HISTORIC PRESS RELEASE : Schools and Hospitals to Benefit from Extra Capital Cash [April 1999]

The press release issued by HM Treasury on 13 April 1999.

Investment in modernising Britain’s infrastructure is set to double over the next three years, the Government announced today.

Launching a summary of new Departmental Investment Strategies, Chief Secretary Alan Milburn highlighted capital funding for schools, hospitals, transport and housing as key priorities.

He commented:

“When this Government was elected we inherited a legacy of under investment in the nation’s infrastructure. Hospitals, schools, transport and housing had all been neglected.

“We are reversing that decline in a way that is consistent with our prudent approach to public spending.

“There is now an emphasis on long term capital investment as part of the Government’s modernisation programme for our key public services.

“We are investing for the future.”

Public sector net capital investment will double between 1999 and 2002, with an extra £12.5 billion being made available. On top of that, public private partnerships, including the Private Finance Initiative, will lever in a further £11 billion.

Each Government Department has drawn up a Departmental Investment Strategy (DIS) to set out how extra capital investment will be spent, assets managed and use of public private partnerships encouraged. Each DIS explains how capital investment will contribute towards tangible improvements in public services.

Today’s summary document highlights some of the key investment areas, including;

• £1.5 billion to modernise schools including £700 million on IT investment. This is on top of the £1.3 billion of windfall tax revenues allocated to the New Deal for Schools from which 7,500 schools have benefited
• an extra £1.0 billion for the NHS on top of the biggest ever new hospital building programme. Since May 1997, 31 major hospital projects have been given the go ahead. 8 of these will be in service by 2001
• an additional £1.7 billion to underpin a new integrated transport strategy
• over 1.5 million council houses to benefit from the extra £3.6 billion made available to start tackling a backlog of investment.

The Government’s new emphasis on long term capital investment will see public sector net investment rising from 0.4% of GDP to 1% of GDP by 2002.

This increased investment in Britain’s infrastructure will also help tackle the productivity gap that has opened up between this country and our competitors.