More industry reaction to the budget

Industry figures have given a decidedly mixed response to the chancellor’s autumn budget and spending review.

Leading industry figures and transport campaigners have given a decidedly mixed response to the chancellor’s autumn budget and spending review.

Here is a second selection of broad industry reaction that poured in today:

Marcus Johns, research fellow at influential think-tank IPPR North, said: “The promise of an infrastructure revolution has been rolled out once again. But rehashed, repackaged, and re-announced pots of funding at each budget are not going to close the UK’s regional divides, which hold back the northern and national economy and fail to deliver economic justice. And the failure to mention Northern Powerhouse Rail and HS2’s Eastern Leg is a shackle on the north’s future, raising again the Treasury’s long-term reluctance to invest in the north and get us on track to a more prosperous future. 

“The absence of the levelling up white paper and Integrated Rail Plan by this budget mean that there is still no strategy, framework, or leadership behind levelling up funding promises and little clarity is available for the north’s mayors and local leaders for their ambitions after the pandemic.”

Brian Berry, chief executive of the Federation of Master Builders, said: “With nothing on retrofit for owner occupiers in last week’s heat and buildings strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes. I do, however, welcome the investment for skills and training confirmed at £3.8bn over this Parliament. I’m also glad to see further investment in housing, and warmly welcome the grant funding for local authorities to free-up small brownfield sites for housing given that land availability is the major obstacle to SME house builders. Relief for businesses by reducing the burden of the business rates system will be well received by some firms.”

Graham Harle, CEO of Gleeds Worldwide, said: “Today’s budget, for us operating in property and construction, felt a little like a hotly anticipated meal where chef had leaked much of his surprise menu in advance but, when it came to it, the showstopper was something of a soggy soufflé. For instance, last week’s news on the government’s heat and buildings strategy gave the chancellor a chance to announce serious funding for a long term national retrofit programme to improve the energy efficiency of the UK’s 30 million buildings but we heard nothing, and news of the much delayed revised integrated rail plan was also absent. When achieving carbon zero is seen as a bigger issue by most people than Covid, the lack of investment in this area was a missed opportunity.”

Mark Richards, BCLP partner and regional practice group leader – energy, environment and infrastructure, said: “On the face of it, the chancellor’s budget announcement looks quite light for the infrastructure sector, but taking a step back there are some very real opportunities for infrastructure asset owners and operators, especially around green investment relief on business rates, some of R&D tax relief reforms. World class infrastructure, skills and innovation were clearly big themes as part of the chancellor’s budget. For the wider infrastructure sector, there was a clear linkage between infrastructure investment and levelling up. Construction contractors’ order books ought to benefit from road, rail and broadband spending over the next few years.”

Paul Tuohy, chief executive of the Campaign for Better Transport, said: "In the looming shadow of the climate emergency and with COP26 just days away, the decision to cut Air Passenger Duty on domestic flights is utterly wrong-headed. Ours is not a large country, many of these journeys can be made in just a few hours by train with just one-seventh the carbon impact.. We welcome the increased funding for local transport in city regions, but the commitment to spend billions on road building and continue to freeze fuel duty will come as cold comfort to the many households with no car who continue to be pummelled by rising rail and bus fares. How can our leaders hold their heads high at COP26 with this tone-deaf budget still ringing in delegates' ears?"

Nick Bowes, chief executive at Centre for London said: “The chancellor committed to “London-style transport” settlements in the rest of the country, but ‘London-style’ risks becoming code for slashed services and cancelled investment unless Transport for London gets the sustainable funding deal it needs. A world-class public transport system is critical to London’s competitiveness. And any deterioration of TfL’s services would undermine the competitiveness of the city and harm the contribution London makes to the nation's coffers.” 

Brendan Sharkey, partner at MHA, said: “The money earmarked for roads, railways, schools and hospitals is what the construction industry hoped for. It is especially encouraging that the levelling up programme spreads the benefit around the UK. The extension of the annual investment allowance (AIA) relief of 100% on capital expenditure of £1m will also be a big boost to construction firms. However, most of this – aside from the AIA extension - serves to boost demand but does nothing about supply, which remains a major issue. The chancellor can’t do much about the cost of materials but he can do something about labour. He recognised the value of people with certain skills coming to the UK but it is unclear (and unlikely) the new visa system will do much for the construction sector.”

Nicola Gooch, planning partner at Irwin Mitchell, said: "Perhaps the most significant 'new' announcement was the £4.8bn uplift in general local authority funding over the next three years – described as "the largest increase in core funding for over a decade". Many of the problems in the planning system at present are a direct result of under-resourced local authorities struggling to cope with the volume of applications they face. As such, this additional funding is likely to be extremely welcome. 

“That said, planning is not the only local authority department struggling for cash. Councils are also responsible for funding social care, education and a wide range of other local services. As such, whether any of this money makes its way to local authority planning departments will have to be seen. The £65m of investment into the digital transformation of the planning system is also a welcome recognition that the current software relied on by council planning departments may no longer be fit for purpose.”

Bob Hide, co-founder and managing director of specialist risk management consultancy, Equib, said: “The chancellor’s significant investment in bolstering regional transport infrastructure underlines the government’s commitment to its ‘levelling-up’ agenda. However, in order to optimise outcomes for these ambitious projects and ensure that taxpayers’ money is put to best use, it’s vital that effective risk management from the early stages of initiatives remains at the top of the agenda.”

Commenting on the new funding for EV public charge points, Adam Eskdale, senior associate in the digital economy team at Ashurst, said: "The additional funding for EV charging infrastructure is to be welcomed, given the UK's drive toward net zero and low carbon transport. There are fundamental issues with the UK's national EV infrastructure which will need to be tackled if the case for widespread EV adoption is to be made more convincing. It is not immediately clear whether the announced funding will, when deployed alongside private investment, be enough to facilitate the balanced and coherent approach to the national roll-out of EV infrastructure that is required. It is also unclear whether it will be enough to ensure the installation of a sufficient number of charge points overall.

A statement from Engineering UK said the spending review missed a chance to boost careers provision in schools: “The government’s investment in education and skills is a step in the right direction. However, some of the funding announced to skills in particular is money that has already been committed. In order to ensure that the UK has the number and quality of engineers to deliver on its ambitions to build back better and greener, government must be ambitious and strategic in its approach to education and skills and ensure that more investment is forthcoming for what we consider to be a vital part of education - careers provision.

Chris Richards, ICE's director of policy, said: "The Integrated Rail Plan is now almost a year late. This uncertainty has caused untold damage to the communities living along the Eastern leg of HS2 whilst also meaning we still lack plans to deliver the connectivity the government promised between cities and regions across the north of England. The uplift in city regional funding is good to see but to make a real difference, it needs to be sustained rather than one-off funding as recommended by the National Infrastructure Commission. And we know that there will be a delay in designing how to make this uplift work for the public as cities wait for the outcome of the IRP."

Joe Hart, infrastructure partner at Pinsent Masons, said: “Major rail projects that form the backbone of the government’s levelling up agenda including HS2, Northern Powerhouse Rail and East West Rail are at risk of being significantly delayed, over budget or even drastically scaled back as exemplified by rumours on the removal of the eastern leg of HS2 Phase 2. The cost of steel is now 75% higher than it was 12 months ago and with Network Rail purchasing 97% of the steel produced by British Steel, these transport projects that have been designed to close the gap on regional disparities across the UK, are going to become increasingly challenging.”

Peter Hawthorne, chief executive of LCR, the government’s regeneration and placemaking expert, said: “When ironing out the practicalities of the £1.8bn brownfield fund, the opportunities available on transport-linked land should not be overlooked. There is space for tens of thousands of homes on brownfield sites surrounding the UK’s railway network. The £7bn in funding for regional transport transformation also announced by the chancellor should help on this front, freeing up more of the brownfield land surrounding transport hubs for development to create homes, regenerate communities and drive levelling up. The £65m to help digitise the planning system could make it easier for planners and local authorities to identify and bring forward the opportunities that the brownfield fund is committed to supporting.” 

Jo Cowen, CEO at Jo Cowen Architects said: “While we welcome investment into planning and regeneration, there is still a way to go when it comes to ensuring that every home that is built today is fit for tomorrow. Without investing in sustainability, new housing will continue to be made using the same inefficient, wasteful techniques that are in desperate need of change. If we’re serious about decarbonisation, we have to prioritise funding for greener materials, cleaner construction methods, and sustainable building features that genuinely target a net zero model.”

Jonathan Hale, head of government affairs at RICS, said: “Chancellor Sunak didn’t mention the need to retrofit, rather than demolish, existing buildings – a key to unlocking net zero carbon emissions for construction in Britain – but the £3.9bn pledged to decarbonise homes and offices, which included support for low income homeowners to transition their heating, is a good start. The £5bn for cladding replacement – which we already knew was coming since February – will give more leaseholders greater peace of mind that their homes will be made safe but it’s still well short of the £15bn needed that is estimated to fix every building, but the additional funding to deliver 180,000 much needed affordable homes is welcome.”

Julian Broster, founding director of Civic Engineers, says: "As we look at further opportunities in active travel and improving public transport, it's heartening to see a demonstrable commitment from the government to improving key transport infrastructure across the north. As we had anticipated there were some policy announcements designed to showcase the UK's green credentials, and we were given confidence by increases in spending on research and development and particularly the £1.7bn earmarked for net zero R&D. It's a step in the right direction as we move towards a greener economy.”

Eddie Tuttle, director of policy, public affairs and research at the Chartered Institute of Building, said: “The Institute is disappointed to see the autumn budget gave no further clarity on how government intends to meet its manifesto spending commitments to drive to UK towards net zero. Both the heat and buildings strategy and autumn budget should have included a greater focus on the need for a clear long-term national retrofit strategy to address the carbon output of homes whilst also tackling the key issue of quality. CIOB would like to see the government allocate the remaining £5.3bn towards the Construction Leadership Council’s national retrofit strategy which has been backed by CIOB and many other bodies within the built environment.”

Ending the comments on a positive note, Stephen Beechey, group public sector director at Wates Group, said: “We welcome the chancellor’s budget and, as a business with a significant national footprint, we are particularly buoyed by the government’s continued focus on levelling up, including a 20% increase in funding for new affordable homes and the 100 local infrastructure projects that will benefit from the levelling up fund. The construction industry stands ready to start creating the thousands of new homes the country needs, updating and building hundreds of modern schools and colleges, and the infrastructure required to address some of the longstanding inequalities between north and south.”

Click here for more budget reaction.

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