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Government Capital Expenditure

Part of Opposition Day — [3rd Allotted Day] – in the House of Commons at 4:20 pm on 2nd February 2009.

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Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury) 4:20 pm, 2nd February 2009

I do not know the answer. The Financial Secretary is here and I am happy to take an intervention from him, but I am sure that he will give a proper explanation in his speech. Having talked to my local learning and skills council, I have a sense of Treasury involvement, but I do not know whether it is exclusively responsible.

In addition to the problems that affect colleges, other bits of the advanced investment programme are running into difficulties. I was recently shown a summary of a meeting of council leaders in the south-west. It reported repeated appeals to the Department for Transport to say whether the advanced projects that the Government had flagged up would happen and simply never getting an answer. The projects are not moving ahead. If that is happening in the south-west, I am sure that it is happening everywhere else.

There are particular problems with social housing. In the past year, my colleagues and I have asked the Government about the obvious things they can do in the face of the collapsing housing market, such as investing in social housing, both in new build and in acquiring unsold properties. The Government have responded in a general sense, but only very little is happening.

The Government had approval, within the envelope of the spending review, to spend £1 billion on social housing. As far as we can establish, only a tiny fraction of that has been committed. One of the reasons is that public housing projects—social housing—whether undertaken by councils or by housing associations, depend on agreements with developers and section 106 money. Private development has largely ground to a halt and section 106 money is not available, so public sector housing is not proceeding either. We also know that many social landlords have collaborated with developers, and many of them overcommitted themselves with bank borrowing. There is about £50 billion of borrowing by social landlords—certainly by the registered social landlords. Many of them are now paralysed and unable to proceed with developments.

The ambitious targets for social housing are not being met at a time of growing housing need. Moreover, in the middle of a recession, one of the things that the Government concretely can do, and which we all agree is an imperative, is simply not happening. I would be interested to hear exactly what is happening on that front. We have repeatedly asked the Government. As far as we can establish, virtually no money is coming out of the appropriate Department to develop social housing when it is most needed.

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