Last minute BSF rush will intensify cost cuts

Grant Prior 14 years ago
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Spending cuts in departments like transport could be more severe than even the gloomiest predictions following the discovery of further “black holes” in the country’s finances

The government has accused the previous Labour administration of rushing through a series of spending promises in the run-up to the recent election.

Business secretary Vince Cable also warned: “I fear that a lot of bad news about the public finances has been hidden and stored up for the new government. The skeletons are starting to fall out of the cupboard.”

Among the eleventh hour spending pledges were Building Schools for the Future contracts worth £440m which were signed-off in the final weeks of Labour rule.

Carillion was awarded a £370m BSF deal in Wolverhampton while Skanska secured a £70m contract in Essex.

BSF schemes not at preferred bidder stage have now been frozen by the government as Chancellor George Osborne prepares a preliminary spending cuts programme this week ahead of his first budget on June 22.

Spending plans already agreed  will also be the subject of a review by the new Office of Budget Responsibility.

One contractor told the Enquirer: “It seemed a bit strange that those large BSF deals were rushed through before the election but presumably there is nothing that can be done to stop them now as they are all signed and sealed.

“The worry now is the knock-on effect for other departments and what looks like a total halt to other BSF schemes.

“I think the transport budget outside of high-speed rail is going to get decimated and no-one is going to see any new BSF building work for a long time.”

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