Government borrowing went up to record levels at a time of economic growth when the government should have been saving. People like to blame the banks but the way debt was rising we were going to get in trouble anyway (cross ref Greece).
Labour relied far too much on economic growth (as said above - using optimistic forecasts) when planning spending. They forgot the basics of saving when times are good so you have money to spend when times are bad.
So bow we're in a position where times are bad but we have nothing to fall back on. If labour had won the election I'm afraid the axe would still be swinging.