David Blackburn

The coalition is edging the public spending debate

The coalition is edging the public spending debate
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Danny Alexander acquitted himself effectively this morning. The restructuring of government spending has gone beyond bland clichés about ‘efficiencies’; with care, the government is dismantling Labour’s unfunded spending projects.

£8.5bn in unfunded projects signed-off since 1 January 2010 are on a stay of execution until the autumn; £1bn of unfunded projects signed-off before 1 January 2010 are also on their way to the block. £2bn will be saved almost immediately with the cancellation of the 2 year jobseekers’ guarantee, the young person’s guarantee, CLG regional leader board, the local authority business growth incentive and the county sports partnerships. Controversially, the government has also cancelled the Sheffield Forgemasters’ fund and the North Tees and Hartlepool hospital project - an unfortunate price of re-balancing the books, though it should be noted that there are still 35 hospital trusts in the Yorkshire and The Humber Strategic Health Authority.

The Tories benefit from having a Lib Dem announcing these cuts: it disarms Labour. Liam Byrne’s response was well executed if uninspired. Can or should the jobseekers’ 2 year guarantee by extended into 2011-12 with the public finances in this state and the economy returning to growth? Labour's stand against cuts is classic, barely credible opposition politics. Also, the government has protected spending where necessary – for example, Vince Cable’s loan guarantees to struggling car manufacturers. The OBR’s report means that the public spending debate is far from closed; but intellectually and politically the coalition have had the best of recent exchanges.