The treasury gave its largest hint yet on Friday that they will change their own debt rule, in order to borrow more money to fund infrastructure projects
The government will introduce independent checks for major building work to allow it to borrow more efficiently for investment in a predicted change to the debt rule.
HM Treasury chief secretary Darren Jones said this would help avoid a repeat of the disastrous 2022 mini-budget under PM Liz Truss.
The strategy will last for 10 years
A pipeline of construction projects will be overseen by watchdogs for 10 years, including in the building, rail, and road sectors.
The current self-imposed rule for the Treasury is that the total debt that the Government owes must fall in five years.
The Treasury is likely set to loosen this rule considerably in order to allow more efficient borrowing and investment.
Jones said: “We need expert, institutional and some independent guardrails to make sure everybody has confidence in the way that the government is spending taxpayer money.
“What I’m confirming today is we put those in place for capital investment and infrastructure delivery.”
The construction industry would welcome a change to the debt rule
A spokesperson at GB Concrete & Pump said: “The proposed changes to the Treasury debt rules provide a valuable opportunity for the construction industry and could greatly benefit companies. The commitment to increased capital expenditure on infrastructure is encouraging, as is the potential for billions of pounds of investment.
“However, it’s important that we have confidence these projects will be managed effectively and that the funding will be allocated wisely. While there have been challenges in the past with major infrastructure projects, we hope that this new approach reflects a genuine shift towards more successful delivery.
“The ‘New Hospital Programme’ provides lessons that could be learned. Greater engagement with the construction industry and realistic timelines will be key to avoiding delays and resource mismanagement.
“We remain cautiously optimistic about this new direction, but the finer details will be critical. It’s essential that the government works closely with industry to ensure these projects are practical and provide a strong return on investment.
“A robust and transparent process for selecting projects, with meaningful input from industry experts, will be crucial to ensuring that this investment translates into real economic benefits for the country.”
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