Industry gives mixed response to autumn budget

Budget leaves big questions unanswered and takes ‘tokenistic’ approach to net zero, say leading industry figures.

Senior industry leaders have given a mixed response to today’s autumn budget and spending review, which largely outlined a raft of announcements already made during the previous six months.

As such, some industry figures have described chancellor Rishi Sunak’s speech as leaving big questions unanswered, with no mention of major projects including HS2 and Northern Powerhouse Rail, and some have even accused him of taking a ‘tokenistic’ approach to net zero and the upcoming COP26 summit.

Here is just an initial selection of industry reaction to the spending review that poured in today:

Matthew Farrow, director of policy at the Association for Consultancy and Engineering, said: “Today’s budget saw limited new announcements on infrastructure, which much of the welcome funding for city transport schemes and the levelling-up fund grants being money that had previously been announced. No doubt the chancellor had other things on his mind with the cost-of-living crisis and NHS spending pressures.

“One thing that didn’t seem to be much on his mind was CoP26.  Although there were some useful small-scale measures such as business rates relief for green property improvements, there was also some distinctly mixed messaging with the Air Passenger Duty cut and fuel duty measure. The chancellor missed a trick here - a long-term funding commitment for the rail electrification that will be needed to hit rail decarbonisation targets would have shown commitment to the hard yards of delivering net zero.

“For the consultancy sector specifically, the extended scope for R&D tax credits may be useful as the industry continues its digital transformation, and the continued commitment to Project Speed was good to see – modern digitally enabled consultancy holds the key to unlocking infrastructure delivery and performance.”

Sir John Armitt, chair of the National Infrastructure Commission, said: “With reasonable capital settlements for key areas including local transport outside London, and an increase in the guidelines for projected infrastructure spending for the long term, these announcements indicate a government keen to support a more stable national infrastructure planning cycle. In the current fiscal context, today’s red box contains a solid down payment on a long term fiscal commitment to infrastructure.”

On local transport funding for cities and towns, Sir John said: “Confirmation of plans to devolve more funding to city regions for major upgrades of their transport systems is of course welcome. Addressing congestion and improving connectivity across cities is key to boosting productivity but also improving quality of life for residents. But this funding should only represent a first step and mayors need to know they can rely on future five year settlements to enable long term planning.”

On the delayed Integrated Rail Plan, Sir John said: “Ongoing uncertainty hanging over major rail schemes in the north and midlands is not in anyone’s best interest, not least because of the timescales involved in taking such large projects from aspiration to delivery. We gave our own independent assessment of options to government ten months ago. The government’s plan should be published without further delay to help unlock economic growth across the north and break the cycle of committing to schemes only to later reopen or rescope them.”

Richard Robinson, CEO Atkins UK and Europe, said: “There were certainly a number positives to take from the chancellor’s speech, including the initial allocation of levelling up funds and a commitment to build affordable homes on brownfield land. That said, I had hoped to learn more about the Integrated Rail Plan which will not only give our industry clarity on how a number of major projects will be delivered, but also provide towns and communities with greater confidence knowing that infrastructure is going to be put into place which will help unlock regional growth. As such, we urge the government to publish a comprehensive Integrated Rail Plan as soon as possible, recognising its importance as a catalyst for transformative change.”

Donald Morrison, Jacobs people & places solutions senior vice-president Europe and digital strategies, said: "Today's spending commitment to improve regional transport networks and roads is a significant opportunity to create new sustainable infrastructure. Globally, cities account for 60% of global carbon emissions and 78% of energy use, but the UK can now set an example of the alternative. If we use data to plan how this funding is used, we will design transport systems that encourage individuals to take public transport, use electric vehicles, walk and cycle more. Being ambitious in how we use this funding, we can create healthier places to live as well as contributing to the global reduction in emissions."

Peter Hogg, UK cities director at Arcadis, said: “The chancellor has today given us a ‘feel-good’ budget for hard times. Increases in local government spending, as well as supporting regional aviation with reforms to airport passenger duty, and TfL transport-style settlements across the regions are all welcome, but some of the big questions remain unanswered. Allocations for youth clubs, football pitches and pocket parks are all very well, but any mention of HS2 or a national railway strategy, for example, were conspicuous by their absence. Still, with the majority of investments having already been announced, there were no major shocks for our sector. Rather it will be about maintaining a path that was set some time ago in the last spending review. As such, it is encouraging to see things moving in the right direction. This was very much a political rather than technical budget, but still one that marks a clear signal of intent when it comes to driving a UK-wide growth agenda.”

David Whysall, Turner & Townsend UK managing director, infrastructure, said: “This autumn budget was more an exercise in announcing where local transport money would be spent because much of this funding has been previously announced, with £1.5bn representing new money for rail, tram and bus projects outside of London. The levelling up agenda undoubtedly requires local intracity schemes, but they should not be delivered in isolation. A high performing, resilient multi-hub economy needs more joined up government and cross-industry spatial planning to align highways, rail, energy and residential development. National and regional strategies must align social and economic infrastructure planning if we are to truly improve prospects for the poorest communities.”

Colin Wood, chief executive, Europe and India, AECOM, said: “With numerous policies already unveiled, today’s budget offered few surprises for industry. A disappointing omission from the chancellor’s speech was any long-term spending decisions around the delivery of larger projects. Long-term projects such as the eastern leg of HS2 and Northern Powerhouse rail are key to boosting the country’s post-Covid economy. We hope the much-anticipated Integrated Rail Plan will include a commitment to deliver HS2 in full and provide further clarity around rail plans for the north and midlands.

“The chancellor was clear that he sees investment in infrastructure, innovation and skills as our route to economic recovery. The infrastructure sector is ready to deliver this ambition, but what we need now is more certainty around when and how major infrastructure will be phased and delivered.”

Darren Caplan, chief executive of the Railway Industry Association, said: "Whilst it is positive to see confirmation of what looks like an additional £1.5bn of funding for regional transport projects, including in rail, this budget appears to be a missed opportunity to unleash the potential of the railways in helping the country to build back better.

"There was no indication in the statement of whether long-term day-to-day funding of the railway network will be maintained at least at current levels in the years ahead. We still don’t know what is in the Integrated Rail Plan for the midlands & the north, we still have uncertainty over major projects, such as HS2 eastern leg, Northern Powerhouse Rail and Midlands Rail Hub, and we still await an update of the Rail Network Enhancements Pipeline, now more than two years since it was last published.

“With COP26 just around the corner, too, this would have been a good time to set out the government’s plans to reach a net zero railway, including a rolling programme of electrification and fleet orders of hydrogen and battery trains. These plans would have not just shown UK leadership in decarbonisation on a global stage, but would also significantly boost green jobs and investment, as the UK moves to a cleaner, post-Covid economy.” 

Construction Innovation Hub programme director Keith Waller said: “Now we know what the government’s priorities are, it is now important we focus on how these are delivered. The Hub will continue to support government in these aims to deliver true value and tackle the challenges of tomorrow, today. Improved OBR forecasts for growth and levels of unemployment have given the chancellor more headroom to invest and innovate. As such, it is disappointing to see the date the government will meet its own target for R&D spending slip by two years. However, with the announcements for increased departmental spending, we look forward to the detailed plans emerging demonstrating how this investment will continue to drive the sector’s transformation to a more sustainable, innovative and productive future in line with the ambition of Build Back Better.” 

MarieClaude Hemming, director of external affairs for the Civil Engineering Contractors Association, said: “Industry will welcome today’s budget and spending review as an indication that the UK government is backing our sector to level-up the economy and deliver strong economic growth. One of CECA’s asks ahead of today was that the government maintain its commitment to spending on infrastructure and the chancellor has delivered on that. In particular, we welcome new funding for transport, new nuclear power, and a range of other investments in both projects and skills.”

Mark Robinson, group chief executive at public sector procurement specialists SCAPE, said: “The next five years represent a critical opportunity to invest in the long-term future of regional communities. Be that via the integrated metro and bus services already earmarked by the Treasury or by accelerating the active travel agenda through walking and cycling routes that contribute to carbon-friendly towns and cities, and healthier communities. At a time when local authorities continue to deal with a range of post-Covid pressures, an emphasis will need to be placed on high quality procurement and placemaking to ensure local government can maximise the impact of this latest and substantial capital investment.”

Sean Keyes, managing director of Sutcliffe, and north west chair of the Association for Consultancy and Engineering, said: “The £1.8bn pledged towards brownfield housing developments is closest to our hearts as engineers and will make a real impact in making the UK more sustainable, as it’ll not only stop us from using greenfield sites, but also help us clean up brownfield land. The digitisation of the planning system is also something I’ve personally spoken to a lot of local planners about in the past and the general consensus is that most people are struggling to meet planning times at the moment, which means projects then start at a slower timescale, which then halts the economy. Investment in speeding up the planning system is well received across the construction and property sector and something that has been a long time coming.”

Julie Hirigoyen, chief executive of the UK Green Building Council, said: “With the COP 26 conference just days away, the chancellor’s announcements felt like they were from a different planet and a different time. This was evidently the chancellor’s big opportunity to plug the major gaps in the government’s net zero and heat and buildings strategies, and put the UK on a firm path to net zero over the next few years. Instead, attention to net zero was tokenistic, repeating old announcements alongside incongruous headlines around carbon-intensive investment in roads, cutting air passenger duty and fuel-duty freezes.

“If the chancellor is serious about building a strong, resilient economy, then turbocharging the green economy should be at the centre of all investment plans and skills initiatives, not merely be an afterthought. With the UK’s green credentials in the spotlight next week, and public concern about climate change at an all-time high, these announcements could not be more disappointing.”

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