» Thursday, July 2, 2009

Crossrail/Public Spending

Asked if the Guardian was right to say that there was a question mark over crossrail going ahead, the PMS said that the Government remained committed to crossrail and the position had not changed.

Asked if that meant that there was no basis to the story, the PMS said that we had not yet announced the transport budget beyond 2011 because we had not yet conducted the spending review for that period yet.

Put that Transport was one of the departments that would be giving money to the Department for Business, the PMS said that there was a transfer of money from Transport to Communities and Local Government for social housing, but that was for this spending review period (2009/10 and 2010/11). The story in the Guardian was about what would happen beyond 2011. In any case that particular transfer of money from Transport reflected underspends in the department, which was money that had been freed up because the PFI market was unfrozen and therefore the Government needed to set aside less money to support PFI projects.

Asked when crossrail would start, the PMS said that crossrail remained on course and our position had not changed; the previously announced timetable remained.

Put that projects like crossrail would get sidelined because money was being taken out of certain departments, the PMS said that we were also planning to engage on an ambitious programme of asset sales, which aimed to raise 16 billion that would be additional money available for gross public investment.

Asked if that would be enough money to make up the gap, the PMS said that we had not yet set the spending envelope for the next spending review period.

Put that capital expenditure was currently at 3% of GDP and would go down to 1.25% of GDP, the PMS said the Treasury had set assumptions for the period beyond 2011, which formed the basis for their projections for the period beyond 2011. The Treasury had not yet set the spending envelope for capital expenditure for the period beyond 2011.

Asked how you could make 1.25% of GDP from 3% of GDP by selling 16 billion worth of assets, the PMS said it depended on the timescale over which we sold the assets. We were not setting the spending envelope now. The journalist was trying to present this as a fixed Government spending envelope beyond 2011, but what was clear in the Budget was that these were assumptions that underpinned projections.

Put that other transport plans like electrification and high-speed rail were dead in the water, the PMS said that the remark was not justified because we had not yet set our spending plans beyond 2011. When we did set our spending plans for beyond 2011 it would be on a fully costed basis. You would be able to reach conclusions about which projects would be going ahead at that point.

Asked if there was going to be a cut in the Ministry of Defence s budget, the PMS said that we set out our spending totals for the Ministry of Defence as we had done for all departments, up until 2011. We had not yet set out the spending total for the period beyond 2011.

Asked how the 16 billion of asset sales would cover the gap in the Whitehall budget if local councils kept their money, the PMS said that we had not set spending totals for the period beyond 2011, but simply wished to point out that we had 16 billion of asset sales that was based on a thorough piece of analysis by independent reviewers on the run-up to the Budget. The 16 billion was additional money that was available for public sector gross investment. Local authorities invested capital resources, as did central government, so this potentially made more money available to local authorities and central government. We were not making decisions now about the allocation of resources or the total of resources available beyond 2011.

original source.

Briefing took place at 11:00 | Search for related news

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