Spending Review 2013: Our economy might be out of intensive care but the infrastructure sector is on the verge of flatlining, says Pinsent Masons

26 Jun 2013 | 02:13 pm | 1 min. read

Commenting on the announcements made by the Chancellor in today's Spending Review, Patrick Twist, Infrastructure Partner at Pinsent Masons, said: "The Chancellor's speech on infrastructure announcement is yet another wish list. Announcing that additional money will be available for infrastructure projects over the rest of the decade doesn't mean it's going to be spent in the timescale that the Chancellor is talking about. Our economy might be out of intensive care but the infrastructure sector is on the verge of flat lining.

"We welcome the commitment to increase infrastructure spending but there's no certainty that these projects will be delivered. Additional funds for rail infrastructure would be very welcome and Network Rail undoubtedly would be able to ensure that those funds are spent on capital projects. There is a separate question here as to how these additional funds would need to fit in with the Office of Rail Regulation's requirement that Network Rail reduce their overall spend on assets. 

"If the additional funds being available for roads are to be invested it will be important that Government doesn’t use overly complex procurement models.  Any new models will need to be as straightforward as possible. They will always need to address the intractable problem as to how road users may be required to take their car out of the garage.  Maybe Danny Alexander will have the answers tomorrow.  

“Given that the Office for National Statistics said last week that April spend on infrastructure repair and maintenance was down 21.6% on March's figures, any news about future investment is obviously welcome. 

“However, the big numbers George Osborne has been talking about are not just a long way down the road but possibly over the rainbow too.  

“Overall it's too late to make real difference to the struggling construction sector in the short term as most of this money will be spent in the next parliament leaving the infrastructure sector in limbo until the next election. The lack of shovel ready projects has been the bane of the National Infrastructure Plan (NIP) since it was first announced. Today's announcement hasn't changed this position – it's groundhog day all over again."

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