Whitehall savings fund £3bn infrastructure investment
THE Chancellor today pledged to use Whitehall departmental savings to fund a £3bn programme in infrastructure investment in the UK.
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Tim West, partner at Ernst & Young, said: “Money spent on major infrastructure projects will give the biggest bang for buck. If £10bn is spent every year for the next three years that would pay itself back. It’s one of the most efficient ways government can spend money to kick-start the economy.”
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.
