The construction industry will welcome the announcement that capital funding will be some £2bn a year higher than previously announced, says construction intelligence firm Glenigan.
The Department for Transport has faired particularly well with a capital budget of £30.8bn. This is more than was invested during the past four years and will enable major projects such as Crossrail & Birmingham New Street station to go ahead.
Nevertheless overall government investment is still being cut back, from £59bn this year to £47bn by 2014/15, although the government is looking to the private sector and private finance to pick up some of the slack.
Social housing sector faces the sharpest fall in capital funding; a 71% fall over the next three years. However the Government still plans to build 150,000 new homes and to press on with the Decent Homes programme by freeing up rental controls and allowing social landlords to privately fund investments.
Similarly the Government’s Green Deal is intended to accelerate the upgrading of the existing housing stock by encouraging home energy efficiency at no upfront cost to homeowners and also allowing the Government to phase out the Warm Front programme.
Elsewhere departmental capital budgets are being squeezed. Whilst NHS funding is set to rise in real terms over the next four years, health capital spending is set to fall back slightly although a number of major hospital projects are to go ahead. The demise of the Building Schools for the Future programme is reflected in the Education Departments capital programme which falls from £7.5bn to £3.4bn by 2014/15.