Spending cuts begin to bite

More than 100m will be slashed from council budgets and regeneration projects, while 15 major transport schemes – crucial to the local economy – will be put on hold.

Some flagship projects face the axe and others already underway will be scaled back.

The cuts will hit home hardest in North Yorkshire, and in particular Scarborough and its Spa redevelopment, as well York's vital central redevelopment scheme.

In contrast Leeds, and its controversial arena project, which is receiving Government support despite unprecedented objections from Whitehall civil servants, appears to escape the worst.

It is important that measures taken now avoid wreaking damage to the fragile economic recovery with the risk of plunging the UK into a "double-dip" recession.

If that was to happen, the additional damage to public finances could be worse in the long run, requiring further and even deeper cuts.

The first stage of cutbacks does appear aimed at reducing immediate economic damage – but there must be real concerns about the long-term consequences of decisions and their strategic impact on the local and regional economy.

It remains the case, however, that they offer only a foretaste of the pain to come in what will be a savage period of spending reductions.

There is no argument about the need to take stringent measures to bring the public finances back into some kind of order after years of Labour profligacy, and Ministers are clearly using the first round of cuts to send a signal to the financial markets.

But they should also be able to justify why some projects are chosen and others are not, rather than simply wielding the axe with little regard to the consequences.

It is a careful balancing act and decisions cannot be shirked – but

they must be based on clear evidence of their likely impact, with protection being given to those schemes that have the potential to create jobs and kickstart private sector investment.