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Spending review 2015 | Scepticism as Osborne pledges £73bn for roads and rail

motorway

Chancellor George Osborne has set out plans to spend £73bn on roads and rail over the six years to April 2021 - but slashed the Department for Transport’s revenue budget by more than a third.

Osborne said in last week’s Spending Review announcement that investing in long-term infrastructure was one of four key objectives for the government.

He allocated £34.5bn for Network Rail, £15.2bn for the roads investment strategy, £15.8bn for High Speed 2 (HS2), £6.9bn for highways maintenance and £500M each for “local sustainable transport” and “large local roads”.

Department for Transport capital spending will soar from £6.1bn in 2015/16 to £11.4bn in 2019/20.

But its day-to-day spending pot will plummet from £2.6bn to just £1.8bn over the same timeframe. After inflation, this works out at a 37% revenue cut.

Osborne hailed what he described as the biggest increase in transport capital spending in a generation.

“That funds the largest road investment programme since the 1970s,” he said.

“It means the construction of HS2 can begin. The electrification of lines like the Trans-Pennine, Midland Main Line and Great Western can go ahead.

“We’ll fund our new Transport for the North body to get it up and running.

London will get an £11bn investment in its transport infrastructure,” said Osborne.

There will be £250M for roadworks to relieve the pressure on roads in Kent from Operation Stack, and £300M to boost cycling.

Osborne also announced £5bn for roads maintenance, including a permanent pothole fund.

Contractors welcomed the announcement. “Today’s announcements are good news for the construction sector, formally committing funds to vital infrastructure projects such as HS2, the Northern Powerhouse and London-wide transport,” said Civil Engineering Contractors Association chief executive Alasdair Reisner.

“The confirmation of funding for key projects will enable the construction industry to plan for the future to deliver strategic projects in an innovative and efficient manner.”

But Aecom director John Hicks, was sceptical about the announcements.

“The chancellor’s rhetoric of ‘We are the builders’ didn’t appear to be accompanied by significant new money across the board,” he said

“With transport at the sharp end of departmental revenue cuts, the challenge now is for the government to play its part in delivery as the number of public servants further erodes.

“Are the right people with the right skills, governance and procurement tools in the right place within the public sector to allow the builders to move in?”

 Read more on the spending review here

 

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