At least £8bn of Rishi Sunak’s £30bn coronavirus ‘Plan for Jobs’ recycled from other projects, says IFS
Some of the Chancellor's 'Plan for Jobs' may be funded by underspends on other projects, the IFS warns (PA)
At least £8 billion of Rishi Sunak’s £30 billion coronavirus ‘Plan for Jobs’ will come from existing schemes that were either cancelled, postponed or came in under-budget, the Institute for Fiscal Studies has said.
The economics think tank said at least £8bn-worth of measures unveiled in the Chancellor's flagship announcement last week will come from "reductions in spending on other things".
That chunk of funding will come from "previously planned projects and investments" that "are now deemed less of a priority or infeasible".
And it said all of the £5.5billion spend announced by Boris Johnson in his ‘New Deal for Britain’ earlier this month was drawn from "newly anticipated underspends on other capital projects" rather than an overall boost to spending.
The IFS is now calling for great transparency from ministers on how the economic recovery plan will be funded.
Setting out the think tank’s findings, David Phillips, associate director at IFS, said: “While such reallocations may be perfectly sensible - the COVID-19 crisis may have made some projects less of a priority or even infeasible in the short term - official policy documents should be clear what is happening and where spending is expected to be lower than previously planned.
“Without such transparency, there is unnecessary confusion about the scale of fiscal support being provided to the economy."
He added: “This is a particular issue for the devolved governments in Scotland, Wales and Northern Ireland, who will receive much less in additional funding than they might have expected given that the announcements of additional spending failed to mention the accompanying reductions in expected spending elsewhere.
“Scrutiny by parliament and wider society is also made much more difficult than it should be.”
Meanwhile, director of the IFS Paul Johnson criticised what he called a “remarkable” lack of transparency from the Government.
He said: “This is not a complaint about policy. It is sensible to reallocate money especially at present time.
“It is a complaint about lack of clarity and transparency. It should not take us at the IFS a week to work out what is going on. In part mea culpa, but really more transparency please.”