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£2bn worth of new Government projects binned

Cuts to billions of pounds of public spending have been unveiled by the Government as it axed and suspended a series of projects agreed earlier this year by Labour.

A total of 12 projects worth £2bn which were approved by the previous Government — including plans for a new £25m visitor centre at Stonehenge, a new hospital in the North-East of England and a cinema on the South Bank in London — have lost their public funding. Another 12 totalling £8.5bn have been put on hold pending a spending review.

The first round of spending cuts, announced by Danny Alexander, the Chief Secretary to the Treasury, was a foretaste of expected sweeping reductions to Government budgets as the Government attempts to reduce Britain's £156bn deficit. It comes just days before the emergency Budget. A report just released from the think-tank, Policy Exchange, insists there is widespread scope for savings in the public sector.

David Cameron defended the cuts last night, accusing Labour of rushing through projects that did not provide value for money because the election was approaching. “Those that didn't pass that test had to be stopped,” he said. However, at a Brussels Press conference, he dodged questions about how many jobs might be lost as a result of the cuts and whether frontline services would be affected.

“We are going to take difficult decisions,” Mr Cameron said. “The truth is that if you don't deal with the deficit you will never get the confidence you need to get the economy growing again.”

A review of 217 projects worth £34bn that had been approved in the closing three months of the Labour administration was ordered by the Government last month. Support for post offices and spending on “crucial military equipment” in Afghanistan were among those projects spared.

In the Commons, Labour accused the Government of a damaging “attack on jobs” that would undermine economic recovery. Opposition anger focused on the decision to scrap an £80m loan to the company Sheffield Forgemasters to build a press to make components for the nuclear industry.

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