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Chancellor's Budget once again fails to deliver on infrastructure, expert says

The Chancellor has again failed to deliver on his commitment to boosting growth through infrastructure investment, an expert has said, as the 2013 Budget allocated additional funding from 2015-16.  20 Mar 2013

Kate Orviss of Pinsent Masons, the law firm behind Out-Law,com, criticised George Osborne for his "complete lack of clarity" regarding how the money will be spent and for taking no immediate action to stop the "drain" of investors and contractors looking for opportunities overseas.

According to the Budget document (112-page / 3.2MB PDF), an additional £3 billion annually will be allocated to capital spending from cuts in government departmental budgets. However, details of how the money will be used will not be published until the Spending Round in June.

"The Chancellor was right to point out that we are in a global race for investment and jobs," Orviss said. "Sadly the lack of real opportunities announced by this Government leaves the UK less and less attractive in the global market. The Government claims to see infrastructure as a key element of its growth strategy but has singularly and repeatedly failed to deliver budget after budget. And time is running out, as even announcing new major projects now won't deliver growth in the short term."

"Now is the time to start delivering before investors and contractors look to exploit other opportunities. Major British contractors are already looking elsewhere such as India and Sub-Saharan Africa. The drain of experience from the UK will continue if the UK Government delays real announcements on infrastructure projects," she said.

In his speech accompanying the Budget document, Osborne said that allocating "extra savings from government departments" to capital spending would amount to an additional £15bn in investment over the next decade.

"We're already supporting the largest programme of investment in our railways since Victorian times – and spending more on new roads than in a generation," he said. "We're giving Britain the fastest broadband and mobile telephony in Europe. And the Treasury is now writing guarantees to major projects, from supporting the regeneration of the old Battersea Power Station site to building the new power stations of tomorrow."

The Government would also make greater use of independent advice on major projects, he said, as well as using the "expertise" of new Treasury advisor Paul Deighton to improve its delivery. Deighton, who was previously the chief executive of the organisation tasked with planning and delivering the London Olympics, made a series of recommendations to improve the Government's approach to infrastructure delivery following last year's Autumn Statement.

Infrastructure expert Graham Robinson of Pinsent Masons said that the housing would provide the "most likely source of growth" for the construction sector in the short term, following the Budget announcements. The Government has published a range of measures to help homebuyers, including both first-time buyers and those looking to purchase a newly-built home. It has also committed to the construction of 15,000 new affordable homes.

"Housing is a large sector for construction, and the Government's support for housing will also help drive jobs," Robinson said. "Construction has already lost 400,000 jobs since the start of the financial crisis, and the Chancellor's boost to the Help to Buy scheme will help generate jobs in the construction sector."

Recent Infrastructure Experience