Budget 2009 - Who benefits from capital fiscal stimulus?
Last November’s Pre-Budget Report announced the Government's commitment to bringing
forward £3 billion of capital spending from 2010-11 into 2009-10. Now we have some
specifics on where the money will be spent.
Schools
The Government remains committed to delivering educational transformation through
the Building Schools for the Future (BSF) programme, where PFI is expected to contribute
around one third of the total investment over the course of the CSR period to 2010.
Following the consultation last year on the future delivery of BSF, the Government
has decided to move from the “wave” based model used to date, so that local authorities
who are currently discussing new BSF projects with Partnerships for Schools can
join the programme on a rolling basis, in line with available resources and only
if Partnership for Schools assesses that they are ready.
Over £800 million will be brought forward from 2010-11 into 2009-10 in the priority
schools capital programmes. More than 100 local authorities can now invest in their
priority capital programmes one year earlier; and all head teachers in England are
receiving an advance of their devolved formula capital to invest in smaller projects
as they see fit, from building new classrooms or science laboratories to fitting
out new gyms or improving ICT facilities.
Further and Higher Education
The 2008 Pre-Budget Report brought forward £442 million in total from 2010-11 to 2008-09 and 2009-10
to accelerate the Learning and Skills Council’s (LSC) Building Colleges for the
Future programme, to support Higher Education (HE) building projects and to bring
forward the development of scientific research facilities and improvements to university
research infrastructure. Budget 2009 announces an additional £300 million of capital
funding for investment in Further Education colleges in the CSR period to 2010.
This will enable the Learning and Skills Council to fund a limited number of further
projects through the Building Colleges for the Future programme starting in 2009-10,
based on prioritisation criteria to be agreed with the LSC and the sector.
Of the £442 million brought forward in the 2008 Pre-Budget Report for FE, HE and
science, £200 million will fund the acceleration of HE building projects in 2009-10.
Health
The 2008 Pre-Budget
Report announced that £100 million would be brought forward
from 2010-11 into 2009-10 to advance the upgrading of 600 GP surgeries to training
practices, targeting funding to those areas that historically have had a lower provision
of doctors. The targeted areas have now been identified, with allocations to Primary
Care Trusts (PCTs) from May 2009 and work at GP practices due to commence by early summer 2009.
Housing and regeneration
A total of £645 million of housing and regeneration investment is being brought
forward from 2010-11 into 2009-10. In 2009-10, the housing fiscal stimulus will
include £120 million to bring an estimated 12,000 properties up to the Decent Homes
standard; £180 million to be spent on critical regeneration through the Homes and
Communities Agency and the Regional Development Agencies (RDAs); and £150 million
to fund additional investment in homes for social rent which, combined with £400
million brought forward in the September housing package for 2008-09 and 2009-10,
will deliver 7,500 new social rented homes earlier than planned. A further £50 million
is earmarked for Armed Forces accommodation, meaning that an additional 600 service
men and women and their families should benefit from rebuilt and upgraded accommodation
this year.
Support for PFI projects
The Government says that it remains strongly
supportive of the value that private finance can bring to infrastructure procurement.
In March 2009, the Government announced a public sector infrastructure debt-financing
unit to provide temporary support for Private Finance Initiative (PFI) projects
until funding market conditions improve, ensuring that vital projects in areas such as schools, waste and housing can proceed as planned. Projects in procurement with
a total capital value of around £13 billion will be the immediate beneficiaries.
The unit has recently reached financial close on its first project, lending £120
million alongside the European Investment Bank and commercial lenders to the Greater
Manchester Waste Development Authority's PFI project, ensuring that the £635 million
construction programme can still go ahead.
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For More Information Contact:
Mark Johnson
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email: Mark
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