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Autumn Statement 2011: £5bn boost for infrastructure now plus £5bn more in next parliament; UK needs 'lasting investment'

Chancellor George Osborne today confirmed that the government had identified £5bn extra for infrastructure funding for this parliament – including £1bn for Network Rail - and a further £5bn beyond that.

He opened his Autumn Statement this afternoon saying that the UK needs “lasting investment” in infrastructure and said had found “significant savings in the current budget” that would fund infrastructure, regional growth and education, as well as helping young people find work. This follows on from chief secretary to the Treasury Danny Alexander’s revelation on Sunday that the government had clawed back £5bn of underspend to help fund infrastructure.

The statement confirms that £6.3bn more will be spent on infrastructure in the next three years, although £1.3bn had already been announced. Network Rail will get £1bn and £1.2bn will be spent on building new schools.

“The savings I’ve announced in the current budget have enabled me today to fund, pound for pound, £5bn of additional public spending on infrastructure over the next three years. New spending by Network Rail, guaranteed by the government, will bring £1bn more,” he said.

“And we are committing a further £5bn to future projects in the next spending period, so the planning can start now.”

National Infrastructure Plan

Osborne said that today’s National Infrastructure Plan (NIP) would name 500 projects valued at £250bn that the government wished to see being built “to 2015 and beyond” (see attached spreadsheet below). It also identifes 40 priority projects and programmes that a new Cabinet infrastructure committee will oversee.

He added that 35 were being given the go-ahead today, although several are schemes that have already received formal backing and are merely being accelerated. The 35 schemes include: Electrification of the transpennine express between Manchester and Leeds; the Manchester Airport and Crewe link roads; the Tyne and Wear Metro; work on the A45, the A43, the A453, the Kettering Bypass and the M1 and M6, the Bristol link road; and the A380 bypass; the A14; a new railway link between Oxford, Milton Keynes and Bedford; and a new crossing of the Lower Thames.

Osborne added that the government would explore all the options for maintaining the UK’s aviation hub status, “with the exception” of a third runway at Heathrow.

He said that in London he would work with mayor Boris Johnson on options for other new river crossings, for example at Silvertown, and that the government supported the extension of the Northern Line to Battersea in partnership with the private sector.

Devolved administrations in Scotland, Wales and Northern Ireland will get their Barnett share, he said.

“This all amounts to a huge commitment to overhauling the physical transport infrastructure of our nation,” he said.


The chancellor said that further restraint on public sector pay – by allowing only 1% pay rises after the end of the current two year pay freeze rather than 2% – would help create a saving of £1bn a year by 2014/15. He also said that healthy spending on international developement would be adjusted down.

He continued on to say that he was today setting out spending for the the first two years – 2015/16 and 2016/17 – after the Comrehensive Spending Review period. There would be a fall of 0.9% a year in real terms – the same rate as current review period – excluding increase in infrastructure spending.

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