The skeletons in the cupboard: Labour's 'crazy' last year of spending unveiled

The audit, to be conducted by the new Office of Budget Responsibility, will be launched today to look at every aspect of Government expenditure.

The Prime Minister said the audit would form part of a wider programme to set out Government spending plans for the coming three years, involving "difficult decisions" in most Whitehall departments to reduce the record state deficit.

"We have a Budget within 50 days, which sets out the total spending envelope over the next three years.

"Then we have a proper spending review taking place over the summer and into the autumn where we work out how to distribute these difficult decisions between the various departments."

Mr Cameron cited the Government's 1.5 billion budget for consultants as one of the "very bad spending decisions" taken by Labour Ministers.

"From the large to the small, we are going to take action to stop the very bad decisions that were taken in the dying days of the last Labour government," said the Prime Minister.

The chief executive of the Management Consultancies Association, Alan Leaman, responded: "Management consultancy adds significant value to the public sector – for every pound spent on consulting, on average, 6 of benefits are realised by consulting clients.

"Organisations of the scale and complexity of government need access to the specialist skills and expertise of consultants, particularly as it grapples with the challenge of the deficit.

"Management consultancy delivers significant savings for the taxpayer, along with improvements in public services."

Ministers claimed they had found "black holes" in the budgets left them by the outgoing administration, with previously hidden spending commitments coming to light as they go through the books.

Business Secretary Vince Cable said: "I fear that a lot of bad news about the public finances has been hidden and stored up for the new government. The skeletons are starting to fall out of the cupboard."

Cabinet Office Minister Francis Maude, who has been tasked with finding ways of cutting Whitehall waste, said: There are some worrying early signs that numbers left by the outgoing government may not add up."

And Universities Minister David Willetts said Labour had left behind "not so much an in-tray as a minefield".

Among projects identified as causing concern were a 13 billion tanker aircraft programme for the Ministry of Defence; school building contracts worth 420m signed off in the weeks before the election; and a 1.2 billion IT project for the immigration service.

The new coalition Government will hear the first response from unions to public sector cuts this week when civil service delegates will decide how to campaign to protect jobs and services.

The Public and Commercial Services Union will open its annual conference on Wednesday, which will hear calls for a new national campaign among public sector unions to fight spending cuts.