The Chancellor’s Autumn statement has received a warm welcome from industry leaders and the Confederation of British Industry (CBI), Building reported.
500 projects were backed or brought forward as part of an updated National Infrastructure Plan and £5bn of current spending was diverted to capital projects over this parliament. £5bn of the same was earmarked for the next parliament.
The government also identified 40 priority areas of infrastructure, including Crossrail, road upgrades and energy schemes.
Treasury chief secretary Danny Alexander is to chair a new cabinet committee on infrastructure.
But the announcements came as the Office for Budget Responsibility (OBR) slashed its growth forecasts for the UK economy.
The OBR predicted growth at 0.9% for this year and 0.7% for 2012 – sharply downgraded from 1.7% and 2.5% in its last forecasts at the time of the March budget.
The statement also included plans to persuade pension funds to invest a further £20bn in infrastructure projects although industry leaders expressed doubt over the exact role of pension funds.
The Confederation of British Industry (CBI) described the autumn statement as “Plan A Plus in all but name.”
Imaginative”, “realistic”, “just excellent” were just some of the superlatives used by several construction leaders to describe the statement, Building reported.
But the UK Green Building Council described the statement as a “missed opportunity”.
While the UK-GBC welcomed confirmation of a £200m investment to drive take up of the Green Deal, it highlighted that there were no further incentives for the retrofitting scheme in the autumn statement.
Paul King, chief executive of UK-GBC, said Osborne had failed to provide a coherent strategy for making Britain more sustainable.
“References to sustainability in the National Infrastructure Plan don’t seem to be part of any kind of overarching strategy.
“This was an opportunity missed to put green growth and green jobs at the heart of economic recovery,” he said.
The autumn statement was followed by a commitment from Cabinet Minister Francis Maude to up the use of project bank accounts, Construction News reported.
As a result at least £4 billion of government spending will be paid directly to SMEs working on public sector construction.
The Cabinet Office estimates that 20 per cent of the total spending on government construction will be channelled through project bank accounts within three years.
