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Tuesday, May 18, 2010

Scorched earth

Todays Times alleges that the outgoing Labour Government embarked on a scorched earth policy in relation to the nation's finances on a scale not seen since Napoleon retreated from Moscow. OK, that may be an exaggeration but still it is still pretty serious.

The paper says that Ministers have discovered Whitehall “black holes” that could force even more severe public spending cuts, or higher tax rises than previously thought. They allege that billions of pounds in public money was committed in the run-up to the election campaign in a deliberate strategy to boost Labour’s chances at the ballot box and sabotage the next government.

The “black holes” that ministers have already unearthed include:

- A series of defence contracts signed shortly before the election, including a £13 billion tanker aircraft programme whose cost has “astonished and baffled” ministers.

- £420m of school building contracts, many targeting Labour marginals, signed off by Ed Balls, the former schools secretary, weeks before the general election was called.

- The troubled £1.2 billion “e-borders” IT project for the immigration service, which, sources say, is running even later and more over-budget than Labour ministers had admitted.

- A crisis in the student loans company where extra cash may be needed to prevent a repeat of last year’s failure to process tens of thousands of claims on time.

- The multi-billion-pound cost of decommissioning old nuclear power plants, which ministers claim has not been properly accounted for in Whitehall budgets.

- A £600m computer contract for the new personal pensions account scheme rushed through by Labour this year, which will still cost at least £25m even if it is cancelled.

All-in-all even if only half of this is true it is a pretty depressing picture and one that means that hard decision will have to be made in the coming months.

Update: the BBC report the comments of Civil service union leader Jonathan Baume who they say told 5 Live's Chief Political Correspondent John Pienaar that civil service chiefs lodged formal protests at spending decisions by Labour ministers in the dying months of their rule.

He said that it culminated in the "nuclear option" of demanding written - and soon to be published - instructions from their political masters.
I wonder how many of those instructions from former political masters will turn out to be from candidate for the leadership of the Labour party. Well if the reports are true we know Balls is implicated for one…
I recall posting a message speculating that this could happen, on my general election Facebook page. There were only one or two comments, but they were very strong responses to the possibility, suggesting retribution. If those responses were indicative of the general public mood, we should see support for Labour continue to fall.
If you read the Telegraph which is no friend of the Labour Party you will see that in fact that there were only three letters. One concerned compensation for industrial illness which affects miners and the other two local government reorganisation in England. As a reader of the LGC you should know that the local government story has already been in the public domain for weeks. It concerned the decision of John Denham to agree that Norwich and Execter should become unitary authorities against the advice of officials. Both areas were considered to be too small to be efficient locla government units by senior civil servants. Advice that I would agree with even though they are larger than nearly all the 22 Welsh local authorities.
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