CHANCELLOR GORDON Brown this week put his money where his mouth was and doubled public capital investment from £7bn to £13bn over the next three years.
Addressing the House of Commons on Tuesday, Brown said: 'We are raising capital investment for a fixed period of three years in order to tackle a backlog of under-investment.' Increases in current spending, on the other hand, will be capped at 2.25%pa.
The extra cash is being provided through the Investing in Britain Fund, with most flowing directly into departmental budgets.
However, £2.5bn will be retained by the Treasury in a Capital Modernisation Fund, designed to 'provide resources for innovative capital or PFI projects which improve key service or public infrastructure'. Departments will compete for a share of this Fund.
Departments will now have three year budgets and for the first time will be able to transfer unspent funds from one year to the other. But they will also have to produce Departmental Investment Strategies, including efficiency improvement targets agreed by the Treasury, which will have to be met to secure funds.
The big winner from the Government's Comprehensive Spending Review was the Department of Health. Brown described plans as 'the largest hospital building and modernisation programme this country has seen.' The initial increase in funding is to be delivered through additional private finance and the sale of DH land, with public sector funding only climbing after 2000.
Schools are another winner, with capital investment rising from £742M during the current year to £1,942M in 2001/02.
Public funds aimed at boosting urban regeneration will be re-organised once again and boosted by the new £800M New Deal for Communities. This money will be ploughed into job creation.