THE government yesterday cancelled £10.5bn of projects, which were signed off when Labour went on a last-minute spending spree in the run up to the general election.
Danny Alexander, chief secretary to the Treasury, told the Commons his hand had been forced by the “irresponsible financial planning” of the previous government.
He announced he was scrapping £2bn worth of projects because they represented poor value for money or because they didn’t fit in with the government’s agenda.
A two-year jobseekers’ guarantee that offered the long-term unemployed a job or work placement, set to cost around £515m, has been axed, as has the £450m young person’s guarantee, which offered paid work or training to 18-24 year olds unemployed for six months.
A new North Tees and Hartlepool hospital – costing £450m – has been cancelled, as has an £80m loan to engineering firm Sheffield Forgemasters, as well as a £25m contribution to a new visitor centre at Stone Henge. A further £8.5bn of projects have been put on the back burner. The vast majority of savings will come from suspending £7bn-worth of defence contracts for new search and rescue helicopters.