Rachel Reeves Proposes Revamp in Public Finance Assessment

British finance minister Rachel Reeves plans to alter the assessment strategy of public finances to enable billions in additional capital spending. Her new approach targets the measure known as public sector net financial liabilities, replacing the previous method. This change will be announced ahead of the first budget presentation.

British finance minister Rachel Reeves is set to transform the evaluation of public finances, a move expected to unlock billions for capital spending. The Guardian reported that the changes will focus on public sector net financial liabilities, a shift from the current measure that excludes the Bank of England.

The alteration aims to give the government increased borrowing capacity. Reeves plans to outline this intent during a visit to the International Monetary Fund in Washington, although detailed changes will not be disclosed until her budget presentation on October 30.

While the Treasury has not commented, expectations of this shift have been high. Had this measure been applied earlier, it could have given more borrowing room to previous finance ministers. The Institute for Fiscal Studies noted that using this metric could have provided an extra £53 billion.

(With inputs from agencies.)