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At last I can say: ‘I agree with Nick’

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As soon as chief secretary to the Treasury Danny Alexander used the words “the most comprehensive, ambitious and long-lasting capital investment plans”, I knew they were nothing of the sort.

In parliamentary terms, this was ‘dissembling’. You may use stronger language.

It took me back more than 20 years to when a desperate Major government announced “the biggest highways investment programme in history”. Not a village, town or bypass was overlooked. The regional print and trade media burst into editorials of praise and articles featuring delighted beneficiaries. The problem was that the programme was completely unfunded. Not one of the schemes was built on Major’s watch.

On every single measure you can think of, this government’s plans fail the claims made for them.

The immediate picture:

  • In May 2011, having slashed the existing school building programme, the government promised 261 schools would be rebuilt. Today, construction has started on just one.
  • Last September, the government announced a plan to get £20bn of pension fund investment in infrastructure. Today, just £1bn has been committed.
  • A year ago, the government promised that “tens of thousands of households” would have signed up to the Green Deal by now. Today, just
  • four households have signed.
  • Social housing providers have slashed their investment plans for this year by £1bn just to ensure they have provision for increased rent arrears, arising from bedroom tax and housing benefit changes.
  • In 2015, we will actually be spending £10bn less on infrastructure than we spent in 2010.
  • Investment in the government funded construction pipeline is set to fall by almost a quarter (23%) over the four years from 2011-12 to 2014-15.

The bigger picture:

  • As a proportion of gross domestic product, public sector net investment will be falling in real terms until 2017-18 at least.
  • As a proportion of GDP, PSNI will be lower in the decade from 2010 than it was in the previous decade. In fact it will be just 40% of that delivered in the 1970s, which rather puts Mr Alexander’s historic claims into perspective - perhaps the years before he was born don’t count.
  • As a proportion of government expenditure, capital investment is actually falling by 20% in the post-2010 decade compared with the previous decade.

Mr Alexander also promised the “biggest public housing programme for over 20 years”.

Whoa … what? Mr Alexander seems to want to be the successor to serial dissembler, former housing minister Grant Shapps.

You will remember that Mr Shapps claimed the coalition would build more affordable homes in five years than the Labour government had done
in the 13 years between 1997 and 2010.

In fact, Labour had built 556,610 affordable homes rather than the 270,000 Mr Shapps claimed. Mr Shapps has form, demonstrating an undoubted talent for statistical abuse, including on housing starts, homelessness, rents and self-build costs.

In 2010 Mr Shapps said: “Building more homes is the gold standard upon which we shall be judged.”

The government isn’t even going to reach bronze standard, let alone gold. Perhaps that was why Mr Shapps was shuffled off?

Let’s look at Mr Alexander’s new claim. According to the government’s own statistics, the current affordable homes programme will produce an average 23,000 units per year to 2014-15. This compares with an average 58,000 per year for the proceeding period. Even allowing for some highly questionable assumptions, the announcement will only take delivery to 55,000 per year for three years from 2015-16.

And, it looks as though the government is planning to exclude councils from this programme. The betting in Westminster is that the government will exclude councils from receiving any of the £3bn announced for building social housing because any borrowing that they do as part of proposed development will add to the public debt the chancellor is struggling to reduce.

This of course would not be the case if we had the same definition of public borrowing as other EU countries.

This restrictive definition is also apparently the reason the Treasury refused to lift the arbitrary cap on councils’ ability to borrow within their housing revenue accounts which could have provided the funds to build 60,000 new homes at no cost to tax payers nationally or locally.

And, at last, I am able to say “I agree with Nick”. Deputy prime minister Nick Clegg says “the gap between intention, announcement and delivery is quite significant”.

Quite.

Clive Betts (Lab), chair, communities and local government select committee

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