THE CHANCELLOR yesterday set aside an extra £3bn a year to spend on infrastructure projects, but businesses voiced their impatience about slow progress on the so-called shovel-ready schemes that are struggling to boost the building industry.
Details on the additional spending, funded by cuts to government departments, will not be set out until a review on 26 June, George Osborne said.
And the chancellor disappointed firms with a lack of progress in ongoing projects. He stayed mute on his successor to private financing that was unveiled in December, dubbed PF2, and revealed that the government’s delayed Pension Investment Platform had garnered £1bn in private sector funding, less than the £2bn claimed in October.
“The government needs to do more to demonstrate to global investors that UK infrastructure is a prize worth pursuing,” said the CBI.
Deloitte’s head of infrastructure Nick Prior was sceptical that yesterday’s measures will be enough to change the fortunes of the building trade.
The weak construction industry was the main drag on Britain’s GDP growth last year, putting the country back into recession.
“The fact remains that the construction sector has contracted in each month since October last year and new orders are down by nearly 40 per cent from their peak in 2007,” he said. “This is despite many announcements and initiatives that have not been able to arrest this decline.”
Osborne also stopped short of setting up an independent body to ensure that large projects keep to timetables, following a review from former 2012 Olympics chief executive Paul Deighton.
The UK Guarantee Scheme, which provides state backing to privately-funded projects, has attracted more than 100 enquiries, Osborne said.