By Mark Smulian | 14 September 2011
Whitehall departments that have hoarded infrastructure capital will be forced to spend it, Deputy Prime Minister Nick Clegg said today.
Forty projects expected to promote economic growth would initially be given priority, with ministers cutting through any bureaucratic blockages that caused delay. The projects include high-speed broadband, improvements to the national grid, the Great Western electrification and Crossrail rail projects and measures to reduce congestion on the M1 and M25 motorways.
Speaking at the London School of Economics this morning, Clegg said: ‘If you modernise this kind of infrastructure you stimulate activity in the shorter term and you build systems that high‑growth industries can use for years to come.’
While it was essential to get project financing right, ‘too often, Whitehall is part of the problem’, he added.
‘We have to break this cycle. The country needs jobs, and time is no longer on our side.
‘So Whitehall will put its foot on the accelerator, making sure we deliver on our commitments.’
Clegg said Chief Secretary to the Treasury Danny Alexander would ‘be tasked with shaking the Whitehall tree so no-one is stockpiling capital that can be put to good use today’.
Alexander had ‘left Cabinet ministers and top civil servants in no doubt of their responsibilities’, the deputy prime minister said.
The infrastructure commitment came in a speech about how the government would use its limited room for economic manoeuvre to promote growth.
Clegg said: ‘Our critics say that all this government is capable of is cuts – that, beyond lowering a few business taxes, reducing a bit of red tape, there is little else we are willing or able to do.
‘That is absolutely wrong. There are levers we can pull to stimulate growth, not least to deliver infrastructure.’
He spoke as data from the Office for National Statistics showed that in the three months to the end of July the unemployment rate was 7.9% and there were 2.51 million unemployed people, an increase of 79,000 on the previous quarter.
Unemployment increased in throughout the UK except for Scotland and the east of England.
Public sector employment fell by 110,000 to 6 million, though the number of private sector jobs rose by 41,000 to 23.1 million.
Commenting on the figures, Tony Dolphin, senior economist at the Institute for Public Policy Research, said: ‘The economic news has been deteriorating for some time and now the last bright spot – employment growth – has disappeared. The chancellor’s gamble that fiscal consolidation and low interest rates would lead to a vibrant recovery led by the private sector is clearly not working. The time has come for a change of course.’
