Welcome news on capital spending but CSR appears to favour south over north

There were some snippets of good news in the Chancellor’s Spending Review statement yesterday, reports ippr's Tony Dolphin.

There were some snippets of good news in the Chancellor’s Spending Review statement yesterday. One was the announcement that the budget for capital spending in 2014-15 at £47.1 billion will be £1 billion higher than previously planned – though it could have been even higher (£56 billion) if the Chancellor had followed ippr’s alternative deficit reduction plan.

But because capital spending is still being cut by 29 per cent in real terms over the next four years, and transport spending (cut by 11 per cent) and defence spending (cut by 7.5 per cent) have come out relatively well, other areas face swingeing cuts.

In particular, housing and regeneration will take huge hits. This will be disastrous for low income families and it will store up problems for the future. There will be knock on effects too for house prices, making getting on the housing ladder even more difficult.

Furthermore, the spending that is planned appears to favour the south over the north. Investment in major northern infrastructure projects such as the Tyne and Wear Metro, the Manchester rail hub and M62 widening are welcome, but they are dwarfed by the cost of London’s Crossrail. All of the announcements about the science budget appear to favour the south too with no mention of places such as the Daresbury campus in Cheshire.

7 Responses to “Welcome news on capital spending but CSR appears to favour south over north”

  1. Shamik Das

    RT @leftfootfwd: Welcome news on capital spending but #CSR appears to favour south over north: //bit.ly/9UKUXJ

  2. Hannah Horton

    RT @leftfootfwd: Welcome news on capital spending but #CSR appears to favour south over north: //bit.ly/9UKUXJ

  3. John Lees

    There is more public spending in the north so if you cut it (as we have to) the north will hurt most. Not a difficult concept.

  4. Shamik Das

    That’s not the specific point Tony’s making. “… the spending that is planned appears to favour the south over the north.” What little Osborne is investing, he’s doing primarily in the south not the north.

  5. John Lees

    Fair enough but spending in London i.e Crossrail will produce a better return in future taxation than investing elsewhere. Would that it be different (as a northerner) but it is not.

  6. Simon Landau

    Good to see that John Lees agrees that the coalition policies increase spatial inequalities.

  7. John Lees

    Spatial inequalities! Crossrail has been in the pipeline since the 50’s! London has consistently lost out to teh provinces in spending terms for decades. London produces more tax than anywhere else and if it does not get investment all will suffer. I would love for the provinces to reassume their historical roles as the economy’s motor but untill we get them off public spending they have no chance. London is the most successful part of Britain – we need to ensure it remains successful.

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