A controversial £2bn tunnel under the ancient monument of Stonehenge received the go-ahead in a Budget that pledged billions of pounds to get “Britain building again”.
But with Rishi Sunak, the chancellor, focused on the response to the coronavirus, there were few details of what other projects are part of the infrastructure plan, which is key to the government’s levelling up agenda for the regions.
The government will provide more details on which projects it plans to finance in the National Infrastructure Strategy and the National Infrastructure Pipeline, both of which were due to be launched alongside the Budget but have been delayed. Mr Sunak said on Wednesday they would follow over the “next few months.”
The £2bn tunnel, which aims to remove a notorious bottleneck on the A303 near the World Heritage site of Stonehenge, was one of the few projects identified by Mr Sunak. The road provides the most direct link between London and the Tory heartlands of Somerset, Devon and Cornwall.
Although Mr Sunak announced £600bn in capital spending over the next five years just £82bn is new money — below the £100bn promised in the Conservative party’s election manifesto.
The extra funds equate to the biggest real terms increase in public investment since 1955, although at just 3 per cent of GDP it is considerably lower than the levels of investment in the three decades from the 1950s to the 1970s, said Noble Francis, economics director at the Construction Products Association.
Infrastructure experts said the increased spending was welcome but warned that it may not be enough to deliver the boost needed after a decade of stop/start funding on road, rail and flood defence funding.
Graham Atkins, researcher at the Institute for Government, said the Budget contained “few commitments to maintenance spending — risking the quality of existing assets deteriorating”.
Nevertheless, the government’s decision to raise borrowing marked a key difference from previous Budget commitments. Government pledges of multibillion pound infrastructure spending dating back to 2010 had relied on matching financial support from the private sector, which often never materialised.
“Government announcements of hundreds of billions of pounds never actually match reality as programmes constantly get reviewed, cancelled or pushed into the next five-year spending period,” Mr Francis said.
One of the few other projects identified, alongside the work on the A303, was the Lower Thames Crossing, a new £6bn road tunnel under the Thames that will connect Kent and Essex.
Both projects had previously been earmarked for funding via the failed private finance initiative model but are now expected to be paid for in full through borrowing. The are already included in existing road spending plans.
Jon Hart, infrastructure partner at law firm Pinsent Mason, said there was “a lack of details behind the numbers and what these numbers might mean in practice for the sector, given how long schemes take to come to market”.
The Local Government Association, which represents 350 local authorities, said there would still be a £6.5bn annual funding gap by 2025 leaving concerns over the maintenance of local roads and other infrastructure projects.
Although Mr Sunak announced £27bn on roads — including £2.5bn on potholes — this is lower than the £28.8bn figure in the 2019 Conservative manifesto and does not represent an increase on existing roads spending plans.
A £2.5bn capital ‘potholes fund’, or £500m annually over the five-year spending term, is a “fraction” of the £1.5bn a year “needed to deal with decades of underfunding, which have led to deteriorating conditions and a rising one-time catch up cost to fix the problem,” according to Rick Green, chair of the Asphalt Industry Alliance.
“What’s needed is sustained investment in effective road maintenance to improve the condition of our local roads and help prevent potholes forming in the first place,” he added.
The chancellor also confirmed plans to provide a £5bn subsidy to support the telecoms industry to connect the most rural 20 per cent of the country to faster broadband. A £5.2bn package of investment in flood defences over six years had also been heavily trailed and follow cuts earlier in the decade.
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