I predicted this would happen some time ago, and it turns out, not wanting to blow my own trumpet, that I was horribly right. The Times this morning is reporting that a significant amount of government ‘spending’ was rushed through just before Labour’s election defeat and kept secret and off the balance sheet’s that were publicaly available to the other parties.
These include a £13 billion tanker aircraft programme whose cost has “astonished and baffled” ministers. £420 million of school building contracts almost all of which are targeted at key Labour marginals – this was signed off by Ed Balls only a week or two before the general election was called against the public advice of the Treasury that further new build investment should be controlled. £1.2 billion seems to have gone up in smoke on the disastrous “e-borders” IT project for the immigration service, which is running even later and more over-budget than Labour ministers had previously admitted. £600 million has been committed to (yet another) computer service for the new personal pensions account scheme which was rushed through by Labour this spring: the real scandal of this is after 13 years and a dozen hugely expensive IT failures the contract is written in such a way that it’ll cost at least £25 million even if it is cancelled. The crisis-laden Student Loans Company looks like it’ll now require extra to avoid the chaos of last year’s systems failure which left tens of thousands out of pocket as they started their courses, and finally (although likely far from finally!) the multi-billion-pound cost decommissioning project of our aging nuclear power plant has exploded all over the balance sheet, the Government paying private industry to clean up their own mess which in-coming ministers claim has not been properly accounted for in Whitehall budgets.
If you thought the cuts were going to have to be brutal, think again. This is a bomb that’s just going to keep going off for the next few months, and what it means to you and me – the taxpayer – is that we’re going to get hammered time and time whether we like it or not to avoid Britain defaulting on it’s debts. The gilt markets won’t remain buoyant off the back of the election forever, and if the Euro continues to slide the ratings agencies will look at all of the European economies for cracks, and if this is anything to go by it would appear our economy is fatally undermined.