Senior minister have committed to multibillion-pound spending pledges at the Conservative party conference as the government gears up to fight a general election, but public sector officials and industry have questioned how much amounts to new money.
Chancellor Sajid Javid will set out plans for new infrastructure spending on Monday, including a £5bn boost to support the rollout of high-speed broadband networks to rural areas.
The commitment was welcomed by telecoms executives but they pointed out that the decision to double the target that the subsidy would cover — from 10 per cent to 20 per cent of the hardest to reach households — raised concerns over whether the funding would be enough.
The telecoms industry, led by BT, has been pushing the government to commit to a large subsidy since Boris Johnson made a pledge to connect the entire country to ‘full fibre’ networks as part of his push to become the new leader of the Tory party.
The industry had previously pushed for a subsidy of between £3bn and £7bn to link up with new telecoms lines the 10 per cent of the country that is hardest to reach, according to a person with direct knowledge of the talks.
The previous government had indicated between £3bn and £5bn would be needed to connect the final 10 per cent and that it would support the industry in those regions. The new funds represent a firmer commitment but widen the area that the funds would cover.
Mr Javid will also use his speech on Monday to announce the first projects to benefit from a five-year £25bn fund for upgrading and maintaining the UK’s road network. But the funding for Highways England, which is responsible for 4,300 miles of motorways and A-roads, was announced by Theresa May’s government last year.
Matt Hancock, the health secretary, announced on Sunday that he would launch “the largest hospital-building plan in a generation”, promising to channel £13bn into 40 “new state-of-the-art hospitals” across the country.
The small print of the announcement, however, showed the extent of the government’s commitment to be far more uncertain. Just six projects have received the go-ahead for the first phase of building, in 2020-2025, with £2.7bn earmarked to fund them.
So far, only £100m, described as “seed funding”, has been committed for the larger, second phase, with a further £200m earmarked to replace MRIs and screening equipment.
The Conservative party described the £2.7bn as “brand new money from the Treasury”. But Chris Hopson, chief executive of NHS Providers, which represents English hospitals, noted that, while the funding was very welcome, the NHS at present had no set capital budget beyond 2020/21. “So we’ll need to take it on trust . . . that this extra £3bn for 2020-25 really is in addition to what would otherwise have been allocated,” he said.
Richard Murray, chief executive of The King’s Fund, said it was “difficult to tell how generous the government is being, given a lack of clarity over how the schemes had been selected, and how the pledges fitted within the department’s overall financial settlement.”
