Alexander culls Labour’s last projects
Chief secretary to the Treasury Danny Alexander has cancelled or suspended 24 of the Labour government’s programmes it approved this year, in his first appearance at the despatch box for the coalition.
David Laws’ replacement waved through 193 of the 217 projects Labour ministers had backed in the final months of their government, which totalled £34 billion.
But 12 programmes costing nearly £2 billion over their lifetime were cancelled and 12 more totalling £8.5 billion were suspended as Mr Alexander acted to implement immediate cuts.
Cancelled projects include the Stonehenge Visitor Centre, a loan to Sheffield Forgemasters International, an extension of the young person’s guarantee to 2011/12 and the local authority business growth initiative.
“We are determined to tackle the unprecedented budget deficit and bad financial management we have seen over the past decade, but are equally determined to do this in a way that is fair and responsible,” he said.
“As a result of the poor decisions made by the previous government, I have taken the decision to cancel certain projects that do not represent good value for money, and suspend others pending full consideration in the spending review.”
Labour backbenchers accused Mr Alexander of making decisions which were politically motivated.
While Mr Alexander insisted in the Commons the only factor taken into account was value-for-money, a Treasury statement said projects had been cancelled where they were not affordable, did not represent good value for money, or “where they did not reflect the government’s priorities”.
Liam Byrne, the shadow chief secretary to the Treasury now notorious for telling Mr Laws in a note “there’s no money left”, told MPs the projects amounted to just 0.05% of this year’s government spending.
“The country and the Liberal Democrat party will be aghast,” he said, before lamenting the cancellation of North Tees and Hartlepool hospital. “What could be more frontline than that?” Mr Byrne asked.
Mr Alexander said he had discovered “yet another black hole” in the government’s finances, involving “unrealistic” underspending expectations.
At least £1 billion of commitments will have to be cancelled as a result, the Treasury said.
“Projects had been approved with no money in place to pay for them,” the chief secretary added.
“I am determined to deal with this problem head-on and ensure we never see this kind of irresponsible financial planning in government again.”
Suspended projects include the libraries modernisation programme, the university enterprise capital fund and search and rescue helicopters for the Ministry of Defence.
