The UK Treasury has suggested it may alter its self-imposed rule on debt to borrow billions to fund new infrastructure projects, it has emerged. The proposed changes would allow for independent checks and controls on spending for large-scale building work. The measures would mean the government would borrow taxpayer money more efficiently, however, safeguards would also be put in place to mitigate the risk of financial turmoil, such as that which followed the former Prime Minister Liz Truss’s 2022 mini-Budget. This would come in the form of new watchdogs, which would oversee a 10-year strategy for pipelines of major projects in areas such as buildings, roads and railways.
The announcement forms part of a broader effort by the UK government to encourage private investment in UK infrastructure projects. To this end, “expert-led checks and balances” would help evaluate the quality of government borrowing for investment. At present, the government can borrow for investment based on government debt.
The new safeguards highlight the contrast between the proposed changes to those of previous Prime Minister Liz Truss, who borrowed for unfunded policies during her brief premiership in 2022. These safeguards will give the government expert, institutional and independent support to make sure everyone has confidence in the way the government spends taxpayer money. The government has established a National Infrastructure and Service Transformation Authority to oversee the 10-year strategy for pipelines of major projects and a series of Spending Reviews.
The National Audit Office and a new Office for Value for Money will offer ongoing appraisals of “mega projects” such as major train lines. The government said that such administrative measures would help “de-politicise” infrastructure decisions and provide independent checks and balances that are similar to the Office for Budget Responsibility. Accordingly, an expected significant increase in capital spending focused on projects with the most long-term returns for the UK economy would be guaranteed
Read the full article from The BBC here: Read More
