18 Jun 2010
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Government calls halt on £10.5 bn in spending

The Government has pulled the plug on £2bn of schemes, including the £450m Hartlepool hospital and the £27m Stonehenge visitor centre by Denton Corker Marshall, Building reported.

Chief Secretary to the Treasury, Danny Alexander, made the announcement whilst accusing the previous government of irresponsibility and bad financial management. At the same time, he announced that a further £8bn of projects were to be put on hold pending the autumn spending review.

Construction News covered the news that 12 projects have been cancelled after the Coalition’s review of spending decisions made by the previous government since the start of 2010. The £450 m North Tees and Hartlepool hospital is by far the biggest construction job cancelled.

Other building schemes affected include the £1.1bn A14 upgrade; £12m for the regeneration of Sheffield city centre; the £94m earmarked for a new magistrate’s court in Birmingham, coincidentally also by architect Denton Corker Marshall, and a £45m grant towards the British Film Institute's plans to redevelop its site in London's Southbank Centre.

In total, 24 government projects worth £10.5bn that have been either cancelled or put on hold.

Alexander said: “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.”

He added that the coalition government had also discovered a further £1bn black hole in government spending plans which were not properly funded, meaning further savings would have be found, with an announcement likely next week.

Accusing the previous government of irresponsibility, he said: “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.”

In addition, this week's statement did not include projects which had been approved under agreed departmental expenditure limits, but were now also being reviewed.

Alexander also said that Building Schools for the Future schemes were being considered separately, with an announcement about the programme to be made imminently.