Money originally earmarked for Whitehall spending is set to be shifted to help fund capital projects following an announcement in the Autumn Statement.
Chancellor George Osborne explained that all but four departments will be asked to conserve spending as part of a major savings drive which will see the money reinvested in both education and transport schemes. Mr Osborne is looking for the country to raise an extra £5 billion as part of the initiative which will then be used for construction developments. Prime minister David Cameron has already given his backing to the announcement and explained that it would kickstart growth and get the UK "working again".
Mr Cameron said: "Government departments aren't actually spending up to their budgets so I think we can say to them 'You've got to cut back some spending, including some unnecessary spending', and let's put that money into things that will make a difference in our country and in our economy - more roads, more school buildings, more infrastructure to make our economy work better, to make our country work better."
The news will come as a welcome boost to companies operating within the construction sector after the recent publication of the UK Markit/CIPS Purchasing Managers' Index (PMI) showed that the industry had dropped back into contraction. Officials behind the report noted that figures had fallen to 49.3, anything under 50 represents contraction, and have blamed the decline on the lack of orders following the completion of major projects.
Mr Osborne outlined the plans at Westminster with Whitehall departments aiming to save one per cent (£950 million) of its day-to-day spending during the 2013/14 time frame and this will then rise once again to two per cent (£2.5 billion) during 2014/15.
Among these plans the Autumn Statement plotted that £1 billion would be invested in the creation of 100 new free schools and academies which would be making 50,000 spaces available for potential pupils. Ministers noted that there would also be scope to fund a number of transport schemes.
Contact us for a security fencing quote