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Government must honour capital spending pledges says CC chairman

GOVERNMENT FAILURE to reach ambitious capital spending targets will call into question its whole economic policy, says

Construction Confederation chairman Alan Crane.

Speaking after the launch of the CC's pre-Budget submission, Crane said the increased public spending announced in last year's Comprehensive Spending Review was vital to the Government's overall economic plans.

Last summer Chancellor Gordon Brown announced a doubling of public sector capital spending from £7bn to £13bn over the next three years.

Failure to deliver on the CSR targets 'would be a big loss of face for the Government', said Crane. 'Capital expenditure of that extent is the cornerstone of its policy. You don't play with it willy-nilly.'

However, Crane said that following a recent meeting with construction minister Nick Raynsford he believed the Government would honour its commitments.

'On half a dozen occasions over the last few months spending on capital projects has come up [in discussions] with ministers. They have given commitment to the review and if they stay on target we will be OK,' he said.

Crane confirmed predictions of a slowdown in private sector work over the next two years. Public sector spending, especially on work procured through the Private Finance Initiative or partnering, could cushion the industry from all-out recession, he said.

In the CC Budget representation Crane also pressed the Treasury for a commitment to Sir John Egan's initiative on best value for money through partnering.

The representation calls for a statement from the Treasury and/or the European Commission that Egan's concept of best value for money 'is consistent with the language of 'economically advantageous' used in the EU Procurement Directive'.

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