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Government spending - green or amber lights?

Arif Ansari | 11:44 UK time, Tuesday, 1 June 2010

Traffic lights

Everyone knows government spending will soon reduce. What's less well known is that projects already given the green light are now back on amber.

All major projects approved this year have had to be resubmitted to the .

Will plans to rebuild the or still go ahead? What about extending the Greater Manchester tram system? Or creating the Heysham bypass?

Two are particularly significant. Did events in Blackpool in March encourage this review?

There was an unseasonal warmth in the town as was given money to buy the famous Tower and other attractions. But unknown at the time, Peter Housden, the permanent secretary at the Department for Communities and Local Government opposed the investment.

He apparently did not believe it was good value for taxpayers and was overruled by the Labour government.

Reversing the decision would be highly unpopular. A number of organisations backed the plan. And there's another problem too - most of the money has already been spent.

Hazard lights are also flashing at motors in Ellesmere Port. They were given a £270m loan guarantee, provided by Peter Mandelson when he was Business Secretary.

This is not direct funding. Rather it is a national guarantee designed to encourage financiers to lend money. The cash is needed to continue producing and developing the new Astra model.

I am told the "due diligence" was very thorough. Nevertheless it was pretty clear during the election the had doubts.

made this point on a campaign visit to the region, though party press officers subsequently insisted he was not referring to Ellesmere Port. Well, it seems pretty clear he was.

is playing down the significance of this review. But privately the company is said to be deeply concerned.

, now under Vince Cable, tells me it stands by every one of its decisions. Will the ?

The reviews were being fast tracked with answers expected in a few weeks. The new Chief Secretary may have a lot of very quick reading to do.

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