As soon as we heard this spending review was going to be in two parts, with George Osborne outlining the main parts and chief secretary to the Treasury Danny Alexander providing the detail a day later, we should have known today was going to be a damp squib. The chancellor announced some large figures but the devil, as ever, is in the detail.
So what do we know? Capital investment in 2015/16 will be £50.4bn, which sounds great but that’s what it was in Budget 2013 in March. Also, capital investment in 2014/15 is £50.4bn, so there is no rise.
The more interesting information is in the breakdown of the figures. Looking at the capital investment by government department, the Department for Communities and Local Government capital investment falls by 36 per cent between 2014/15 and 2015/16.
This is especially concerning given that we already build less than half the number of homes we need for the number of households created each year. Even more so on social housing, where we have a waiting list of over two million households.
On the bright side, the chancellor announced £100bn of infrastructure investment over the parliament, from 2015/16 onwards.
This sounds good but we’ve had lots of announcements in the past two years of “boosts” to infrastructure from the chancellor, yet infrastructure activity fell 12 per cent last year and infrastructure new orders in Q1 2013 were 40 per cent lower than a year earlier.
So as good as the announcement is, caution is advised until we see the specific projects and where the funding will come from. If it is not public, then it is not the chancellor’s money to invest, so it is a bit rich to be claiming it – especially two years before it happens.