10/12/2012 06:41 GMT | Updated 05/02/2013 05:12 GMT

Great Expectations: How the Decision to Fund Schools is Keeping Old Promises

Among the first tranche of cuts introduced by the Coalition upon taking power in May 2010, was the scrapping of the Building Schools for the Future programme.

Among the first tranche of cuts introduced by the Coalition upon taking power in May 2010, was the scrapping of the Building Schools for the Future programme.

The Secretary of State for Education, Michael Gove, faced criticism over his decision, and six local authorities sought judicial review. In February 2011 Justice Holman ruled in favour of the authorities characterising Gove's decision-making process 'as being so unfair as to amount to an abuse of power'.

Of course, the Coalition did not invent the problem of frustrated legitimate expectations. In the spring of 2009 the Labour government came under fire and a senior minister was forced to resign when the Department of Innovation, Universities and Skills cancelled its Building Colleges for the Future programme having run out of money to honour the assurances of £2.7 billion worth of funding it had given to 79 colleges

Cutting money to school and college building projects is, of course, a catastrophe for all those children, parents, and teachers who were expecting the projects to go ahead as assured; no less so for the builders, contractors, materials suppliers, and so on, who were depending on the investment and jobs. But the case also raises a more general, philosophical question, of particular importance in times of economic austerity and retrenchment of public spending: what, if anything, does the state owe to individuals and organisations when it can no longer afford to honour its assurances of funding?

Some people, of course, will be horrified at the thought of a flood of compensation claims against the government on grounds of frustrated legitimate expectations. Money will go down the drain of expensive litigation. The precedent would introduce an unwelcome conservative dimension into policy-making, making it timid, unimaginative, and ungenerous.

These are reasonable fears, but consider the alternative. The government will no longer be able to make credible commitments, thus making it devilishly hard to introduce any new policy that depends on public participation and trust. What is more, securing the public's expectations is the antidote to the arbitrary exercise of power and illegitimate government - it stops maverick ministers like Gove from cutting important public spending projects willy nilly. Finally, this is an issue of fairness, of how a government treats people who rely upon its broken assurances, something one half of the Coalition claims to care deeply about.

In the end Osbourne's Autumn Statement paves the way for a u-turn over cuts to school building projects. In real terms this represents a change in direction over how best to cut the deficit (grow the economy stupid!). It also reflects the internal politics of the Coalition (let's throw Clegg a bone). Be that as it may, this is a welcome move. To steal a phrase from Winston Churchill: we can sometimes count on governments to do the right thing, after they have exhausted all the other possibilities.