Today, the Chief
Secretary to the Treasury, Danny Alexander, announced which
projects re-submitted to the Treasury will be suspended and
cancelled as part of a review of all spending decisions taken
since 01 January. Projects have been cancelled where they were not
affordable, did not represent good value for money, or where they
did not reflect the Government's priorities.
The Chief Secretary also announced today an urgent review of
inherited spending commitments for 2010-11, where funding was
reliant on underspending through the End Year Flexibility (EYF)
system, or additional funding from the Reserve. It was unrealistic
to expect underspending would have occurred on a scale necessary
to fund all these commitments - consequently, at least £1bn of
commitments will have to be cancelled. The review will exclude
commitments for military operations and the financial package
agreed with the Northern Ireland Executive to support the
devolution of policing and justice powers.
Spending re-approvals since 01 January
217 projects were re-submitted to the Chief Secretary for
re-approval, totalling £34bn. Projects have been cancelled where
they have not demonstrated value for money, and suspended where
more detailed work is needed as part of the Spending Review
process. The Chief Secretary agreed with departments:
- 12 programmes will not go ahead that would have cost nearly £2
billion over their lifetime.
- 12 programmes will be suspended
that would have cost £8.5 billion over their lifetime.
Further details, including a list of projects that have been
cancelled or suspended, are set out below.
Departmental reviews of spending decisions that did not require
Treasury approval will be completed and announced by Departments
by the end of June.
Commitments reliant on underspend - End Year
Flexibility and the Reserve
The Government has inherited approximately £9bn worth of spending
commitments for 2010-11 that were not fully funded. These
commitments planned to rely on underspending across Government for
their funding as part of the End Year Flexibility system and
additional funding from the Reserve. As there was no reason to
suppose that underspending on a scale necessary to cover all
commitments would occur, and there is insufficient contingency in
the Reserve to cover the remainder, it is expected that the
Government will have to cancel at least £1bn of commitments where
there is no money to pay for them.
The Government will
therefore review in detail all existing EYF and Reserve deals,
with the exception of commitments for military operations and the
financial package agreed with the Northern Ireland Executive to
support the devolution of policing and justice powers. The Chief
Secretary has begun discussions with Departments, and details of
the action taken will be set out at the Budget.
Chief Secretary to the Treasury, Danny Alexander 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.
"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.
We have also found another spending blackhole in the previous
Government's plans - projects had been approved with no
money in place to pay for them. I am determined to deal with this
problem head-on and ensure we never see this kind of irresponsible
financial planning in Government again"
PN 13-10 To view the list of projects that have
been cancelled or suspended, please follow the link below;
http://nds.coi.gov.uk/ImageLibrary/detail.aspx?MediaDetailsID=2031
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