The emergency Budget has given the nod to four local rail projects while a large regional growth fund would be set up as the coalition tries to build its way out of the national deficit.
Chancellor George Osborne said his ‘unavoidable budget’ would see non-protected departments, such as the Department for Transport, facing cuts of up to 25% over four years, but there would be no further reductions in capital spending.The Government backed four regional rail projects: the Tyne and Wear Metro, the extension of the Metrolink tram system in Manchester, Birmingham New Street, and links between Sheffield and Liverpool.
Mr Osborne said ‘well-judged capital spending’ could provide the new infrastructure the economy needed to compete in the modern world.
‘I think an error was made in the early 1990s when the then Government cut capital spending too much – perhaps because it is easier to stop new things being built than to cut the budgets of existing programmes.
‘We have faced many tough choices about the areas in which we should make additional savings, but I have decided that capital spending should not be one of them.
‘The absolute priority will be projects with a significant economic return to the country.’
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