The Chancellor is expected to announce cuts and delays to some projects as Labour tries to plug a £20bn deficit in its finances
Sunday 28 July 2024 19:55 BST
Rachel Reeves will present the results of an audit of the country’s finances on Monday, and set out her plans to begin plugging a £20bn black hole her party has uncovered since coming into government. The chancellor will insist that the true state of Labour’s economic legacy has been “covered up” by her predecessors, requiring tough and unexpected decisions.
Reeves is expected to announce delays to some infrastructure projects, as well as measures to cut spending in other parts of Whitehall. Labour insiders insist infrastructure remains a top priority for the government, but he will face criticism that the UK’s long-term economic growth outcomes depend on such projects.
The Guardian understands that Reeves’ statement to the House of Commons will not mark the end of the government’s cuts review process, but will set out the first projects to be axed or reduced.
A27 Arundel bypass
Before the general election, Labour pledged to fund the repair of an extra million potholes each year in England. It said this would be paid for by delaying the A27 Arundel bypass in West Sussex. It was hoped the project would increase road capacity and reduce congestion, but Labour called it “poor value for money”.
The last government pushed back the project until at least 2025, citing environmental concerns. Advocacy groups including the Sussex Wildlife Trust had opposed its construction, saying it would cause irreversible environmental damage and increase harmful carbon emissions. It now appears the project could be delayed indefinitely.
Project to restore 45 railway lines
In his 2019 Conservative manifesto, Boris Johnson pledged to restore railway lines and stations that had been closed under the infamous Beeching cuts of the mid-1960s. The following year, he committed £500 million to the project, called the Restoring Your Railway programme, which was to reopen 44 railway lines that had been the subject of successful tenders. Only one line has been restored since 2020: the Dartmoor line between Exeter and Okehampton, which reopened in November 2021.
A government update in 2022 said 23 projects were funded and 13 were in development. These projects could now be scaled back. Several other lines, including the Dartmoor line, the Camp Hill line between Birmingham New Street and Kings Norton and the Northumberland line, are under construction and have opened or are due to open this year and next.
Stonehenge Tunnel
The chancellor is expected to abandon plans to spend £1.7bn on a tunnel alongside Stonehenge and eight miles of dual carriageway beyond the monument, on a stretch of the Amesbury to Berwick Down road in Wiltshire.
National Highways had previously said its tunnel project would remove the sight and noise of traffic passing through the 5,000-year-old site and cut journey times.
The road project has sparked much controversy and has been the subject of legal action. Campaigners including Save Stonehenge World Heritage Site are trying to stop it from going ahead, arguing that the tunnel would permanently disfigure a unique and globally significant landscape.
Unesco officials have recommended adding the stone circle and the area around it to the list of world heritage sites in danger, due to concerns that the tunnel would “compromise the integrity” of one of the largest prehistoric sites on Earth.
Conservatives’ 40 new hospital program
Last week, Health Secretary Wes Streeting said it was “painfully clear” that the Conservatives’ flagship £20bn programme for building new hospitals, launched by Johnson, would not be achievable by 2030.
The project was originally supposed to build 40 new hospitals – to replace old buildings, including one dating back to the 1840s – by the end of the decade. But last year the Court of Auditors published a damning report, finding that of the 32 projects announced in 2020, only 11 were classified as “new hospitals” and that the project failed to deliver value for money. Ministers were forced to admit that the project would not be delivered before 2030.
Streeting said: “I want the new hospital programme to be completed, but I am not prepared to offer people false hopes about how quickly they will get the facilities they deserve.”
It is understood that the project will be suspended in Monday’s statement.
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