Public Expenditure: Review of Commitments

Lord Newby Excerpts

Thursday 17th June 2010 Lords Chamber

[Lord Sassoon]

I thank the noble Lord, Lord Howarth, for his comments, but we really do need to get back to the central point today, which is that the previous Government left us with a series of projects that are unaffordable and in many cases present poor value for money. We need to do this. There are huge pressures on public expenditure, which are going to be looked at in the round through the spending review, but we have to take off the further pressures that have been put on by projects that simply cannot be justified. That will provide us with a much better baseline from which decisions made in the Budget next week and then in the spending round going forward can be taken to protect what really matters—projects that present good opportunities to invest in sustainable growth in the future. That is absolutely central and the announcement today helps to contribute to it.

In the short term, I cannot stress enough that to pay for these projects the previous Government were relying on an assumption that £7 billion of underspend would be made in the current year. That is approximately 1.8 per cent of DEL expenditure, but the evidence of recent years shows that the underspend has been reducing to what is estimated to be less than 1 per cent of DEL in 2009-10. The issue is not whether these projects stack up as value for money but that there is simply no money left to pay for them.

I would like to make a point about Stonehenge. I would hate anyone to be left with the thought that we are somehow abolishing Stonehenge or knocking it down—I see that the noble Lord agrees with that. Of course it would be nice to enhance the visitor centre, but unfortunately this is a project that does not stack up in the current circumstances.

[Lord Newby]

My Lords, does the Minister agree that probably the most depressing part of this Statement is the issue that he was just discussing—that billions of pounds of commitments relied on underspend or access to the reserve? Was that not a series of decisions which could have been taken only by a Government who knew that they could not win an election and which therefore represents a poison pill for their successors? Can the Minister ensure that, at the time of the Budget, the total component of that expenditure is set out so that we can see what it is? Can he also make sure that all departments understand that, in the future, they simply cannot get away with that kind of sharp practice?

[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.