The Construction Productions Association says that move to reduce council tax could effect spending on schools, housing and local roads.

Gordon Brown’s decision to redirect nearly £1bn of previously allocated funds to reduce council tax could reduce expenditure on schools, housing and roads the Construction Products Association has warned.

The CPA said the announcement in the pre-Budget Report that £360m of local authority expenditure was no longer ring-fenced, meant that councils could redirect funds from repair, maintenance and improvements in schools, housing and roads.

Allan Wilen, CPA economics director, also expressed concern that £512m had been reallocated from central government departments. Wilen said that to ensure the delivery of government investment in public services, capital allocations made in the Spending Review must not be reduced.

The chancellor’s announcement that a Panel for Regulatory Accountability would be set up to examine the implementation of EU legislation was welcomed by the CPA, as were the findings of the Hampton Review, which found that the UK regulatory system was placing a disproportionate burden on small businesses.

Other measures welcomed by the CPA was the chancellor’s commitment to publish reviews of the Climate Change Levy and Aggregates Levy next spring.

  • The CPA welcomed the announcement of an additional £1bn allocation in capital expenditure for the water industry. CPA economics director Allan Wilén said: “The announcement of an additional £1bn allocation for capital expenditure should mean that water companies are better able to finance their programmes for environmental and infrastructure improvements over the next five years.”