Infrastructure investment – some good projects, but no new money
If yesterday was the day that the Chancellor, George Osborne, took on the mantle of Ebeneezer Scrooge, today Danny Alexander, the Chief Secretary to the Treasury, tried to play Santa Claus. So how many prezzies did he actually bring?
There was much in the Chief Secretary’s speech this morning that was valuable and it would be churlish not to welcome it. Among the highlights were the following:
- On schools, Danny Alexander said he would re-build 261 of the worst schools as part of the Priority School Building Programme, completing this work in 2017, two years early;
- A rising capital spend for the health budget in 2015, with the redevelopment of the Royal Liverpool Hospital next year;
- A further £150m for health research infrastructure;
- On housing, a guarantee that social rents will be set at CPI plus one per cent until 2025;
- £3bn more capital to deliver 165,000 affordable homes by 2015;
- A variety of initiatives on rail investment, including upgrading stations such as Kings Cross, Manchester Piccadilly and Birmingham New Street, 850 miles of electrification, a funding and financing study into Crossrail 2, and a funding envelope of £50bn for High Speed 2;
- £10m a year for a Regional Air Connectivity Fund;
- £28bn over the six years from 2014 in enhancements and maintenance of national and local roads;
- A further £250 million to ensure fixed superfast broadband reaches 95% of the population by 2017 and a commitment to ensure that at least 99% of the UK have access to superfast broadband –whether that’s fixed, wireless or 4G – by 2018;
- An additional £800m for the Green Investment Bank, on top of £3bn already committed, and – for the first time – the power for the GIB to borrow half a billion pounds in 2015-16 from government.
So what’s not to like? Nothing and I do like it. But is it enough? Capital spending has been cut by almost half since 2010 and it appears that there is no change to total spending levels being announced today to those that were specified in this year’s Budget. This means that any actual increases in departmental capital budgets – welcome though they may be – will come at the expense of overall capital budgets elsewhere. This is a real missed opportunity, given that it is so cheap to borrow money at the moment. What’s more, we need action to boost growth and jobs now, not in two years time.
Sorry, Danny. Not good enough.