Wales finds extra £1.3bn for infrastructure

11 Jun 13
‘Innovative’ finance schemes allowed the Welsh Government to spend around £1.3bn more on infrastructure projects in the past year than it originally planned, Finance Minister Jane Hutt has announced.

By Richard Johnstone | 12 June 2013

‘Innovative’ finance schemes allowed the Welsh Government to spend around £1.3bn more on infrastructure projects in the past year than it originally planned, Finance Minister Jane Hutt has announced.

Publishing an update on the May 2012 Wales infrastructure investment plan yesterday, Hutt said the funding increase had enabled the government to provide more affordable homes, health facilities and schools.

The additional funding came from two main sources, and was the result of ‘careful financial management’ by the Welsh Government, she said.

Around £900m has been provided from new finance schemes, including an increase in local government borrowing to enable £200m of additional investment in new schools. And around £300m has been invested to upgrade the A465 road between Brynmawr and Tredegar in south Wales through a non-dividend investment vehicle. This is similar to the Scottish investment model for public-private partnership infrastructure projects, which was developed by the Scottish Futures Trust.

More than £460m of the additional investment has been found from the government’s capital reserves, including some transferred from revenue spending.

Hutt said the extra spending showed the investment plan was ‘delivering real results and continuing to evolve’.

She added that the additional investment had the potential to create around 8,000 jobs during the construction phase of projects, and would boost growth and support provision of more efficient public services.

‘Despite cuts to our capital budgets imposed by the UK government, we have continued to focus on our priorities and since the WIIP was published levered around £1.3bn additional infrastructure investment into schemes across Wales,’ said Hutt.

‘This includes investment financed by switching funds we have saved – through careful management of other areas of spending – into capital and new innovative finance schemes that enabled us to extend our Local Government Borrowing Initiative to the 21st Century Schools programme and complete the dualing of the A465 through a non-dividend investment vehicle.’

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