Labour ignored pre-election advice and promised to spend millions

Review: Treasury Chief Secretary David Laws will scrutinise all pledges made since January
10 April 2012
WEST END FINAL

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Labour ministers overruled civil servants to make spending promises for millions of pounds just before the election, it emerged today.

In at least two cases senior officials asked for written direction from ministers when their impartial advice was overturned. All cases in the four months before the election are being reviewed as part of the new cost-cutting drive.

They turned up as part of the review of all Whitehall spending agreements which had been struck since January, which is being carried out by David Laws, the new Treasury Chief Secretary.

Among the cases where civil servants were instructed to go against their recommendation was a decision by former communities secretary John Denham MP to give new unitary council status to local government in Devon, Norfolk and Suffolk.

It is understood that officials did not think this would provide value for money.

Interviewed on BBC Newsnight, Mr Laws said: "I think we were very concerned indeed that over the last few months there were a lot of spending commitments that were made and some of those may not represent good value for money. And in some cases the decisions seemed to have been made against accounting officer advice."

Challenged on the word "seemed" by Jeremy Paxman, he confirmed that in a small number of cases decisions "were made against accounting officer
advice".

Treasury sources today played down an alleged threat to a series of big loans to struggling companies that were agreed by Lord Mandelson before the election.

The sources said that loans would not be cancelled if they provided good value for money.

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