CBI: protect transport during spending review or stifle growth
September 20th 2010 The CBI has called on the Government to make transport spending a priority and protect spending which promotes economic growth in its forthcoming Spending Review.
It made the call as it published its submission to the Treasury ahead of the Spending Review next month.
The Government previously announced in the Budget that it will make £32bn of annual spending reductions by 2014/15.
The CBI said three areas of investment must be prioritised: infrastructure investment as well as knowledge assets and human capital.
The importance of investing in transport infrastructure in particular was emphasised, as it offered high returns and will play a crucial role in boosting domestic and international trade, the CBI said.
Regarding infrastructure investment, the CBI is calling for:
- Public sector capital investment to be returned to 2.25% of GDP as soon as possible.
- Existing transport assets to be maintained.
- Work on Crossrail and upgrades to the London Underground network to continue.
- Savings on existing transport spending, including reducing the concessionary fares budget and the number of Highways Agency contracts.
- All public sector transport projects to undergo more rigorous value for money assessments.
- Action to attract more private sector funding for transport. For example, by increasing the contribution of direct user payments and tax increment funding.
CBI chief economic adviser, Ian McCafferty said: “Given the very high returns that new infrastructure offers, the planned cuts to net public sector investment are a concern. Public sector capital investment should be returned to 2.25% of GDP as soon as possible.
“We also need to invest in building up our knowledge and skills base as this will help boost our competitiveness.”
The CBI said this should be funded by making deeper cuts to the welfare bill and making the public sector more efficient. More articles from Handling & Storage Solutions: | 
