Why you shouldn't put too much faith in today's Budget

How exciting! Another financial statement from the Government today, setting out its plans for a future that polls suggest it will have no part in.

Giving the expected pummelling that the Conservatives are likely to take at the ballot box later this year, it should come as no surprise that Chancellor Jeremy Hunt spent time at the dispatch box building intricate traps for whoever succeeds him at Number 11 Downing Street, rather than any real plan to address some of the fundamental challenges to the UK economy.

But surely the construction industry can show a smidgeon of excitement about the extra ￡295 million for capital investment in Scotland, ￡170 million for Wales, new nuclear reactors large and small, ￡20 billion for carbon capture, and a Ministerial taskforce for Euston?

Well maybe....

Or maybe not.

You see what the Chancellor doesn't say is that the Budget should come with one of those warnings that you get garbled quickly at the end of financial adverts on the radio. You know "The value of this investment may go up or down. You may lose all your money"

To prove my point, I went back five years to see what was promised in the Budget then, and what actually materialised (I actually went back six years, as the Government managed to fail to have a Budget in 2019 due to the sudden decision to hold a General Election slap bang in the period when it was due to happen).

So, what were we promised?

• "The government is delivering its commitment to hypothecate English Vehicle Excise Duty to roads spending, announcing that the National Roads Fund will be ￡28.8 billion between 2020-25"

Err, nope. In recent days this has been shown to have been reversed with dedicated roads funds instead dumped into a consolidated fund with a pinky promise that it will be spent on highways, honest...

• "Progress transformative projects like the A66 Trans-Pennine, the Oxford-Cambridge Expressway, and the Lower Thames Crossing"

Let's see...

A66 Trans-Pennine - flagged in RIS2 as "Committed for Road Period 2 (2020-25)", this project was due to start in 2024, but we still await the outcome of the Development Consent Order after the Secretary of State kicked the can down the road last year.

Oxford-Cambridge Expressway - oh dear, "there is not a cost-effective option for the taxpayer", apparently...

Lower Thames Crossing - In 2018 this was due to start in 2021, for completion in 2027. Now, with a fair wind, we may get a DCO decision this year, with completion in the 2030s.

• "A new East West Rail company has been established to accelerate the delivery of the central railway section between Cambridge and Bedford. The government is providing a further ￡20 million to develop a strategic outline business case for the railway."

In 2018 the Cambridge-Bedford section of East West Rail was due to be built by the 'mid-2020s'. Having accelerated delivery, the section will now be delivered in, well, its not actually clear but there is a real hope that the DCO might be submitted this year, meaning that work might start in 2025-6. Today's Budget suggested that services could be up and running by the end of the decade. The NAO, the Government's spending watchdog thought it would be into the 2030s.

• "Northern Powerhouse Rail will transform the economic geography of the North, connecting cities with faster, more frequent services to boost growth and improve the experiences of passengers across the region...The first business case of the scheme is due at the end of the year."

While the Northern Powerhouse Rail Strategic Outline Business was supposedly produced, it appears to have been stored in a 'locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard' somewhere at the DfT.

Needless to say, the UK Government's flagship levelling up project is now expected to deliver its early stages in the late 2020s/early 2030s, while the full scheme may be mid 2030s to 2040s. I guess the North can wait - it's not like it has missed out on another large infrastructure investment in recent months...

• "the government is extending the Transforming Cities Fund by a year to 2022-23, ￡770 million to extend the Transforming Cities Fund"

This sounded like a good wheeze. Budget 2018 bumped up the funds available to boost some of the UK's largest city regions. The total budget available was ￡2.9 billion.

I was curious about what the money went towards. A quick rifle through the Department for Transport's annual accounts, and reports on devolution, from 2019-20 to 22-34 show that there was a consistent underspend on the programme:

￡1,571 million was paid out from the fund, just over half the purported funds. ￡1.3 billion has disappeared, and no-one seems to have noticed.

Not so much Levelling Up, more rounding-down.

And this is not a one-off. One of my previous LinkedIn pieces showed that larges tranches of the much vaunted Levelling Up Fund has been sitting in the DfT/DLUHC/Treasury's deep pockets, rather than going out the door to fund vital infrastructure.

• Crossrail 2 – The government is considering the recommendations of the Independent Affordability Review of Crossrail 2, and will consider the case for the project at the Spending Review.

*puffs out cheeks exasperatedly*

*howls into void*

So, while today the Chancellor said the Government was "sticking to our plan with a Budget for Long Term Growth [with] more investment" the evidence suggests that any plan (or Budget) may not be worth the paper it is written on...

(Picture credit - stavros1 https://creativecommons.org/licenses/by/3.0/deed.en)