Capital spend avoids the axe

THE CONSTRUCTION and transport sectors were relieved by yesterday’s news that the government will not hack into capital spending

Chancellor George Osborne said careful choices would have to be made on what the government will spend on infrastructure.

Delivering the emergency Budget, Osborne said: “Well judged capital spending by the government can help provide the new infrastructure our economy needs to compete in the modern world.

“It supports the transport links we need to trade our goods, the equipment we need to defend our country, and the facilities we need to provide quality public services.”

Apart from the £6.2bn in savings, worth £2bn a year until 2016, which was announced earlier, the government said that it will not cut further into capital spending.

Osborne said that assessing which projects are significant to economic recovery will be decided during the spending review in the autumn.

The government has also established Infrastructure UK, which will be chaired by Arup’s Terry Hill, and will work within HM Treasury to seek greater private sector investment in infrastructure.

The news is good for ventures such as the £16.5bn Crossrail project, which looked like it would be facing cuts.

Ashley Steel, KPMG’s global chair for infrastructure and transport said: “Amongst the painful spending cuts and tax rises there is one piece of really good news – the chancellor’s capital spending plans. They will provide a boost to transport and the construction industry and therefore will be good for jobs and the economy.