Richard Threlfall, KPMG’s Head of Infrastructure, Building and Construction comments:
“It was great to see infrastructure investment take centre stage in today’s Spending Review announcement. The Government has been pressed from all sides to take a more long-term approach, and it looks like that message has started to get through. The commitment to HS2, the promise of more road investment and above all investment into nuclear and renewable energy has been long overdue.
“The headline number of £300bn of infrastructure investment up to 2020 will no doubt come under a lot of scrutiny over the next few days. A series of reports over recent years have concluded that the UK needs to spend at least £50bn a year to renew and expand the UK’s overstretched transport, energy, water and flood defence networks. It is no doubt no coincidence that the Government has come up with the same number as its capital spend commitment for 2015/16.
“We all await with interest details of the £100bn of schemes that the Chancellor said would follow. It is inevitable that much of that money will take years to convert to spades in the ground, but a green light to go and buy the spades is at least a good start.
“A critical question is where in the country that investment will be made and therefore where new jobs will be created. The Chancellor today confirmed the loss of a further 144,000 public sector jobs. Most of these losses will be outside of London and the south-east, where the public sector represents a much larger proportion of GDP. If infrastructure investment is going to help replace those jobs, significant investment needs to be in central and northern England and in Wales, the regions which will be most hard-hit by those job losses.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.