Public Expenditure: Review of Commitments

Baroness Noakes Excerpts

Thursday 17th June 2010 Lords Chamber

[Lord Sassoon]

My Lords, I think that I can help the noble Lord, Lord Harrison, with those questions. Of the 12 programmes and projects that are being cancelled, nine have costs in the financial year 2010-11 totalling £491 million; the total realisable savings from their cancellation will be £474 million in the same year. From that it can be seen that the difference between the two is less than £20 million. Those are the costs that will either be incurred as a result of cancellation or have already been sunk into the projects. However, the great majority of the money is to be saved, starting in the current year.

[Baroness Noakes]

My Lords, we should congratulate the Government on taking early and decisive action to deal with the deficit. The Benches opposite seem constantly to want to ignore the deficit and find a reason for not dealing with it. I am proud that our Government are getting on with it. The announcement made by my noble friend today clearly does not deal with the whole of the deficit and we will expect more from the Budget and the Comprehensive Spending Review later this year, but it is a very good start. It will help to restore confidence in our country, which is a key element of restoring growth. That is the most important aspect that we have to work on at the moment.

I have one question for my noble friend, which echoes the point made by the noble Lord, Lord Newby, in relation to the commitments that relied on underspend or access to the reserve. The Statement refers to billions of pounds’ worth of spending commitments made in this way, but goes on to say that £1 billion-worth will be cancelled. I think that my noble friend said that a total of £7 billion was concerned in this way. Why cannot the whole £7 billion-worth of projects be cancelled, because, in the terms of the Statement, there is not the money to pay for them?

[Lord Sassoon]

I am grateful to my noble friend Lady Noakes for taking us back to what is in fact the basis of this and I share completely her analysis of how important it is to get a grip on the deficit. Let me try to help her with some of the numbers. The total of spending decisions that have been found as a result of this exercise to be unaffordable and bad value for money is £10.5 billion. Those have been put into either the “cancelled” or the “suspended” category. We have cancelled projects with a total value of just under £2 billion, so the rest—approximately £8.5 billion-worth—have been suspended and will go into the process that I have described. I hope that this helps to reconcile the numbers.