Are spending cuts to blame for the schools concrete crisis?

2023-09-04 15:15:50  • 4 mins

By Faisal Islam

Economics editor

When the public finances are in a tight spot, the axe often falls first on capital spending. This is government spending on buildings and facilities, not on, for example, wages and day-to-day services.

The political rationale is that it takes time, often years, to see the material impact of a squeeze on capital sending. It kicks cans down the road. But are capital spending cuts in education during the austerity years to blame for the current schools concrete crisis?

What is clear is that, overall, investment spending of all kinds has been squeezed over the last decade. Under the last Labour government, capital spending as a proportion of the size of the economy, or GDP, rose from 0.3% in 1997 to 3% in 2010. Since then, however, it has fallen back to an average of 2% where it is set to remain.

This issue is being made worse by inflation - the rate at which prices rise - which has soared and remains stubbornly high. The chancellor said on Sunday that "one of his first decisions" while he was trying to shore up the public finances last year was to protect cash spending on capital, in other words maintain it at current levels.

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