers, would make trade-offs explicit before money is committed.
  • What could make it worse (6)

Which quadrant a point sits in is our analytical judgement, not a statistical category. Each point says whether it is a measured fact, our synthesis or a risk.

What we can build on Strengths

What is holding us back Weaknesses

What could improve things Opportunities

What could make it worse Threats

  • Most of the OBR’s unchanged-policy scenarios imply mounting long-term fiscal pressure. The paths depend on growth, ageing, health costs and interest rates; they are conditional projections, not a prediction of bankruptcy on a fixed date.

    Risk, not a certaintyConfidence: Moderate· July 2026 long-term scenarios· United Kingdom

    Source: Office for Budget Responsibility, Fiscal risks and sustainability (July 2026) (July 2026 executive summary and scenario assumptions)

  • Interest costs can jump without any policy change: on OBR sensitivities, 1 point higher RPI inflation adds about £7.0bn in a year and 1 point higher Bank Rate about £7.4bn.

    Risk, not a certaintyConfidence: Moderate

    Source: Office for Budget Responsibility, Economic and fiscal outlook ready-reckoners (consistent with the March 2025 EFO) (Sheet Debt_interest_RR)

    What government has committed to

    Policy: The 2026-27 financing remit cuts inflation exposure in new borrowing: index-linked gilts are 9.3% of planned gilt issuance, and auctions favour short-dated gilts (38.6% of issuance) over long-dated ones (3.2%). The index-linked stock was still 25.2% of wholesale debt at end-2025.

    Who and when:
    Starmer government (to July 2026), 3 March 2026.
    Since 20 July 2026:
    Not confirmed either way since the change of Prime Minister on 20 July 2026. No revision to the 2026-27 remit and no Burnham-era statement on debt management policy was found; the next remit is due with the 2027-28 Debt Management Report.
    Source:
    HM Treasury, Debt Management Report 2026-27 (Paragraphs 2.20–2.22 and 3.11)

    Checked 4 October 2026. A commitment is not delivery.

    Options (3)

    • Keep index-linked issuance low

      Fewer gilts tied to RPI means a smaller rise in interest when inflation jumps; the stock falls only slowly because old index-linked gilts run for decades.

      Who: HM Treasury and the Debt Management Office (annual remit) · Evidence: Expert or audit recommendation · Status: Established

      Source: HM Treasury, Debt Management Report 2026-27 (Paragraphs 2.21–2.22)

    • Lengthen the average maturity of new issuance

      Locking in rates for longer reduces how quickly a Bank Rate rise passes into interest costs, at the price of paying more for long-dated debt today.

      Who: HM Treasury and the Debt Management Office · Evidence: Untested proposal · Status: External proposal

      Source: HM Treasury, Debt Management Report 2026-27 (Paragraph 3.11 (current split by maturity))

    • Hold a fiscal buffer against interest shocks

      Planning to meet the rules with room to spare means a rate or inflation surprise does not force mid-year tax rises or cuts.

      Who: HM Treasury · Evidence: Expert or audit recommendation · Status: Announced proposal

      Source: HM Treasury, Chancellor John Healey delivers speech to Treasury staff (21 July 2026) (“ensuring there’s a buffer also for uncertainty”)

  • On the OBR’s March 2026 forecast, debt interest rises to £137.1bn by 2030–31 — a projection that weaker growth or higher rates would make worse.

    Risk, not a certaintyConfidence: Moderate· March 2026 forecast

    Source: Office for Budget Responsibility, Public finances databank (September 2026); outturn consistent with ONS/HM Treasury Public sector finances, 22 September 2026 (Aggregates (£bn), forecast years (March 2026 forecast))

    What government has committed to

    Target: Meet the fiscal rules at the 28 October 2026 Budget “with a buffer to protect against uncertainty”, and control borrowing to bear down on inflation and long-term pressures.

    Who and when:
    Burnham government (from 20 July 2026), 7 September 2026.
    Since 20 July 2026:
    Made by the current government.
    Source:
    HM Treasury, Chancellor John Healey’s Growth Speech 2026 (7 September 2026) (Paragraph beginning “The Prime Minister and I are in lockstep”)

    Checked 4 October 2026. A commitment is not delivery.

    Options (3)

  • After Budget 2026 the OBR forecasts a £14.5bn margin against the current-budget rule in 2029–30, down from £21.7bn in November 2025 and below the £27.2bn average of earlier forecasts; it puts the chance of meeting the rule at 56%.

    Risk, not a certaintyConfidence: High· October 2026 forecast for 2029–30· United Kingdom

    Source: Office for Budget Responsibility, Economic and fiscal outlook – October 2026 (charts and tables) (Table 7.1; Chart 7.7)

  • The OBR’s October 2026 forecast puts debt interest at £123.9bn in 2026–27, up from £109.4bn in its March forecast, and £160.0bn by 2031–32. It is a forecast that moves with gilt yields, Bank Rate and inflation, not a measured outcome.

    Risk, not a certaintyConfidence: High· October 2026 forecast· United Kingdom

    Source: Office for Budget Responsibility, Economic and fiscal outlook – October 2026 (charts and tables) (Table 5.8; paragraph 5.29)

  • The OBR forecasts spending inside the welfare cap at £207.0bn in 2029–30, £2.8bn above the cap, against a £1.9bn margin in November 2025.

    Risk, not a certaintyConfidence: High· October 2026 forecast for 2029–30· United Kingdom

    Source: Office for Budget Responsibility, Economic and fiscal outlook – October 2026 (charts and tables) (Table 7.1 (welfare cap))

The actions worth examining

Our shortlist for this page. Research quality, policy status, cost and funding are judged separately; none of these is government policy unless its status says so.Our shortlist. None is government policy unless its status says so.

  1. Show tax choices with their real trade-offs — not a direct public-spending programme
  2. Tie spending decisions to realistic outcomes and costs — not yet costed / funding not identified
  3. Publish one funding ledger across all action plans — not a direct public-spending programme

  • Action 1A21Policy status: external proposal

    Show tax choices with their real trade-offs

    Publish a few fully specified tax packages on one baseline and price year, showing net yield after behaviour and administration, who pays, and what each could fund — as alternatives, not a shopping basket.

    The thread: issue, evidence, action

    1. Issue Weakness: Debt interest was £108.9bn in 2025–26, 8.8% of public-sector receipts, and the state borrowed £134.3bn; debt stood at 93.3% of GDP. Also: opportunity
    2. Evidence Public sector net borrowing; Debt interest, share of public-sector receipts
    3. Action A21, this action

    Assessment (draft, 6 October review)

    Not assessed in the 6 October review; this action stays in the topic plan with its own evidence.

    Who decides:
    HM Treasury and Parliament (Finance Act); HMRC (collection); devolved governments for devolved taxes (UK)
    Evidence:
    Modelled scenario. HMRC and IFS costings are modelled estimates of specified changes; behaviour and interactions make larger packages uncertain.
    Expected effect:
    Direction plausible; size not established.
    Cost and funding

    Not yet costed

    Funding: Not a direct public-spending programme

    Why it is shortlisted here: Tax is the largest lever on this page; showing packages as alternatives with their losers prevents the same receipts being counted twice.

    What it takes
    The problem

    Revenue estimates use different baselines, years and behavioural assumptions, so headline billions are added up as if they were compatible and free of losers.

    Who is affected, and where

    UK taxpayers (households and businesses) and users of the services the receipts would fund. Territory: UK. Most taxes are UK-wide; Scotland sets income tax rates and bands, and Wales part of income tax; property and land taxes are devolved — packages must say which apply where.

    Policy status

    Proposed by researchers or others, not government policy. Tax rises are not committed beyond those already legislated. The IFS sets out options; UK Facts publishes them as alternatives. Budget 2025 (26 November 2025) changed the baseline, so earlier option costings need updating.

    The evidence
    What the research found:
    HMRC’s ready reckoner puts +1p on the basic rate of income tax at about £8.25bn in 2027–28, while +10 points on the higher rate of capital gains tax loses about £2.1bn. The IFS finds broad-based rates the most straightforward way to raise large sums, and warns that behavioural responses, interactions and devolved arrangements change net yields.
    Evaluated on:
    UK tax base in HMRC and IFS models; United Kingdom, 2025–2030 forecast period
    Our recommendation (separate from the research):
    Show each package on one baseline and price year as an alternative, with who pays, net yield and the service it could fund; never add incompatible ready-reckoner lines.
    Strongest counter-evidence:
    Higher taxes reduce household and business incomes and can weaken incentives; mobile bases such as capital gains respond strongly; manifesto commitments limit which rates can rise.
    Effects on record
    • Household and business incomes after tax: A cost or harm; size not established. modelled, moderate confidence; United Kingdom. Who pays depends entirely on the package; the benefit side depends on what the receipts fund, counted once.
    Cost and funding

    Cost completeness: Not yet costed. Funding: Not a direct public-spending programme.

    • Modelling and publication of specified tax packages; HMRC administration of any change (administration; paid by central government): Not yet costed. The tax itself is paid by households and firms and is not a cost line here. HMRC ready-reckoner yields cannot be added together.
    Who pays:
    Taxpayers bear any tax rise (households, employers and, through prices and wages, workers and consumers); HMRC bears administration; publishing the packages costs analytical time.
    Financing proposed:
    Not a financing source until legislated and in the forecast. A package’s receipts can fund one use once.
    Gap remaining:
    Not applicable: this is a choice of who pays, not a spending line. Modelling capacity is not costed.
    What delivery needs
    Skills:
    Tax modelling (HMRC, OBR, independent researchers).
    Operational capacity:
    HMRC systems for any new base.
    Infrastructure:
    None for rate changes on existing taxes.
    Permissions:
    None.
    Law:
    Finance Act for any change.
    Public consent:
    A parliamentary vote; manifesto commitments.
    First step and stages

    First step: Choose a defined package and price year, then publish reproducible assumptions and who pays. (owner: HM Treasury (or UK Facts for illustrative packages))

    1. Specify packages on one baseline — HM Treasury / independent modellers (proposed stage, not an official timetable)
    2. Consult and legislate — Parliament (proposed stage, not an official timetable)
    3. Collect and compare outturn with the costing — HMRC; OBR (proposed stage, not an official timetable)

    Depends on: A47: each receipt counted once in the ledger; An up-to-date post-Budget baseline

    Trade-offs
    Who gains and who loses:
    Depends entirely on the tax: broad rates fall on most workers or consumers; capital taxes on wealthier households; business taxes partly on workers and customers.
    What else the money or effort could do:
    Raising tax for one service rules out using the same receipts for another or for reducing borrowing.
    Strongest counterargument:
    Spending restraint or growth could close gaps without tax rises; tax rises can weaken growth.
    Risks:
    Avoidance, volatile receipts and hidden burdens on groups not obvious from the headline rate.
    How we would judge it
    Baseline:
    Public sector current receipts £1,231.3bn in 2025–26 (OBR databank).
    Leading indicator:
    Packages published with one baseline and distributional tables.
    Outcome:
    Net receipts against costing; incidence across households and firms; compliance costs.
    Continue, adapt or stop:
    Revisit a package when outturn falls materially short of its costing.
    Earlier option on this page

    This card replaces the option “Raise more in tax” (external option). Its evidence: HMRC publishes costings for illustrative changes — for example on its Spring Statement 2025 baseline and an April 2026 start, 1p on basic-rate income tax raises £8.2bn in 2028–29 and 1 percentage point on employer National Insurance £11.55bn in that year. These include some behavioural response but are not full policy costings; larger changes have proportionately larger behavioural effects. HMRC, Direct effects of illustrative tax changes (June 2025)

    Sources

    Source published October 2025 (IFS); June 2025 (HMRC); evidence reviewed 2026-10-04. Reconsider if: A Budget changes the tax baseline; HMRC publishes a new ready reckoner.

    Also on: Revenue options — one shared record, so its cost is counted once.

  • Action 2A20Policy status: site-editorial action

    Tie spending decisions to realistic outcomes and costs

    Publish the cost of keeping present service standards and the outcome each budget is meant to buy, so reallocations name what is cut and what is gained, then compare forecasts with outturn.

    The thread: issue, evidence, action

    1. Issue Weakness: Those totals say how tight the budget is, not which spending is least valuable: the NAO finds spending decisions short-term and reactive, with evaluation too rarely used. Also: weakness, opportunity
    2. Evidence Public sector net borrowing
    3. Action A20, this action

    Assessment (draft, 6 October review)

    Who decides:
    HM Treasury and departments; Parliament (Estimates) (UK)
    Evidence:
    Expert or audit recommendation. Audit and appraisal guidance recommend the approach; no evaluation shows that it saves a stated sum.
    Expected effect:
    Direction plausible; size not established.
    Cost and funding

    Not yet costed

    Funding: Not yet costed / funding not identified

    Why it is shortlisted here: Restraint and reallocation already happen at every Spending Review; this makes the service forgone visible.

    What it takes
    The problem

    Spending decisions are short-term and reactive, and debt interest and borrowing limit choices without saying which spending is least valuable.

    Who is affected, and where

    Users of public services and taxpayers across the UK. Territory: UK. Applies to UK departments; devolved governments set their own budgets within block grants, not assessed here.

    Policy status

    UK Facts proposal. Builds on existing practice: Spending Review 2025 set departmental budgets to 2028–29 and the Green Book (2026) and NAO recommend realistic costs and evaluation. A published “cost of current standards” baseline for each service is a UK Facts proposal.

    The evidence
    What the research found:
    The NAO found a short-term, reactive approach with no cultural shift to long-term value for money, and recommended annual departmental and cross-cutting delivery plans and publication of completed evaluations.
    Evaluated on:
    UK central government spending reviews, 1998–2024; NAO audit synthesis
    Our recommendation (separate from the research):
    Publish service baselines and the cost of maintaining standards before each spending review; name the budget reduced whenever money is reallocated.
    Strongest counter-evidence:
    Planning documents can become paperwork; targets invite gaming; services whose savings are easy to measure may be cut ahead of more valuable ones.
    Cost and funding

    Cost completeness: Not yet costed. Funding: Not yet costed / funding not identified.

    • Analytical and delivery capacity to publish service baselines and outcome measures (administration; paid by central government): Not yet costed. Existing staff time has an opportunity cost. Cash-releasing savings must be shown separately from service improvements.
    Who pays:
    HM Treasury and departments (analytical and delivery staff time).
    Financing proposed:
    None. No automatic savings are assumed; any reprioritisation must name the budget reduced and the service forgone.
    Gap remaining:
    Unknown: analytical capacity has not been costed.
    What delivery needs
    Skills:
    Analysts, evaluators and finance staff.
    Operational capacity:
    Consistent cost and outcome data across departments.
    Infrastructure:
    None beyond data systems.
    Permissions:
    None.
    Law:
    None required.
    Public consent:
    Ministers accepting published trade-offs.
    First step and stages

    First step: Publish consistent baselines and the cost of maintaining present service standards for the next planning cycle. (owner: HM Treasury)

    1. Agree service baselines and outcome measures — HM Treasury and departments (proposed stage, not an official timetable)
    2. Use them in the next spending review — HM Treasury (proposed stage, not an official timetable)
    3. Compare forecasts with outturn each year without rewriting the baseline — HM Treasury; NAO (proposed stage, not an official timetable)

    Depends on: A47: one ledger of costs and funding; Departmental evaluation capacity

    Trade-offs
    Who gains and who loses:
    Services with weak outcome data risk losing out; users of high-value but hard-to-measure services need protection.
    What else the money or effort could do:
    Analytical time spent on baselines is not spent on policy development.
    Strongest counterargument:
    Spending choices are political; better data cannot settle which outcomes matter most.
    Risks:
    Gaming, optimistic assumptions and cutting what is easy to measure.
    How we would judge it
    Baseline:
    Debt interest £108.9bn and borrowing £134.3bn in 2025–26 (OBR databank).
    Leading indicator:
    Share of departmental budgets with published baselines and outcome measures.
    Outcome:
    Forecast-versus-outturn gaps in cost and outcomes; maintenance backlogs.
    Continue, adapt or stop:
    Review if published baselines are not used in allocation decisions within one spending review.
    Earlier option on this page

    This card replaces the option “Reprioritise or restrain spending” (operating: Departmental budgets to 2028–29 were set at the June 2025 Spending Review.). Its evidence: The 2010s offer an evaluated example: IFS found English councils’ central funding fell 46% in real terms, and per-person spending on culture, housing, planning and transport fell by over 40% while statutory services were protected. This records uneven reductions in service spending, not a causal estimate of how much that restraint changed national borrowing. IFS, How have English councils’ funding and spending changed? 2010 to 2024 (Report R318) · HM Treasury, Spending Review 2025 (11 June 2025)

    Sources

    Source published October 2024 (NAO); February 2026 (Green Book); evidence reviewed 2026-10-04. Reconsider if: The next spending review; New NAO work on spending frameworks.

    Also on: /government — one shared record, so its cost is counted once.

  • Action 3A47Policy status: site-editorial action

    Publish one funding ledger across all action plans

    Connect every action to unique cost and funding records with years, price basis and status, so totals are shown only when compatible and gaps stay visible.

    The thread: issue, evidence, action

    1. Issue Opportunity (/policy-impact): Validating the existing labs and linking every model to the same funding ledger as the action plans would let users compare options on one set of cost records. (private preview)How acting here reaches it: One ledger across every action plan lets the costs on this page and the policy labs count each cost once, so the trade-offs priced here are not double-counted elsewhere.
    2. Evidence Withdrawn workbench models meeting the publication standard (private preview)
    3. Action A47, this action

    Assessment (draft, 6 October review)

    Not assessed in the 6 October review; this action stays in the topic plan with its own evidence.

    Who decides:
    UK Facts editorial and data team; policy owners remain responsible for their own commitments (UK)
    Evidence:
    Expert or audit recommendation. An accounting control grounded in official appraisal guidance; not an intervention with an economic return.
    Expected effect:
    Direction plausible; size not established.
    Cost and funding

    Not yet costed

    Funding: Not a direct public-spending programme

    Why it is shortlisted here: An accounting control for this site: every action’s cost and funding counted once, with gaps left visible.

    What it takes
    The problem

    Proposals often count the same money twice, add incompatible figures or treat tax proposals and growth effects as money in the bank.

    Who is affected, and where

    Readers of UK Facts, including journalists, officials and voters. Territory: UK. Covers every action on the site, whichever nation it applies to.

    Policy status

    UK Facts proposal. Implemented on this site in October 2026 as the policy-plan ledger, with automatic checks for duplicate allocation, invalid funding labels and incompatible totals.

    The evidence
    What the research found:
    The Green Book separates social value from affordability and requires attention to additionality and optimism bias; the NAO recommends realistic costs and published plans.
    Evaluated on:
    Not applicable; This website
    Our recommendation (separate from the research):
    Validate before showing any total; refresh with each Budget or policy update; keep unknowns unknown, never zero.
    Strongest counter-evidence:
    A neat ledger can imply more certainty than exists; it cannot judge whether a policy is worth doing.
    Cost and funding

    Cost completeness: Not yet costed. Funding: Not a direct public-spending programme.

    • UK Facts ledger implementation and maintenance (administration; paid by UK Facts): Not yet costed. Site budget; no public money. Policy totals are inherited from the records, never created from generic assumptions.
    Who pays:
    UK Facts (editorial and development time).
    Financing proposed:
    The site’s own budget; no public money.
    Gap remaining:
    Not applicable to public funding; site time is not separately costed.
    What delivery needs
    Skills:
    Data and editorial staff.
    Operational capacity:
    Refresh after each fiscal event.
    Infrastructure:
    The site’s validation suite.
    Permissions:
    None.
    Law:
    None.
    Public consent:
    None.
    First step and stages

    First step: Record periods, price bases, amounts or ranges, allocation, conditions and existing uses for every cost on the site. (owner: UK Facts data team)

    1. Validate records before publishing totals — UK Facts
    2. Refresh after each Budget or Spending Review — UK Facts (proposed stage, not an official timetable)

    Depends on: Every domain action’s cost records

    Trade-offs
    Who gains and who loses:
    Readers gain clearer information; no direct distributional effect.
    What else the money or effort could do:
    Editorial time not spent on other pages.
    Strongest counterargument:
    Official bodies (OBR, departments) already publish costings; a site ledger can duplicate them.
    Risks:
    Spurious certainty; missing data shown as zero (guarded against by validation).
    How we would judge it
    Baseline:
    Duplicate allocations and unmatched years flagged by the validator.
    Leading indicator:
    Share of actions with complete cost and funding records.
    Outcome:
    Traceable evidence for every figure; unresolved gaps visible.
    Continue, adapt or stop:
    Never publish a combined total while any material cost is unknown.
    Sources

    Source published February 2026 (Green Book); October 2024 (NAO); evidence reviewed 2026-10-04. Reconsider if: A Budget or Spending Review; A new domain plan is added.

    Also on: /policy-impact (private preview) — one shared record, so its cost is counted once.

Decision brief

  • Paying for £8bn a year: compare a tax rise, a spending cut and more borrowing on one baseline

The leading option set out as a decision someone could take: who decides, who benefits, the best evidence, cost and funding, and the main trade-off. The full research record is one click away.

Decision briefPublic-policy proposalReviewed 2026-10-04

Paying for £8bn a year: compare a tax rise, a spending cut and more borrowing on one baseline

The thread: issue, evidence, action

  1. Issue Weakness: Debt interest was £108.9bn in 2025–26, 8.8% of public-sector receipts, and the state borrowed £134.3bn; debt stood at 93.3% of GDP. Also: opportunity
  2. Evidence Public sector net borrowing; Debt interest, share of public-sector receipts
  3. Action Show tax choices with their real trade-offs
Decision required
Before any new recurring commitment of about £8bn a year is made, HM Treasury sets out three ways to pay for it on the same OBR baseline and price year — 1p on the basic rate of income tax, a named reduction in departmental spending, or extra borrowing — with who pays, what is given up and how the cost recurs.
Who and where
UK taxpayers and users of the public services a commitment or a cut would affect. Applies in: UK.
Accountable body
HM Treasury
Intervention
Set out tax, spending and borrowing routes for the same recurring sum on one baseline and price year.
Best evidence, and where it applies
HMRC’s June 2025 ready reckoner: 1p on the basic rate raises about £6.9bn in 2026–27 and £8.25bn in 2027–28; the IFS finds broad-based rates the most straightforward way to raise large sums.Studied in: UK tax base in HMRC’s models (2026–27 to 2028–29 (forecast years, OBR March 2025 baseline)).
Extra cost of this change
Capital: none identified in the brief.Recurring: Modelling and publication of the three routes; HMRC administration of any tax change — Not yet costed.
Funding
Mainly a legal or regulatory change: administration costs still need a budget.Committed to this change: none.Possible source, not an award: none identified.Unfunded: None for the analysis; the commitment itself remains unfunded until one route is chosen and legislated.
Savings and wider benefits
Not yet specified: no cashable saving or avoided cost has been costed for this change. Expected outcomes are listed one by one in the research appendix and are never added together or counted as money available.
First 90-day step
A three-route comparison published alongside the 28 October 2026 Budget for each new recurring commitment of this sizeThe proposed first milestone; a 90-day date is not yet specified. Owner: HM Treasury. Proposed by UK Facts, not an official deadline.
Twelve-month milestone
Not yet specified.Time to a first useful result: At the Budget; outturn against the costing after the first full tax year.
Outcome, and when to scale or stop
Measure: Whether the Budget publishes the alternatives and names the budget that would be reduced.Scale if: Outturn is close to the costing and the chosen route’s losers were identified in advance.Stop if: A route is relied on twice for different commitments — the ledger then counts it once and shows the other commitment as unfunded.
Main trade-off
Each route has a loser: basic-rate taxpayers now, users of the service that is cut, or future taxpayers through higher debt interest.
Source and review date
Direct effects of illustrative tax changes (June 2025) (24 June 2025); Options for tax increases (IFS Green Budget 2025 chapter) (October 2025). Reviewed 2026-10-04.

An editorial proposal by UK Facts for discussion, not government policy. Records: A21 · effects E-A21-INCOMES · costs C-A21-MODELLING

Research appendix: study design, effect sizes and limits, alternatives, full costing, international comparisons and how we would know

1.The change, in plain words

Paying for £8bn a year: compare a tax rise, a spending cut and more borrowing on one baseline

2.The decision requested

Decision
At the 28 October 2026 Budget, publish for any new recurring commitment of this size the three financing routes side by side on the OBR baseline — tax (1p on the basic rate), a named departmental reduction, or borrowing — with incidence, recurring cost and the alternative given up, and choose one.
Accountable institution
HM Treasury
Geography
UK
Powers
Finance Act for any tax change (Scotland sets its own income tax rates and bands, and Wales part of income tax); Supply Estimates for spending; borrowing within the fiscal rules set in the Charter for Budget Responsibility.
Delivery partners
HMRC (costing and collection); Office for Budget Responsibility (certification); Spending departments (named reductions); Devolved governments (Barnett consequences)

3.Who it is for, and what changes beyond today

Target population
UK taxpayers and users of the public services a commitment or a cut would affect.
Eligibility
Any new recurring commitment of about £8bn a year from 2027–28 — the published yield of 1p on the basic rate — used as a common unit, not as a forecast need.
Scale
£8.25bn a year in 2027–28 (and £8.2bn in 2028–29) on HMRC’s published estimate.
Baseline
Debt interest was £108.9bn in 2025–26 (OBR databank). HMRC ready reckoner (June 2025): 1p on the basic rate raises £6.9bn in 2026–27, £8.25bn in 2027–28 and £8.2bn in 2028–29, after the behavioural responses HMRC models; OBR sensitivities: 1 point higher gilt yields add about £1.5bn to debt interest in the first year and £2.7bn the next.

Source: Office for Budget Responsibility, Public finances databank (September 2026); outturn consistent with ONS/HM Treasury Public sector finances, 22 September 2026 (Aggregates (£bn)); HM Revenue and Customs, Direct effects of illustrative tax changes (June 2025) (Publication_Format sheet, row 6 (basic rate)); Office for Budget Responsibility, Economic and fiscal outlook ready-reckoners (consistent with the March 2025 EFO) (Sheet Debt_interest_RR)

Change beyond existing law or funding
Budgets already publish costings line by line, and the ready reckoner already exists. What is missing is the comparison of the alternatives for the same money on one baseline, naming the spending that would be cut and the interest cost of borrowing instead.

4.How it would work

Do: Set out tax, spending and borrowing routes for the same recurring sum on one baseline and price year Changing: so that the choice of who pays — taxpayers now, service users or future taxpayers — is explicit and the receipts are counted once

  • Lower disposable income for the taxpayers a tax route targets (basic-rate payers for 1p on the basic rate)

    Modelled, not observedEffect record E-A21-INCOMES

    HMRC and IFS costings are modelled; the distribution depends on the tax chosen and on the devolved position.

  • Less service from the departmental budget reduced, if the spending route is chosen

    Hypothesis to test

    Depends on which budget is named; no general estimate exists.

  • Higher future debt interest, if the borrowing route is chosen

    Hypothesis to test

    The size depends on gilt yields at the time; OBR sensitivities show how much interest moves with rates.

Outcomes are kept separate and never added into one impact figure.

5.Best evidence

  • Direct effects of illustrative tax changes (June 2025)

    Author or institution:
    HM Revenue & Customs
    Published:
    24 June 2025
    Evaluation period:
    2026–27 to 2028–29 (forecast years, OBR March 2025 baseline)
    Design:
    Modelled costing of small illustrative tax changes, including modelled behavioural responses
    Sample or population:
    UK tax base in HMRC’s models
    Effect and uncertainty:
    1p on the basic rate: £6.9bn (2026–27), £8.25bn (2027–28), £8.2bn (2028–29). For comparison, 1 point on employee National Insurance £5.3bn and 1 point on VAT £9.2bn in 2027–28.
    Limits:
    Illustrative and approximately linear only for small changes; the baseline predates later fiscal events; lines cannot be added together.

    Where: Publication_Format sheet, rows 6–9, 26 and 76. Affiliation is provenance, not proof of quality.

  • Options for tax increases (IFS Green Budget 2025 chapter)

    Author or institution:
    Institute for Fiscal Studies (Green Budget 2025)
    Published:
    October 2025
    Evaluation period:
    Forecast period to 2029–30
    Design:
    Analysis of tax options using published costings
    Sample or population:
    UK tax system
    Effect and uncertainty:
    Broad-based rates are the most straightforward way to raise large sums; behavioural responses, interactions and devolved arrangements change net yields.
    Limits:
    An independent think tank’s assessment; it does not compare against named spending cuts.

    Where: Key findings. Affiliation is provenance, not proof of quality.

6.Alternatives, counter-evidence and who loses

Closest feasible alternative
Spread the cost: a smaller tax rise plus some borrowing, or reprioritise within existing departmental totals without naming the budget cut.
Strongest counter-evidence
Higher taxes reduce household incomes and can weaken incentives; spending restraint or growth could close gaps without tax rises; manifesto commitments rule out some rates.

Source: Institute for Fiscal Studies, Options for tax increases (IFS Green Budget 2025 chapter) (Key findings); National Audit Office, Lessons learned: a planning and spending framework that enables long-term value for money (HC 234, Session 2024-25) (Summary paragraph 11)

Distributional effects
Tax route: most workers and pensioners with income above the personal allowance pay, but not the lowest earners; spending route: users of the service cut, often lower-income households; borrowing route: future taxpayers, and today’s budgets through higher interest.
Main downside
Showing the alternatives side by side makes every option visibly costly, which can delay a decision that has to be made anyway.

The options compared, including current policy

  • The proposal

    Tax route: 1p on the basic rate of income tax

    Who is reached
    Basic-rate taxpayers pay (the Scottish and Welsh positions differ)
    Evidence
    HMRC ready reckoner (modelled)
    Likely outcome and timing
    About £8.25bn in 2027–28 if legislated for April 2027
    Cost and funding
    Receipts, not spending; administration small
    Main trade-off
    Lower take-home pay for most workers; manifesto constraint

  • Alternative

    Spending route: reduce a named departmental budget by the same amount

    Who is reached
    Users of the service reduced
    Evidence
    NAO: savings rarely evaluated; service effects depend on the budget
    Likely outcome and timing
    From the next Spending Review year
    Cost and funding
    No new money; cost falls on service users
    Main trade-off
    Hard-to-measure services risk being cut first

  • Alternative

    Borrowing route: finance the commitment with extra borrowing

    Who is reached
    Future taxpayers
    Evidence
    OBR debt-interest sensitivities
    Likely outcome and timing
    Immediate; interest cost grows each year the borrowing continues
    Cost and funding
    Debt interest, sensitive to gilt yields
    Main trade-off
    Uses fiscal headroom and raises exposure to rate rises

  • Current policy

    Current practice: costings published line by line, alternatives not compared

    Who is reached
    Same
    Evidence
    Budget scorecards
    Likely outcome and timing
    No change
    Cost and funding
    Existing Treasury time
    Main trade-off
    The forgone alternative is invisible

7.What other countries or the devolved nations show

No comparable evaluation found.

Searched: Evaluations of budget-presentation rules that require financing alternatives for new commitments: OECD budgeting reviews; the Netherlands’ coalition expenditure frameworks and CPB analysis; Sweden’s expenditure ceilings; independent fiscal institutions’ costing roles (OBR, Irish Fiscal Advisory Council).

Next step: Record, for each new recurring commitment in the 28 October 2026 Budget, whether a financing route and the alternative given up were published, and compare outturn with the costing in later years.

8.What delivery needs first

  • data — An up-to-date post-Budget baseline and a refreshed ready reckoner; the June 2025 figures predate later fiscal events. (Requirement; owner: HMRC and OBR)
  • law — A Finance Act for the tax route; a parliamentary vote on Estimates for the spending route. (Genuine veto: nothing proceeds without it; owner: Parliament)
  • public consent — Manifesto commitments limit which tax rates can rise, which may rule out the tax route as specified. (Genuine veto: nothing proceeds without it; owner: HM Treasury and the Cabinet)

9.What it would cost

How the cost is built up: Treasury, HMRC and OBR analytical time per fiscal event. The £8.25bn is the money being financed, not a cost of this proposal; the tax is paid by households.

  • Modelling and publication of the three routes; HMRC administration of any tax change

    UK fiscal packages on one baseline and price year

    Not yet costed (ledger C-A21-MODELLING)

    recurring; price year not stated; Each fiscal event; Not yet established

10.Who pays, and what is missing

Programme envelope (a possible route, not an award)
None identified
Allocation committed to this change
None
Remaining gap
None for the analysis; the commitment itself remains unfunded until one route is chosen and legislated.
Proposed financing
This is the financing decision itself. Receipts from a tax route can pay for one commitment once; borrowing is not a funding source but a deferral to future taxpayers.
Responsible payer
households, central government
Budget displaced
Spending route: the named departmental budget. Tax route: households’ disposable income. Borrowing route: future budgets through higher debt interest.

11.First milestone and time to a useful result

A three-route comparison published alongside the 28 October 2026 Budget for each new recurring commitment of this size (Owner: HM Treasury. Proposed by UK Facts, not an official deadline.)

Time to first useful result: At the Budget; outturn against the costing after the first full tax year.

What could delay it: The Budget makes no new recurring commitment of this size HMRC does not republish the ready reckoner on the new baseline

12.How we would know

Baseline
Debt interest £108.9bn (2025–26); 1p basic rate £8.25bn (2027–28, HMRC June 2025).
Comparison
Each route’s costing against outturn: receipts collected, service levels in the budget reduced, or debt interest paid.
Leading indicator
Whether the Budget publishes the alternatives and names the budget that would be reduced.
Follow-up
Each subsequent fiscal event and the OBR’s forecast evaluation report.
Continue if
Outturn is close to the costing and the chosen route’s losers were identified in advance.
Adapt if
Receipts or savings fall short of the costing: re-cost on the new baseline before relying on them again.
Stop if
A route is relied on twice for different commitments — the ledger then counts it once and shows the other commitment as unfunded.
Thresholds
Not yet set: No published business case defines an acceptable shortfall; the OBR’s forecast evaluation is the comparison.

What is not yet known, and how to find out

  • What the three-route analysis costs per fiscal event (cost)Next step: Treasury to estimate analyst time from its existing scorecard process.Scope: Each new recurring commitment above the chosen size · Data or quotes needed: Analyst days per costing · Who can estimate it: HM Treasury
  • The debt-interest cost of borrowing £8bn a year on the latest baseline (data)Next step: Read the OBR ready reckoner’s borrowing line (the units of the published £10bn line need confirming) or ask the OBR; held until confirmed.
  • How receipts would differ in Scotland and Wales (data)Next step: Use HMRC and devolved costings for the devolved rates before publishing incidence by nation.

Sources last checked 4 October 2026 · Owner: Evidence editor (James Harris) · Next check: ONS public sector finances, UK: September 2026 (21 October 2026) or the first trigger: The next UK Budget, Spending Review or other fiscal event (no date confirmed when reviewed).

More decision briefs on other pages

What it would take

The order things have to happen in, who pays, and the effects and appraisals on record.

The order things have to happen in

  1. First, the prerequisite

    Publish service baselines and the cost of current standards

    Owner: HM Treasury and departments

    No date: the timing depends on the steps before it.

  2. Then, the decision

    Choose between specified tax and spending packages on one baseline

    Owner: HM Treasury; Parliament (Finance Act and Estimates)

    No date: the timing depends on the steps before it.

  3. Then, delivery

    Legislate, collect and allocate; record each line once in the ledger

    Owner: HMRC, departments; UK Facts for the site ledger

    No date: the timing depends on the steps before it.

  4. Finally, the measured outcome

    Outturn compared with costings and service measures

    Owner: OBR, ONS, NAO

    No date: the timing depends on the steps before it.

Who pays, and what is still missing

Cost, committed funding and the remaining gap for the same scope and years. A programme envelope is not an award to a project; a proposal is not committed money. None of these costs has been established yet, so no total is shown.

Cost and funding ledger

  • Modelling and publication of specified tax packages; HMRC administration of any change

    A21 · administration · not costed

    Amount
    Not yet costed
    Who pays
    central government
    Committed
    None identified
    Proposed, not committed
    —
    Gap
    Not established

  • Analytical and delivery capacity to publish service baselines and outcome measures

    A20 · administration · not costed

    Amount
    Not yet costed
    Who pays
    central government
    Committed
    None identified
    Proposed, not committed
    —
    Gap
    Not established

  • UK Facts ledger implementation and maintenance

    A47 · administration · not costed

    Amount
    Not yet costed
    Who pays
    UK Facts
    Committed
    None identified
    Proposed, not committed
    —
    Gap
    Not established

“Not yet costed” means no defensible cost has been found — not that the action is free. Lifetime benefits, benefit-cost ratios and forecast savings are never shown here as money available to spend.

Effects on record, with evidence ratings (1 record)

What the evidence says each action changes

Effects on record — these measure different outcomes, so they are not drawn on one scale
ActionOutcome and areaEffectCompared withEvidence
Show tax choices with their real trade-offsHousehold and business incomes after tax Poverty and inequality · harmSize not established—modelled; moderate confidence; United KingdomWho pays depends entirely on the package; the benefit side depends on what the receipts fund, counted once.

How we would know

Debt interest, share of public-sector receipts; Public sector net borrowing; Public sector net debt.

The outcome measures to watch. A baseline is where we start, not a target; where there is no official target we say so.

Where the ideas come from

Research, counter-evidence and methods (10 sources; 1 claim held back)

Counter-evidence and criticism

  • Show tax choices with their real trade-offs: Higher taxes reduce household and business incomes and can weaken incentives; mobile bases such as capital gains respond strongly; manifesto commitments limit which rates can rise. (Institute for Fiscal Studies)
  • Tie spending decisions to realistic outcomes and costs: Planning documents can become paperwork; targets invite gaming; services whose savings are easy to measure may be cut ahead of more valuable ones. (National Audit Office)
  • Publish one funding ledger across all action plans: A neat ledger can imply more certainty than exists; it cannot judge whether a policy is worth doing. (HM Treasury)

Claims held back

  • A thin forecast margin (headroom) can be overwhelmed by interest, demographic and growth shocks (brief threat, cited to the page) — The headroom figure in the March 2026 forecast was not re-checked in this review. Needed: Read the OBR March 2026 Economic and fiscal outlook headroom table; the threat is shown instead through the OBR’s interest-rate sensitivities.

“Full text checked” means we read the report itself; “relevant passages” means the sections behind each figure; “summary or abstract only” means we could not read the full study, so no number from it is published here without another source.

Other options compared — not on the shortlist (2)

Other options compared

Options from earlier work on this page that are not on the shortlist. They remain valid choices; their evidence is shown as before.

  • capacityStatus: external option

    Raise the growth rate

    Aims to:
    Higher GDP, which raises receipts and lowers the debt ratio without rate rises.
    How:
    Investment, planning, skills and productivity policies raise output; a larger economy raises tax receipts and shrinks debt relative to GDP.
    Who decides:
    HM Treasury and every growth-facing department; the OBR judges the effect for forecasts.
    Main constraint:
    Productivity growth has been weak since 2008 across advanced economies; effects take years to appear.
    Evidence:
    Limited evidence — plausible mechanism, little direct evaluation
    See the trade-offs and evidence
    What the evidence shows
    The arithmetic is well established: the OBR’s fiscal risks work shows debt ratios are very sensitive to the gap between interest rates and growth. Evidence that specific policies reliably raise trend growth is much weaker.
    Resources
    Varies by policy; public investment needs capital budgets.
    Consent and decisions needed
    Depends on the policy (planning reform, migration, investment).
    Time
    Years to a decade; the OBR usually phases in supply-side effects over its five-year forecast.
    Cost and yield
    Not a single costed option; see the growth pages for individual policies.
    Trade-offs and who pays
    Policies that may raise growth (more housebuilding, more migration) carry their own local and political costs.
    How we would know it worked
    Leading indicator: Business investment and productivity growth. Outcome: Trend growth and the debt ratio in successive OBR forecasts. It would not be working if: Growth forecasts are revised down despite the policies.
  • preventionStatus: operating

    Reduce exposure to interest-rate and inflation shocks

    Aims to:
    A debt interest bill less sensitive to inflation and short-term rates.
    How:
    Issue fewer index-linked gilts so inflation spikes add less to interest; manage the maturity of new issuance; the Bank of England’s pace of selling its gilts (quantitative tightening) affects the net cost of the APF.
    Who decides:
    HM Treasury and the Debt Management Office (issuance remit); Bank of England Monetary Policy Committee (QT, independent).
    Main constraint:
    The stock of existing index-linked debt takes decades to roll off; investor demand constrains issuance choices.
    Evidence:
    Moderate evidence — evaluated, with limits on scope or transfer
    See the trade-offs and evidence
    What the evidence shows
    The OBR’s ready-reckoner shows the exposure: 1 point higher RPI inflation adds about £7bn to interest in a year, and 1 point higher Bank Rate about £7.4bn. Reducing exposure lowers risk, but cheaper debt now is not guaranteed — the effect depends on rates when debt is issued.
    Policy status
    The share of index-linked gilts in new issuance has been reduced in recent remits.
    Resources
    None extra.
    Consent and decisions needed
    Treasury decision for issuance; QT is for the Bank of England, which is operationally independent.
    Time
    Gradual: only new issuance changes, so the profile shifts over many years.
    Cost and yield
    No official costing; the trade-off is between expected cost and risk.
    Trade-offs and who pays
    Conventional or shorter debt can cost more or refinance sooner if rates rise; index-linked debt is cheap when inflation is low.
    How we would know it worked
    Leading indicator: Index-linked share of new gilt issuance. Outcome: Smaller year-to-year swings in debt interest when inflation moves. It would not be working if: Interest costs remain as sensitive to RPI as now.
The options side by side
OptionResourcesTimeEvidenceOutcome to watch
Raise the growth rateVaries by policy; public investment needs capital budgets.Years to a decade; the OBR usually phases in supply-side effects over its five-year forecast.limitedTrend growth and the debt ratio in successive OBR forecasts.
Reduce exposure to interest-rate and inflation shocksNone extra.Gradual: only new issuance changes, so the profile shifts over many years.moderateSmaller year-to-year swings in debt interest when inflation moves.

Plan reviewed 2026-10-11. Added detail from the stored series: lower borrowing (pf-s-borrowing-down), interest above net investment (pf-w-interest-investment), debt since 2007–08 (pf-w-debt-history), evaluation (pf-o-evaluation) and the October 2026 interest forecast (pf-t-interest-oct26). The March interest forecast (pf-t2) is now labelled as March, not latest. How we judge evidence.