Public Expenditure: Review of Commitments

Lord Harrison Excerpts

Thursday 17th June 2010 Lords Chamber

[Lord Sassoon]

I am grateful to my noble friend Lord Newby. I agree completely with his analysis and that the numbers should be set out. As far as the reserve is concerned, I reinforce my hope that everyone in this House will agree that the reserve needs to be kept for genuine emergencies and new pressures that may result, particularly from military operations in Afghanistan.

[Lord Harrison]

My Lords, the Minister said that he sees himself as an accountant rather than an economist. I have to confess that I am neither an accountant nor, despite the best efforts of my noble friend Lord Eatwell when he was my director of studies at Cambridge, an economist. All the projects described by the Minister had a past and a present and they would have had a future. In respect of each of them, what exactly are the costs that have been incurred in preparing for them through the tendering processes that have gone on so far? Even more particularly, can he tell us the costs of cancellation and the liabilities that the Government are incurring as a result of these decisions?

[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.