Transport secretary Philip Hammond announced that all infrastructure jobs not under contract will now be placed under review as part of the government’s economy drive.
The full scale of the cuts will be outlined in the government’s autumn spending review.
But Hammond warned: “Until this work is concluded, it would be inappropriate, given the likely budgetary constraints, for the Department for Transport to continue to invest time and resources on scheme development at the same rate as before.”
He said it was unlikely that any schemes not yet fully approved will be able to begin construction before the end of 2010/11 and that any new construction in 2011/12 was likely to be limited.
The news that transport schemes worth billions have been shelved has confirmed contractors’ worst fears.
One contractor told the Enquirer: “We always thought new transport spending would be savaged and that’s exactly what is happening.
“The hope now is that maintenance survives the cuts. Not building new roads and letting the existing network rot would be a disaster.”
Hammond said: “I am taking this action to ensure that no taxpayers’ money is spent unnecessarily on transport schemes that are now under review.
“If we are to succeed in reducing the UK’s record budget deficit, it is vital that not a single penny is wasted and we get the maximum value for money for every project.”
The DfT said it could “give no assurances on its intention to fund any schemes that were awarded conditional approval by the previous government”.
More than 40 projects across the country had completed the first stage of the funding process and a further 19 projects were under consideration.
Civil Engineering Contractors Association director Rosemary Beales said: “This puts a significant amount of potential work for contractors of all sizes in doubt.
“The industry will see this as an indication of the shape of things to come.
“We are now seeking an urgent meeting with the Department for Transport to discuss this. They must maintain a close dialogue with the construction industry throughout this process.
“It is important that the Government keeps the sector fully appraised of its plans as they develop so we can be ready to deliver a programme of much-needed schemes when the funding is in place.”
