Spending Review: Sunak warns ‘economic emergency has only just begun’

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Chancellor Rishi Sunak has revealed the economic cost of the government’s response to Covid-19 and unveils the new National Infrastructure Strategy

During the Spending Review, Sunak warned the UK’s economic emergency had only just begun.

Rishi Sunak says the government will spend £280bn this year to get the country through coronavirus.

He said: “Our immediate priority is to protect people’s lives and livelihoods.

“But today’s Spending Review also delivers stronger public services.

“Paying for new hospitals, better schools and safer streets. And it delivers a once-in-a-generation investment in infrastructure.

“Creating jobs, growing the economy, increasing pride in the places we call home.”

As part of the Spending Review, Sunak announced “record investment plans in infrastructure”.

Capital spending on infrastructure next year will total £100bn – £27bn more than last year. Plans will deliver the highest sustained level of public investment in more than 40 years.

To build housing, the government is introducing a £7.1bn National Home Building Fund. In addition, to its £12.2bn Affordable Homes Programme.

Upgraded railways, new cycle lanes and over 800 zero-emission buses have also been announced.

Next year, total departmental spending is expected to be £540bn.

National Infrastructure Strategy

The government has also published a comprehensive new National Infrastructure Strategy. Within this includes the announcement of a new UK infrastructure bank.

Headquartered in the north of England, the UK infrastructure bank will work with the private sector to finance major new investment projects across the UK – starting this spring.

Industry reaction

Steve Radley, CITB policy director, said: “The Chancellor’s commitment to a large increase in infrastructure spending next year and publication of the National Infrastructure Strategy give the construction industry greater confidence about the future work pipeline.

“It is now critical that the right skills and training interventions are put in place to help people benefit as a result of this investment and give the industry the skills it needs.

“A new route from FE into industry, through the expanded construction Traineeship, reform of the Apprenticeship Levy and the prioritisation of construction skills in the government’s National Skills Fund and new Levelling Up Fund will be essential in doing this.”

Brian Berry, chief executive of the FMB, commented: “Local builders stand ready to support a strong and green economic recovery, but the statement from the Chancellor today fell far short.

“We look to the National Infrastructure Strategy for more detail, but no mention in the Chancellor’s speech of low carbon homes or green jobs is unacceptable given the challenges we face.

“Confirmation of investment in further education and skills is welcome, as is the announcement of the National Infrastructure Bank.

“It’s important that local builders have access to both, if they are to provide the jobs, homes and growth the country needs coming out of the pandemic.”

Debbie Dore, chief executive of APM, said:  “We hope today’s announcement will provide the long term pipeline of infrastructure and other strategic projects needed to turbo-charge recovery and a sustained future pathway for successful delivery.

“As the Chancellor said, “projects must have real impact.” We agree, but this commitment must be backed by investment in the skillsets and training essential to underpin this.

“Greater investment as well as focus on project professionalism will be required to support the proper inception, delivery and completion of projects both now and in the future.”

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