Treasury has turned to AI in its bid to balance the books

As cabinet ministers thrash out how to balance the nation's books, they are playing a new Treasury game.

- ANDREW GRICE

Its AI tool allows ministers to raise or cut departmental budgets to get the maximum benefit from public services. If they spend too much and breach chancellor Rachel Reeves's fiscal rules, the screen flashes red and tells them how much income tax would go up – a no-go area.

The Treasury’s idea is to bind all ministers into the difficult trade-offs needed in a government-wide spending review to be published on 11 June. In theory, they will all be in it together, working in small groups to encourage joined-up working, instead of pleading for more money for their departments in bilateral negotiations with the Treasury.

However, traditional rivalries are alive and kicking. Liz Kendall, the work and pensions secretary, has identified £5bn of welfare savings. She wants to invest some of it in measures to help benefit claimants back into work, while the Treasury wants to pocket the money. “It’s classic short-termism. It would be a false economy not to go for reforms that would pay for themselves over time,” one Whitehall veteran told me.