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.

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