Labour overrode officials on CO2-cutting car scrappage scheme

Labour cabinet ministers authorised billions of pounds of spending against formal advice from senior civil servants in their final year of office – and at least one of the projects pushed through, despite Whitehall concerns over value for money, was the £400 million car scrappage scheme.

The car scrappage scheme, which offered a £2,000 grant to scrap an old car in exchange for a new one, was hailed a success when it ended on March 31 2010, having enticed drivers to buy 400,000 new cars over almost a year during which it operated.

It was first launched in May 2009 by the then Business Secretary Lord Mandelson with £300 million of Government funding and was extended with a £100 million of extra funding in September 2009. Primarily designed to give the recession-hit car industry a much-needed boost, it also aimed to get the most polluting cars off the road.

Government figures released at the end of the scheme, showed cars bought under the scheme had, on average, 27 per cent lower CO2 emissions than the cars they replaced.

However, according to reports, the £400 million scheme was the subject of at least one of around 10 "letters of direction" issued by the Labour cabinet instructing Whitehall officials to authorise spending on.

Laws conduction audit into Labour Government spending
The new Chief Secretary to the Treasury, David Laws, is said to be conducting an audit of every spending decision signed off since the start of the year. He told BBC' s Newsnight this week that he was "very concerned" about the spending commitments made by the Labour Government.

"Over the last few months of this Government there were a lot of spending commitments that were made and some of those may not represent good value for money," he told the programme.

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