17 June 2010
The government has announced it will cut £2bn worth of projects deemed unaffordable or not representing good value for money, as part of its bid to reduce public spending as quickly as possible.
Chief Secretary to the Treasury Danny Alexander issued a statement today setting out the £2bn cuts. A second set of schemes committed to by the previous government, worth an additional £8.5bn, has been suspended until the Comprehensive Spending Review, to be carried out later this year.
Of the £2bn, £370m have already been announced by the government as part of the £6bn round of spending cuts detailed last month.
These include the axing of the Future Jobs Fund, but the Department for Work and Pensions is to be hit again, this time with the 2011/12 extension of the Young Person’s Guarantee to be abolished, saving £450m. The £515m two-year Jobseeker’s Guarantee is also to be culled.
A £450m spend earmarked for North Tees and Hartlepool Hospital is also for the chop, along with £25m for the Stonehenge Visitor Centre, among a handful of smaller projects.
Of the £8.5bn suspended, nearly £7bn is for a joint procurement programme between the Ministry of Defence and the Department for Transport, for search and rescue helicopters.
Smaller projects now under review are a £12m libraries modernisation programme, a £25m fund to help universities make money out of their innovations, and £12m to be invested in Sheffield’s retail quarter.
The review is the result of 217 projects approved since the beginning of 2010, worth £34bn overall, being re-considered by the Treasury.
On top of that, the government has claimed it inherited £9bn of spending commitments for 2010/11 that were not fully funded, and would rely on reserve funds and underspending across government as part of the End Year Flexibility system.
Alexander said today he plans to review all EYF and reserve projects, and save another £1bn.
He said: ‘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.’
