21 October 2010
The UK government’s spending review, the details of which were announced yesterday, is one of the most important events in the UK for many years.
Chancellor George Osborne set out details of the biggest programme of public spending cuts attempted by a UK government since the Second World War. Unveiling his Spending Review in the Commons, Mr Osborne slashed £81 billion from the budget and confirmed the sectors where investment would be made. Spending on infrastructure will be a priority and the National Infrastructure Plan will be launched next week.
Halcrow’s economics team, led by chief economist Andrew Price, has undertaken an in-depth analysis of the infrastructure measures that have been announced – and has examined the impact on the sectors in which Halcrow works.
A copy of Halcrow’s analysis can be downloaded from our economics and business solutions blog site on halcrow.com. Click here to view the blog, access our report and have your say.
Key industry sectors and observations included in our analysis are:
Transport: to support economic growth, the chancellor preserved a number of major transport investment schemes which were believed to be at risk. He also confirmed that a detailed statement on transport will be made the week beginning 25 October, along with the National Infrastructure Plan.
Energy and environment: the energy and environmental decisions announced, together with forthcoming energy market reforms, represent a reasonable package of measures to move towards a low carbon economy and provide energy security. However, to make the government’s vision a reality, the private sector needs to be willing to make significant investments to aid the development of a sustainable growth path for the economy.
Local government: the Spending Review provided significant new and devolved powers for local government, but the reductions in funding will make realisation of the ‘Big Society’ and improved delivery of local services a real challenge.
Business and overseas aid: soft infrastructure was preserved by maintaining spending on science and skills, including a greater focus on commercialising to support economic growth. The government reiterated its promise to meet the United Nations’ commitment on international aid as set out in the Millennium Development Goals.
Devolved administrations: following the cuts in England, the devolved administrations of Scotland, Wales and Northern Ireland also experience a similar squeeze in their purse strings.
Other documents, providing more details on the cuts and reforms in specific infrastructure areas, are likely to be published in the days and weeks after the spending review. The team will monitor these announcements and publish further assessments on the blog.