99/98
11 June 1998
INVESTING IN BRITAIN
Public investment will almost double, up to a level of 1.5 per cent of the economy by the end of this Parliament, announced Chancellor Gordon Brown in launching a comprehensive programme to reverse past capital under-investment in public services and infrastructure.
To address the track record of under-investment and ensure that existing and new investment meets the public's best interests the Chancellor today announced a comprehensive programme:
- an Investing in Britain Fund of up to 1.5 per cent of GDP a year by the end of this Parliament;
- to ensure resources are used to best effect, Departmental Investment Strategies will be published together by the Treasury in Spring 1999; and
- a Capital Modernisation Fund to encourage worthwhile, innovative investments on top of the resources allocated in the CSR;
- decisions on investments and existing assets will be taken on the basis of what delivers the public interest. What counts is what works. So there will be a programme of asset sales and additional investments financed by PFI arrangements;
- following publication of the National Asset Register last November, a further £1 billion a year will be made available for reinvestment as a result of central government disposals;
The following public private partnerships are also planned so as to:
- create new investment in safety for the National Air Traffic Services;
- finance higher investment in developing countries for the Commonwealth Development Corporation;
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new commercial opportunities for the Royal Mint and a broader partnership with the private sector for the Tote;
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in addition, the Government plans sales in 1999-2000 of: a further tranche of student loans;
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debt held in British Energy plc.
- Belfast Port;
- licences to operate the new generation of mobile telecoms services;
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the plans include £2 3/4 billion a year of local authority asset receipts.
NOTES TO EDITORS
1. Over the last few decades, there has been a significant fall in the level of public investment to relatively low levels by international and historical standards.
2. Resource Accounting and Budgeting (RAB), which the Government plans to introduce from 2000-2001, will greatly enhance the way in which investment and maintenance decisions are taken an capital is managed in the public sector.
3. Departmental Investment Strategies will set out in detail how the resources allocated to finance public or privately financed investment in the Comprehensive Spending Review (CSR) will be managed so as to deliver the Government's objectives, provide the best value for money and ensure positive social returns. Departments and the Treasury will work together to examine departmental appraisal, management and evaluation systems to ensure high quality investments.
4. The Treasury will allocate resources from the Capital Modernisation Fund competitively, ranked on merit and the quality of the Departmental Investment Strategies. Funds will be available from 2000-01 for capital and PFI projects which improve key services or public infrastructure and offer good value for money.
5. The Government proposals will ensure that air safety regulation is conducted independently from the National Air Traffic Services and is open and transparent. The Regulator's remit will be to enforce the toughest safety standards in the world. The Government also intends to give greater commercial freedom to financially-sound local authority airports (such as Manchester, Newcastle, Leeds-Bradford and Norwich) to help improve investment in transport infrastructure.
6. The Government also announced today that DETR is working up proposals for a housing inspectorate as part of the Comprehensive Spending Review which will be part of a wider strategy to improve local authority housing.
7. Accompanying the Economic and Fiscal Strategy Report there are six Treasury Press Releases 96/98 to 101/98.