Spending cash earlier could lead to higher costs in the end - OBR

INJECTING cash into government projects early on rather than spreading it out over a longer period could “possibly” mean that they cost more in the long run, the head of the Budget watchdog has suggested.

Richard Hughes, the chair of the Office for Budget Responsibility (OBR) told a cross-party committee of MPs yesterday that “front-loading” on spending means that “quite possibly” projects could cost more in the end.

Mr Hughes also said the pressure the OBR believes could be put on the labour market and other elements by the Government’s plans contributed to them predicting higher inflation.

Mr Hughes was speaking to the Treasury Committee less than a week after Rachel Reeves delivered her first Budget as Chancellor.

Last Wednesday, Ms Reeves announced £40bn a year in extra taxes, with money being poured into schools, hospitals, transport and housing.