Infrastructure spending cuts will curtail logistics’ ability to boost economic growth, says Logistics UK

In a statement issued yesterday, the UK Government said it had inherited £22 billion of unfunded pressures from the previous Government.

As a result, the Chancellor, Rachel Reeves, announced £5.5 billion of savings this year and £8.1 billion next year to tackle the overspend. Reeves also committed to setting out full fiscal plans, alongside a Spending Review, at the Budget on 30th October.

Among the savings announced was “stopping unaffordable road and railway schemes,” which the government claims will save £785 million.

“We have seen from the National Audit Office the chaos that the previous government presided over. Projects over budget and delayed again and again. The spending audit has revealed nearly £800m of unfunded transport projects that have been committed next year. So my RHF [Right Honourable Friend] the Transport Secretary will undertake a thorough review of all these commitments. As part of that work, she has agreed not to move forwards with projects that the previous government refused to publicly cancel, despite knowing full well they were unaffordable. That includes proposed work on the A303 and the A27 and my RHF will also cancel projects in the “Restoring our Railways” programme which have not yet commenced. If we cannot afford it, we cannot do it,” said the Chancellor.

Speaking after the announcement of spending cuts in key infrastructure projects by Chancellor of the Exchequer Rachel Reeves MP, Logistics UK Policy Director Kevin Green said that the lack of focus on infrastructure spending could hamper economic growth:

“For too long, investment in improving the UK’s infrastructure has been overlooked, making it more challenging for goods to be delivered to their customers. Logistics underpins every sector of the economy and, as such, is ideally placed to help the new government get growth moving again. However, to do that, it is imperative that key infrastructure projects like the planned A303 improvements and investment in rail freight capacity are prioritised to keep goods flowing through the supply chain across the country and enable our industry to play its part in getting the economy back on track.”

Green added:

“Our members appreciate that the books have to be balanced but ignoring the opportunities which logistics can create will hamper growth at a time when our sector stands ready to kick-start recovery across the economy.”

The aforementioned A303 improvements concern the plans to build a tunnel near Stonehenge.

Reacting to the news that the A303 project had been binned, Councillor Richard Clewer, Leader of Wiltshire Council, said:

“We are extremely dismayed and disappointed at the Government’s decision to cancel the A303 Stonehenge tunnel project. These improvements are needed now to ease traffic congestion on the A303 and reduce traffic in our communities, and also ensure economic growth in Wiltshire, unlocking jobs and investment in the wider south-west region.”

Clewer added:

“There has already been £160m spent on this project, and cancelling it now wastes that huge investment, including the work to run a power supply up the A360 to the tunnel site. There is currently no viable alternative to the tunnel on the table. It would return the Stonehenge landscape to something like its original setting and allow local communities greater access to the ancient stones and the surrounding World Heritage Site.”

However, John Adams, chair of the campaign group Stonehenge Alliance, praised the decision:

“National Highways’ misguided project was called out for what it was: low value and unaffordable. It was also highly damaging. Now that it has been scrapped, we need to move on. As soon as the budget is there, we need to ensure, as a priority, that local traffic is better managed and rail access to the South West improved,” said Adams.