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Osborne launches audit into budget "black holes"

Chancellor George Osborne has ordered an independent audit of public spending after new Government ministers claimed to have found shortfalls in their budgets.

The investigation will be conducted by the new Office of Budget Responsibility, and precedes Mr Osborne’s emergency budget – which was promised within 50 days of the Government having been formed – and a more wide-ranging spending review intended to be conducted over the summer.

Ministers claimed they had found “black holes” in the budgets left behind by the outgoing Labour administration, and Prime Minister David Cameron said there were signs of “crazy” spending decisions taken by Labour ministers in the final months before they lost power.

Business secretary Vince Cable told the Sunday Times: “I fear that a lot of bad news about the public finances has been hidden and stored up for the new government. The skeletons are starting to fall out of the cupboard.”

But shadow chancellor Alistair Darling defended Labour’s actions, saying: “We have always been entirely clear about public spending decisions.

“Every new Government tries blaming the last one. This just shows the old politics is alive and well with the Lib-Con coalition.”

Mr Cameron said that the audit would form part of a wider programme to set out Government spending plans for the coming three years, involving “difficult decisions” in most Whitehall departments to reduce the UK’s record deficit.

The new coalition Government is also expected to make a start on tackling the £163 billion budget deficit, with chief secretary to the Treasury David Laws due to meet Cabinet colleagues this week to agree £6 billion in cuts to this year’s spending.