George Osborne has vowed to invest £50 billion a year in capital projects from 2015/16
Delivering his 2015/16 Spending Review, the Chancellor of the Exchequer promised to ‘raise our national game’ by investing £300 billion in capital projects by the end of this decade.
Speaking to the House of Commons today, Osborne said: ‘Successive governments of all colours have put short term pressures over the long term needs and refused to commit to capital spending plans that match the horizons of a modern economy.
‘Today we raise our national game. This will mean that Britain will spend on average more as a percentage of its national income on capital investment in this decade – despite the fact money is tight – than in the previous decade, when government spending was being wasted in industrial quantities.’
Treasury chief secretary Danny Alexander will unveil specific plans for more than £100 billion of infrastructure projects tomorrow.
Plans to deliver funding for up to 180 new free schools, 20 new studio schools and 20 university technical colleges a year were also announced.
Osborne also pledged a £3 billion investment in affordable housing, £9 billion worth of capital funding for the Mayor of London and reiterated the government’s commitment to HS2 and the case for Crossrail 2.
In response, Labour shadow chancellor Ed Balls said government infrastructure funding had fallen 50 per cent in the first three months of this year.
He said: ‘There is no point boasting about infrastructure investment in five or ten years’ time – we need action now.’
Jeremy Blackburn, RICS Director UK External Affairs, said: ‘While austerity will be with us for years, action to deliver infrastructure and housing must be the focus of the here and now. Beyond being a driver of growth, infrastructure is the fabric of our everyday lives that must remain efficient and well maintained. If it was ever in doubt, it is now absolutely clear that Government recognise spending on housing and infrastructure is vital to the recovery of the UK.
‘Targeted investment in road, rail and homes could finally generate sustained growth in the British economy, so it is heartening to see the additional investment put aside for 2015/16. However, tomorrow, the Chief Secretary’s announcement must ensure that this funding goes where it is so desperately needed. The repair and maintenance of the transport and energy network and building of new homes should be Government’s first priority.
‘Building of new homes is way behind target, with construction workloads at historically low levels as shown by the latest RICS markets surveys, but the £3 billion extension to affordable housing will go some way to kick starting construction of much needed social housing.
‘Recovery is still incredibly fragile. Well planned infrastructure projects commissioned in the right places and at the right time must deliver growth, homes and jobs in the next 18 months, providing immediate economic returns and much needed work for the construction sector.’
Jon Poore, public sector director at Turner and Townsend, said: ‘With its references to Britain’s past as the place “where the future was invented”, the Chancellor’s speech was long on vision, but short on detail. But the parallels were compelling - Britain is to spend more on roads than it has for half a century, and more on rail than it has since the Victorian era.
‘Two and half years after the Chancellor pledged to do something very similar with the National Infrastructure Plan, cynics will be queuing up to say they’ve heard it all before. That sense of deja-vu extends to the numbers being quoted. £50.4billion of capital investment in 2015/16 is exactly the same as that previously announced for 2014/15.
‘Maintaining that level of government spending is admirable, but still fails to address the elephant in the room - the private sector’s continued reluctance to heed the Chancellor’s calls for it to invest in infrastructure too.’The Chancellor left many questions unanswered, including exactly which are his priority projects for infrastructure investment. The industry will be waiting anxiously for more clarity from Danny Alexander on Thursday.’