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Crumbling concrete hospitals will be rebuilt despite chastening borrowing figures

Crumbling concrete hospitals will be rebuilt despite chastening borrowing figures

Crumbling hospitals affected by reinforced concrete will be spared Rachel Reeves’s cuts to public services, i understands.

The Chancellor announced in July she would place all new hospital building projects launched by the Conservatives under review in an effort to fill the £22bn black hole, including the rebuilding of seven that contained RAAC concrete.

But the Government has now informed those seven NHS trusts that the rebuilding work will now go ahead as planned.

The lightweight concrete extensively used in schools and hospitals is now starting to deteriorate and is in need of replacement.

Other projects to create new hospitals or rebuild sites, under the Tories’ New Hospital Programme, are still under review.

The move is expected to be announced by Health Secretary Wes Streeting at the Labour Party conference in Liverpool, which starts on Saturday, along with other plans for long-term NHS reform.

In her Fixing the Foundations statement in July, Reeves said she had been forced to make savings to public spending in order to meet the £22bn shortfall she said was left by Rishi Sunak’s government.

The plans included her controversial decision to axe the winter fuel payment for 10 million pensioners, as well as cuts to transport projects and the asylum budget.

She said the New Hospital Programme, under which the Tories claimed they were creating or rebuilding 40 hospitals, was unfunded and could also face the axe.

A total of 54 hospitals have been affected by RAAC concrete and seven were earmarked under the programme.

The RAAC – or reinforced autoclaved aerated concrete – was also discovered in dozens of schools as well as theatres, courthouses and other public buildings, last year when walls and ceilings collapsed without warning.

Tax rises and public spending cuts remain on the cards for October’s Budget after a set of dire borrowing figures on Friday.

Official figures showed that the difference between spending and tax revenue reached £13.7bn last month, £3.3bn more than in August 2023.

Public borrowing for the first five months of the financial year meanwhile reached £64.1bn – £6bn more than forecast by the Office for Budget Responsibility (OBR).

The increased borrowing means that national debt rose to 100 per cent of the UK’s annual economic output for the first time since the early 60s.

Treasury insiders said the figures proved that Rachel Reeves’ talk of a “black hole” in the public finances is accurate.

However, i understands that the borrowing figures do not mean that additional cuts and tax rises are now expected above and beyond those which were already under discussion.

But the gloomy figures have dampened speculation that a decision by the Bank of England to slow the selling-off of bonds bought during the quantitative easing process will result in a game-changing windfall for the public purse.

Slowing the pace of sales would reduce the losses made from selling the bonds back to the market after their price has fallen, saving money for the Treasury.

However, i understands that this is not currently being factored into the Government’s decision-making because the OBR is yet to complete its analysis about what this would mean for the public finances.

Darren Jones, Chief Secretary to the Treasury, said: “When we came into office, we inherited an economy that wasn’t working for working people. Today’s data shows the highest August borrowing on record, outside the pandemic.”

He added: “Because of the £22bn black hole in our public finances we have inherited this year alone, we are now taking the tough decisions now to fix the foundations of our economy, so we can rebuild Britain and make every part of the country better off.”

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