£3bn freed-up Whitehall cash for infrastructure
THE Chancellor today pledged to use Whitehall departmental savings to fund a £3bn programme in infrastructure investment in the UK.
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Mr Osborne said the Government was already supporting the largest programme of investment in the UK’s railways since Victorian times – and spending more on new roads than in a generation.
It was also supplying Britain the fastest broadband and mobile telephony in Europe, while investment was also taking place in new power stations.
“We’ve switched billions of pounds from current to capital spending since the spending review but on existing plans, capital spending is still due to fall back in 2015-16. I don’t think that’s sensible,” he said.
“So by using our extra savings from government departments, we will boost our infrastructure plans by £3bn a year from 2015-16.
“That’s £15bn of extra capital spending over the next decade.”
He said by investing in the “economic arteries” of the country, growth would flow to all parts of the country.
“Public investment will now be higher on average as a percentage of our national income under our plans than it was in the whole period of the last Government.
“In June, we will set out long term spending plans for that long term capital budget,” he added.
The Government would also be using the expertise of Paul Deighton, the man who delivered the Olympics and who now serves in the Treasury, to improve the capacity of Whitehall to deliver big projects and make greater use of independent advice, added the Chancellor.
Martin Portnoy, tax partner at Ernst & Young, said: “Money spent on major infrastructure projects will give biggest bang for buck. If £10bn spent every year for next three years that would pay itself back. It’s one of most efficient ways government can spend money to kick start economy.”
Andrew Davies, partner in the finance & projects group at law firm DLA Piper said: “The Government’s continued commitment to investment in large scale infrastructure projects is encouraging to see.
“The Government is definitely moving in the right direction by voicing its support for the nuclear and carbon capture and storage projects.
“The deliverability of wider infrastructure projects in transport and social infrastructure would be boosted by similar additional support being offered by Government and it following through on those commitments.”
