Chancellor of the Exchequer Rachel Reeves is to delay a number of “unfunded” road and hospital projects as part of the Treasury’s anticipated plans to plug an apparent £20bn hole in spending left by the previous government, while committing to an above-inflation public sector pay rise.
The chancellor, says The Guardian, is expected to argue she has inherited capital projects that are “unfunded with unfeasible timelines” as part of her Treasury audit report to the Commons. The audit will be seen as an indication of the government’s early commitments and priorities.
The capital projects at risk include a £1.7bn tunnel under Stonehenge on the A303; the Lower Thames Crossing, a 14-mile road and tunnel east of London that is projected to cost £9bn; and the Conservatives’ new hospital programme, which was a pledge to build or expand 40 NHS hospitals by 2030.
Reeves is also expected to accept the recommendations of public sector pay bodies for above-inflation pay increases – a move economists believe could cost up to £10bn.
Key road projects that have spent years in planning may be at risk as higher inflation has sent cost estimates soaring, according to Labour figures. “Many of these schemes are unfunded,” said one source.
A final decision on the Stonehenge tunnel may not arrive until a ruling on the project by the court of appeal in the early autumn. The Thames crossing’s future is also uncertain after a decision on its future was delayed by six months because of the general election.
