Chancellor Gordon Brown has raised the government’s capital expenditure in public services over the next three years by 7.5% in real terms.
Alongside the 50% increase in social housing, the government has pledged to increase its capital budget in the education sector from £3.8bn this year to £5.5bn in 2007/08.
In combination with alternative funding routes, such as the PFI, overall capital investment in education is to rise from £5bn in 2004/05 to £7bn by 2007/08.
As announced in this year’s budget, health spending is to receive an average increase of 7.2% a year over the next three years to 2007/08.
Transport spending by the Department for Transport will grow 4.5% a year on average, with expenditure rising from £10.4bn this year to more than £12.8bn by 2007/08. The figures exceed the funding profile set out in the 10-year transport plan for the three years covered by the review.
Michael Ankers, the chief executive of the Construction Products Association, welcomed the government’s spending plans, but warned that the increase would provide only 10,000 new homes a year, or about half of what Kate Barker’s review into housing supply said was necessary. However, he said it was a “step in the right direction”.
Transport capital spending has been slashed by 10% next year
Michael Ankers, CPA
Ankers added that the chancellor’s investment in transport infrastructure gave cause for concern. He said: “The spending review announced an increase in spending over and above current levels of expenditure. However, transport capital spending has been slashed by 10% next year and we remain concerned that the roadbuilding programme will be the loser.”
He added that it was reassuring to see that the government was committed to its spending proposals for schools and health facilities.
He said: “The targets the government has set for improving such facilities require a long-term funding commitment to help ensure the industry delivers best value solutions for the investment that is being made.”