Supposedly the board are encouraging him to spend. I always felt it was Wenger choosing not to spend. The board do not get rich with money sitting in the clubs accounts. That money cannot be used for anything else. The idea the board are opposed to spending because they 'want to keep the money to themselves' is just false.
Make no doubt about it, Wenger is choosing not to spend. He has a strong desire to 'prove the critics wrong'. Giroud was questioned, Wenger stuck with him to prove them all wrong. Why do think Almunia was backed to the hilt? Wenger simply wanted to prove he had incredible foresight by backing a keeper no one rated.
Almunia, Bendtner, Denilson, Eboue, Senderos, Djourou, and you can throw Giroud and Walcott into that mix, of players who have stayed well beyond the point where it has been realised they just arnt good enough to fulfill requirements.
There are times when it works, such Kosicleny who was regularly criticized and cited as not being good enough, who actually did prove the doubters wrong. But LK took around 2 year to find his feet before making a genuine contribution, and being a player we cant afford to lose. Walcott been here 10 years, Giroud 4 years. Almunia was at the club 8 years (yes

, Denilson 7 years, Eboue 6 years, Senderos 6 years, Djourou 9 years (I know!!). These free loaders have had very long Arsenal careers without doing anything.
Who can forget the infamous quote 'if I sign Xabi Alonso, what do I tell Denilson'. I mean, are ya Fken kidding me? Wenger has this commitment to players than transcends the ability to be impartial. He invests emotion in certain players, and thus cannot admit to himself it wont work out.
If often takes real capitations for him to see the light. Eboue giving away that penalty to thwart a hard fought victory over Liverpool. Almunia so bad, Lehmann had to be re-signed when he was almost 40. Denilson was dropped with Wilshere's emergence, and left on his own accord - Wenger didnt can him. Bendter was goal shy with attitude problems well before patience wore thin - why wasnt this judgment made sooner, we could have saved paying him 52k a week.
Deep down I think Wenger knows we have players no where near good enough, but cannot bring himself to accept the critics were right, and ring the changes.