GOVERNMENT MOVES to lump highway maintenance spending into the same budget as new roads expenditure could lead to cuts, materials producers said this week.
Last week the Office of National Statistics (ONS) announced that from next month, some of the government's annual £3.5bn highway maintenance budget will be reclassified as capital spending.
urther details of the announcement are expected next week.
The change will take maintenance spending out of the revenue budget and put it in the same budget as spending on new roads.
Construction Products Association chief economist Alan Wilen said the move would help Chancellor Gordon Brown meet his 'golden rule', under which he must match revenue budgets with tax receipts over the economic cycle.
Government borrowing is allowed to pay for capital spending provided levels do not push national debt to more than 40% of gross domestic product.
'All that money will come off the current revenue spending fi gures, which is very helpful for the Chancellor because things were looking a bit tight, ' said Wilen.
But he warned that the move could make it easier to raid road maintenance funding to pay for other public services.
'It gives the Chancellor more room for manoeuvre on maintenance spending.
'There is a danger that putting maintenance in the capital pot means it will compete against new road projects for example.
That could be a problem.' Wilen fears that if national debt increases, the new single pot roads budget would be squeezed, with maintenance losing out.
'It could be storing up trouble in the future if capital spending is capped by the prudent borrowing rule, ' he said.