Damp squib Budget offers slim pickings for infrastructure

Before today’s Budget, we were warned to expect no thrills from the chancellor Phillip Hammond. How right those warnings were. Many observers are deriding the chancellor’s last ever spring announcement at the dispatch box as “a damp squib” and it’s hard to argue with that assessment. 

The Budget reflects the harsh reality of the political and economic tightrope post-Brexit that Britain is about to walk for the next two years at least and as a result there was very little new on offer from the chancellor.

Certainly, from an infrastructure and construction perspective, Hammond offered slim pickings. On transport, he offered little. While the £90m for the North and the £23m for the Midlands from a £220m fund that addresses pinch-points on the national road network will be welcome they are hardly amounts that are going to rove transformative. 

There was better news with the Treasury’s announcement of a £690m competition for local authorities across England to tackle urban congestion but it remains to be seen how this will be applied to the areas of greatest need.

As expected, the chancellor used the Budget to dish out some of the £23bn of investment he announced in the Autumn Statement. Funding designed to help the UK compete in science and innovation included £300m for research talent, including 1,000 PhD places for STEM subjects, £270m for robots, driverless cars and biotech, £16m for a 5G mobile technology hub and £200m for projects to get private sector investment in full-fibre broadband networks. All welcome but not new money.

On devolution, Hammond announced that he had agreed with the mayor of London to devolve more power to the capital. A Midlands Engine strategy will be published tomorrow and there will also be extra funding for the Scottish, Welsh and Northern Irish governments. The government says it is working towards city deals for Edinburgh and Swansea and has also opened negotiations for a city deal for Stirling and is about to consider proposals for a Tay Cities Deal and a North Wales growth deal.

The agreement with the London mayor includes joint working to explore the benefits of, and scope for, locally-delivered criminal justice services; action to tackle congestion; and a taskforce to explore piloting a new approach to funding infrastructure. 

The agreement also commits to explore options for devolving greater powers and flexibilities over the administration of business rates and greater local influence over careers services and employment support services, as well as working with the Greater London Authority and London councils to ensure that employers can take advantage of the opportunities offered by the apprenticeship levy. The government is also in discussions with Greater Manchester on future transport funding.

Of undoubted interest to the construction sector was Hammond’s announcement of the introduction of T-Levels to establish parity of esteem between academic and technical education. These will replace 13,000 qualifications with just 15. The new qualifications will include including a high-quality three-month work placement for every student.

Commenting on the T-Levels announcement, Marcus Fagent, head of education at Arcadis, said: “The Budget announcement of an additional £500m a year to fund the new ‘T levels’ represents an essential investment in developing technical skills in the UK. The aim is to grow the number of teaching hours received by the 600,000 post-16 students currently on technical courses by 50%. However, this will require significant capital investment on top of the additional £500m revenue investment.  

“Having had access to very limited capital funding over the last four years, FE colleges have been through a phase of rationalising their estates, amalgamating and reducing any unused space to maximise their operational efficiency. They now have limited spare space in which to expand and neither do schools.  By comparison, in the Netherlands, where there is a better technical training provision, every secondary school is built with an additional 650m2 of non-academic training space; an investment of more than £1.5m per school. 

“We estimate that the government may need to inject £500m of capital investment every year to match the planned revenue investment to make T-Levels deliverable,” said Fagent.

Adrian Hames, UK head of infrastructure planning at WSP | Parsons Brinckerhoff, said: “With uncertainty over Brexit we were never expecting a spending splurge but we did get some quick wins in technology and local transport improvements. Whilst the introduction of T-levels is very much welcome for building upcoming major infrastructure projects with more young and skilled workers, these changes will take years to have an impact. The industry wants to get spades in the ground now.”

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