AN unexpected perk of the Comprehensive Spending Review was an increase of £2m in capital expenditure on the figure announced in the June budget.
Osborne says capital spending will be £59.5bn this year, falling to £50.7bn in 2011-12, £48.5bn in 2012-13, £45.6bn in 2013-14 and rising again to £47.2bn in 2014-15.
This is a full £2bn higher than Osborne set out in June, in which the chancellor axed £11bn worth of capital projects, and has been described as a silver lining to the deep cuts.
The money will safeguard a host of infrastructure projects including a new bridge over the Mersey at Runcorn and funding for new hospitals including the St Helier, Royal Oldham and West Cumberland projects.
Osborne said it was necessary to “ruthlessly prioritise” capital spending on areas of the economy that will promote growth. High on his list was investment in green infrastructure, including ear-marking £1bn for a “green investment bank”.
He also set aside £1bn for a carbon capture project and £200m for offshore wind technology.
Osborne said: “When money is short we should ruthlessly prioritise those areas of public spending which are most likely to support economic growth, including investments in our transport and green energy infrastructure, our science base and the skills and education of citizens.”
Richard Lambert, director-general of the CBI, said maintaining capital expenditure will help to promote economic growth. Cultural developments will benefit, with extensions to both the Tate Gallery and British Museum saved by the additional funds.