TO MANY, £35 billion sounds like an unimaginably large sum. So when Labour suggests that Conservative plans to save such an amount from public spending would inevitably lead to swingeing cuts, it is a charge that may resonate.

In reality, while £35 billion is a significant figure, it needs to be seen against the enormous scale of public finances. By the time of the next general election, total government spending will have exceeded £500 billion and £35 billion will be about 6.5 per cent of “total managed expenditure”.

So, while savings of this order might not be secured painlessly, they are plainly achievable. In the sort of household analogy once favoured by Baroness Thatcher, saving such a share of the weekly housekeeping would be manageable for most of us, even if it meant forgoing some extras.

As Robert Chote, director of the independent Institute for Fiscal Studies, points out, Oliver Letwin’s proposals would reverse only about half the scale of the spending boom under Labour since 1999. And the squeeze envisaged by the Shadow Chancellor would actually be less severe than that imposed by Gordon Brown in Labour’s first two years in office.

“It is actually relatively modest . . .” Mr Chote points out.

Mr Letwin’s claims that there are big savings to be had is lent further credence by the early conclusions of Sir Peter Gershon’s Whitehall efficiency review, leaked yesterday.

But, as ever in financial matters, the devil lies in the details of the Letwin plans.

The Shadow Chancellor’s first problem is that he wants to extract his savings not from the whole panoply of government activities but from a group of departments that account for only about a quarter of total spending.

Indeed, not only does Mr Letwin pledge to keep spending a bigger share of national income on health and education, he admits that his radical reform proposals for vouchers and increased choice for patients and pupils will incur extra costs, at least to start with.

The whole burden of the spending squeeze — what Mr Letwin calls his “aggregate corset” — therefore falls on key departments such as trade and industry, the Foreign Office and agriculture. But the savings here are limited.

Instead, three departments would be in the firing line: the Home Office, defence and transport. No doubt, again, there are savings to be made in all of these and superfluous programmes to be axed. But all three are politically sensitive. Mr Letwin would probably find it much harder to cut them in office than to promise to from the safety of opposition.

Two further potential problems confront the Shadow Chancellor. One is what happens if the economy suffers a serious downturn, or even recession. Mr Letwin says that his plans are designed to be seen over a whole economic cycle. Even so, in difficult economic times it is not hard to envisage his strategy as it stands buckling under the strain.

The second point is the Tories’ critique of the Chancellor’s management of the public finances. Yesterday Mr Letwin quite reasonably asked why, if the economy is set to grow faster than its long-run trend, as Mr Brown expects, state borrowing is set to be so high.

“Doesn’t this begin to sound like a bad old-fashioned structural deficit?” Mr Letwin asks.

Well, yes, it does. But if he is right and a Conservative administration inherits a mess in the public finances that must be sorted out, then how much harder will it be delivering the rest of the Letwin programme? Certainly, that would make classic Conservative tax cuts yet more difficult to achieve.

Mr Letwin has made a coherent enough start to setting out his fiscal stall. But he will have a lot more questions to answer before the general election.

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