Osborne to raise extra £5bn for construction projects – again

Aaron Morby 7 years ago
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George Osborne is planning to squeeze Whitehall current spending budgets again to raise an extra £5bn for capital projects.

The Chancellor will demand departmental savings of 1% next year and 2% in 2014/15 to raise extra cash for construction projects.

At least £1bn of this has been earmarked to build an extra 100 new free schools and academies, but the move raises hope that there will be extra cash for housing as well as transport schemes.

Construction leaders will be sceptical about the “new” money following a similar announcement in last year’s Autumn Statement.

The Government has launched two national infrastructure plans since coming to power in 2010, but construction spending has fallen 11% from a year ago and is expected to drop more in 2013.

Osborne pledged £5bn of infrastructure investment on road and rail projects in 2011 which were set to start “imminently” – but so far only £750m has come through.

Last year’s drive to attract £20bn of infrastructure backing from pension funds has also seen only £700m come forward so far.

Rachel Reeves MP, Labour’s Shadow Chief Secretary to the Treasury, said: In last year’s Autumn Statement, Ministers boasted that their infrastructure plan would boost the economy, but none of the road schemes they announced have even started construction.

“The Government needs to ensure that this funding urgently gets through on the ground.”

 

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