A huge programme of public sector housebuilding, focused investment on transport in the north and funding for energy efficient homes should be key planks of the Government’s Autumn Spending Review, influential think tank the Institute for Public Policy Research is recommending to the Chancellor.

In “The Chancellor’s choices” -  IPPR’s submission for how the Government can balance the books up to 2021, the organisation states that transport investment is crucial to improving UK productivity while investment in new homes and upgrading existing stock will act as preventative measures to boost living standards and meet urgent needs, relieving social support budgets.

“While we do not agree with the pace of public spending reductions planned in this parliament, the recommendations we present are consistent with the government’s fiscal mandate.” IPPR

IPPR says Government should, among a raft of measures, focus on:

Housebuilding

From 2018/19, the government should triple the budget of the Homes and Communities Agency, with the aim of grant-funding the building of approximately 50,000 social rent homes per year. Cost: £2.2 billion per year from 2018/19

Transport investment

Within the Department for Transport’s capital budget, resource should be found to finance the ‘One North’ package of integrated investment in road and rail capacity in the north of England, and to put it on course for completion in 2030. Cost: £1.1 billion per year (from 2018/19 at the latest), reallocated within the Department for Transport capital budget

‘Help to Heat’

The government should accelerate investment in energy efficiency measures for low-income households, upgrading a third-of-a-million homes per year with the objective of upgrading all low-income households by 2030. Cost: £1 billion per year from 2018/19

The upcoming spending review will be hugely significant for public services, IPPR says. The government’s target to eliminate the deficit and deliver a surplus in 2019/20, its manifesto commitment to find the majority of savings through spending cuts as opposed to tax increases, and its stated plan to shield the NHS, 5–16 education, defence and international aid from cuts, mean that other departments will have to bear the brunt of reduced spending.

"We would prefer a deficit reduction programme that is more responsive to the wider economy" IPPR

In order to achieve the government’s planned surplus of £10 billion in 2019/20, compared to 2015/16 in these unprotected departments IPPR says:

• overall spending will have to fall in real terms by 16.4 per cent
• capital spending will rise by 18.2 per cent in real terms
• day-to-day spending will have to fall in real terms by 26.5 per cent.

The IPPR report claims to demonstrate how the upcoming spending round could deliver a settlement for government departments that supports public service reform and prioritises spending where it is most needed, even under the government’s tight fiscal rules.

It says: “While we do not agree with the pace of public spending reductions planned in this parliament, and would prefer a deficit reduction programme that is more responsive to the wider economy and operates over a longer time-horizon – and for more of the deficit reduction to be achieved through tax increases – the recommendations we present are consistent with the government’s fiscal mandate.”

IPPR’s plans include new spending on childcare, young people and troubled lives a as well as homes and infrastructure.

To implement them would mean reductions in spending in unprotected areas of 39.8%, something IPPR recognises would be unacceptable. So it’s report includes revenue raising tax proposals to help even the balance.