Cuts felt from the South Bank to Stonehenge

Nigel Morris,Andrew Grice
Friday 18 June 2010 00:00

Cuts to public spending were announced by Whitehall yesterday in a bid to reduce the nation's overdraft.

A total of 12 projects worth £2bn which were approved by the previous government – including plans for a new £25m visitor centre at Stonehenge, a new hospital in the North-East of England and a cinema on the South Bank in London – have lost their public funding.

Another 12 totalling £8.5bn have been put on hold pending a spending review. The first round of spending cuts, announced by Danny Alexander, the Chief Secretary to the Treasury, was a foretaste of expected sweeping reductions to government budgets as the Government attempts to reduce Britain's £156bn deficit.

It comes just days before the emergency Budget. A report just released from the think-tank, Policy Exchange, insists there is widespread scope for savings in the public sector. It claims that workers on state payroll enjoy better pay and pensions, hours and earlier retirement than private sector staff.

David Cameron defended the cuts last night, accusing Labour of rushing through projects that did not provide value for money because the election was approaching. "Those that didn't pass that test had to be stopped," he said. But at a Brussels press conference, he dodged questions about how many jobs might be lost as a result of the cuts and whether frontline services would be affected.

"We are going to take difficult decisions," Mr Cameron said. "The truth is that if you don't deal with the deficit you will never get the confidence you need to get the economy growing again."

A review of 217 projects worth £34bn that had been approved in the closing three months of the Labour administration was ordered by the Government last month. Support for Post Offices and spending on "crucial military equipment" in Afghanistan were among those projects spared. In angry Commons scenes, Labour accused the Government of a damaging "attack on jobs" that would undermine economic recovery.

Liam Byrne, the shadow Chief Secretary, said: "Both the country and the Liberal Democrat party beyond will be aghast at your attack on jobs, your attack on the industries of the future and the cancellation of a hospital."

Mr Alexander retorted that the schemes scrapped yesterday had been promised by Labour ministers in the months before the election using, "money they simply didn't have". He said he had also identified a further £9bn of unfunded spending commitments, at least £1bn of which could only be paid for by dipping into emergency reserves.

Opposition anger focused on the decision to scrap an £80m loan to the company Sheffield Forgemasters to build a press to make components for the nuclear industry. The firm said the money would have helped create 180 jobs, while unions claimed the Government's decision would cost thousands of jobs and undermine the move towards a low-carbon economy.

Angela Smith, a Labour MP from Sheffield, protested: "This particular decision is made of spite because South Yorkshire votes Labour."

Nick Clegg, the Deputy Prime Minister, who is also an MP for Sheffield, expressed his "regret" but said the blame lay with Labour ministers' "breathtakingly cynical way of raising false hope" in the city.

The Government's £2bn savings plan


* Two-year Jobseeker's Guarantee (£515m): Scheme giving a job or work placement to those out of work for more than two years.

* Extending the Young Person's Guarantee to 2012 (£450m): Scheme promising unemployed 18 to 25-year-olds a job, training or work experience.

* North Tees and Hartlepool hospital (£450m).

* Future Jobs Fund (£290m): Creating jobs for long-term unemployed and teaching job-finding skills such as writing CVs.

* Sheffield Forgemasters (£80m): Company being loaned money to expand – creating about 180 skilled jobs – to build parts for nuclear power stations.

* British Film Institute (£45m): A promised donation allowing the BFI to build a film centre.

* Free swimming (£40m): Originally due to run to March 2011, it will end in July.

* Stonehenge Visitor Centre (£25m): The long-delayed project to spruce up one of Britain's most popular attractions has been ditched. It was due to open in 2012.

Under threat

* Search and rescue helicopters (£7bn): The previous government proposed privatising the search and rescue helicopter service currently jointly run by the Royal Navy, Royal Air Force and coastguards.

* Widening the A14 (£1.1bn): The section between Cambridge and Huntingdon – one of the most congested roads in eastern England – was due to be widened to six lanes.

* Holt Park Wellbeing Centre, Leeds (£50m): A planned "community hub", including a swimming pool, activity rooms and a café, due to replace an existing leisure centre.

* Swimming pool improvements (£25m).

* Library improvements (£12m).

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