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Chancellor curbs Whitehall spending in favour of ‘shovel ready’ projects

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December 4 2012

Chancellor curbs Whitehall spending in favour of  ‘shovel ready’ projects
Chancellor of the Exchequer George Osborne has heeded calls to migrate spending from current to capital expenditure in a bid to stimulate the economy through increased funding for repair, maintenance and infrastructure.

Whitehall departments (excluding health, education and international development) will be told to shave 1% from their budgets next year and a further 2% from their budgets the following year to release £5bn for schools, science and transport.

Welcoming the news Construction Products Association chief exec Diana Montgomery said, ‘Government has grasped the importance and the need for improved infrastructure as part of the solution for growth. It is vital that the Chancellor focuses on capital investment in ‘shovel ready’ repair and maintenance projects that are quick to get off the ground with framework contracts and planning already in place.

“Current spending, such as spending on welfare and pensions, is set to rise from £629 billion to £674 billion by 2013/14, yet government is cutting capital investment, by 21% over the same period, even though independent economic research shows that for every £1 invested in construction, the economy benefits by £3.”

1 Comment

Jimbob Tanktop
#1 Posted by Jimbob Tanktop on 4 Dec 2012 at 12:15 PM
So by cutting the amount of money they spend almost everywhere by an initial 1%, then a further 2%, the government will enable the economy to boom?

It's genius moves such as this that makes economics a mystery to mere plebs such as me, who at first glance thought this was simply a way to drape even more cuts in a bit of window dressing.

If only I'd gone to Eton, I might have been able to figure out the brilliant, labyrinthine process that reaches such a conclusion. God bless Kate and Harry...or is it the other one?

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