Budget turmoil as several government departments fail to agree spending decisions by deadline

Several government departments failed to agree their spending settlement by yesterday's deadline in a sign of ongoing turbulence over the budget, Sky News can reveal. 

A number of departments have still been unable to agree with the Treasury on the scale of cuts they will be expected to deliver in the next two years, despite discussions stretching back to July.

Close of play on Wednesday was meant to be the deadline for all major measures agreed for the budget to be sent to the spending watchdog, the Office for Budget Responsibility (OBR).

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After this moment, only small changes are meant to be possible in the budget and spending review for the financial year beginning next April.

At least one department which has not settled today had been expecting to strike an agreement with the Treasury as recently as Wednesday evening, suggesting last-minute turbulence.

The Treasury play down the significance of the delay, saying that it is not unusual, but there is still deep concern in parts of government at how the budget will land.

The Treasury reject any suggestions that settlements are being "imposed" on departments who have failed to agree their budgets ahead of the Chancellor's statement on 30 October.

However the delay - and the briefing that has accompanied this - seems to be a mark of the difficulty Chancellor Rachel Reeves and Sir Keir Starmer are having in getting the support of the top team for this budget.

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At least three cabinet ministers are understood to have appealed directly to Sir Keir over the head of Ms Reeves about the budget.

The Treasury believes it has never made a secret of the scale of the tough decisions necessary and says there should be no surprise at the decisions needed to be made in this budget.