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Mixed reception for Darling's spending plans

Rail and waste infrastructure were the big winners in a Government Comprehensive Spending Review (CSR) that was met with mixed feelings by engineers this week.
Having already confirmed £5bn of government funding for Crossrail last week, chancellor Alistair Darling was left with few surprises to reveal on transport spending on Tuesday as he outlined spending to 2011.

Darling repeated the commitment in July's High Level Output Specification for £15bn to be spent on rail, and overall Department for Transport funding was set to rise in line with expectations at 2.25% above inflation.

Atkins transport planning managing director Andy Southern said that this left little money for other modes of transport.

"The increase in transport spending at 2.25% in real terms will actually become a net decrease if we continue to see an escalation of construction costs," said Southern.

"This could see a large number of schemes fighting over an ever-shrinking pot of money."

Southern added that this tightness in funding might be tempered by the CSR's confirmation of a number of proposals included in the Lyons review of local government.

These include less ringfencing of local authority grants from Whitehall and allowing councils the ability to generate a supplementary business levy to fund infrastructure schemes deemed of benefit to the local business community.

Darling was able to reveal that funding for waste infrastructure through the Private Finance Initiative (PFI) would rise from £280M in 2007/08 to £700M in 2011, totalling £2bn over the CSR period.

Ernst and Young infrastructure advisory partner Rob Winchester said this would see a significant rise in the number of waste facilities procured using PFI.

"PFI credits typically cover 25% of capital costs of facilities," added Winchester.

"There is a Government aspiration to get this up to 50% to encourage more and more local authorities to build waste facilities using PFI," he added: "Whether there is enough money in the pot to meet these aspirations remains to be seen."

The Nuclear Decommissioning Authority also received a boon in the form of an extra £338M to reduce the risk of the decommissioning programme.

Investment in the soon-to-be-established Environmental Transformation Fund (ETF) was meanwhile confirmed at £370M over the CSR period.

The ETF, first mooted in May's Energy White Paper, will invest in research into green technologies.

Darling was also criticised by the Association for Consultancy and Engineering (ACE) for scaling back funding for vocational training.

ACE chief executive Nelson Ogunshakin said he was disappointed by education spending rising at a lower rate than in recent years.

"Only through investment in skills development can the UK ensure it remains at the forefront of innovation and efficiency in the global economy," he said.

Comprehensive spending review at a glance

- £5bn for Crossrail
- £15bn for Network Rail
- £bn in Waste PFI credits
- £38M extra for nuclear decommissioning
- New £370M fund for renewables
- Less ringfencing of local authority grants
- Slowing of funding for vocational training
- Planning gain supplement scrapped
- 20 new hospitals and a new primary school in every local authority by 2011
- Flood cash climbs to £800M

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