The deficit in 2009 was largely caused by a huge hole in our tax take created by the property bust.  The Government had become very dependent on stamp duties and capital gains taxes levied on property transactions and when that market cratered, so did the tax take.  In addition the "feel good factor" previously created by rising house values (and shares) and a buoyant jobs market suddenly disappeared and consumer confidence and expenditure dived - also effecting the more general tax take.

Now, of course, all these factors are compounded by the Government having to introduce swinging capital and ongoing expenditure reductions to try and rein in the deficit.

Basically the whole edifice had been built on the assumption of ever rising property prices with, at most, a "soft landing" or mild correction every now and then.  As you know, the "market is always right".

notes from no w here