A BUDGET THAT PLAYS TO THE REGIONS... NOT LONDON
Peter Hogg, UK Cities Director, said:
“The Chancellor was keen to share the love around the UK in today’s budget. Whilst he may have come to bury one of his predecessor’s pet policy initiatives – austerity, he went out of his way to praise the other – devolution. No part of the Union was denied Mr Hammond’s generosity, with devo deals for Tayside, Belfast and Mid Wales, whilst Northern Powerhouse Rail, the Oxford-Cambridge rail link and the devolved authorities all got additional funding or extended funding windows. This, linked to pledges on the Transforming Cities Fund, Future Mobility Zones, infrastructure, health, schools and defence, adds up to a very regionally focused budget.
“This is good news for the UK’s overall competitiveness at a critical time and will helpfully encourage confidence and investability. It is also reassuring to see the Chancellor recognise the need to enable growth in our cities and the corridors that connect them. It is disappointing – if understandable – to see limited funding for London. The HIF funding (Housing Infrastructure Fund) of the DLR extension and inclusion of Lower Thames Crossing in the Roads Investment Strategy 2 settlement are welcome, but it feels like a missed opportunity to see nothing on Crossrail 2, The Bakerloo Line Extension or indeed the regeneration of Thames Gateway.”
ON THE END OF PFI & LACK OF PROGRESS ON CONSTRUCTION SECTOR DEAL
Simon Rawlinson, Head of Strategic Research and Insight, said:
“The end to the use of the PFI for social and economic infrastructure is good politics as no deal has been signed since 2016. However, finding the finance to plug the gaps left by the EIB - which the budget does not address - along with public sector expertise to deliver publicly funded programmes, may prove to be longer-term liabilities. Meanwhile, given the raft of announcements in connection with future capital expenditure on housing, roads and the high street, the lack of an announcement on the progress of the construction sector deal points to the need for greater coordination between Government Departments.”
ON THE HELP TO BUY EXTENSION
Will Waller, Head of Market Intelligence, said:
“Noticeable by its absence in Hammond’s speech was any mention of the ‘Help to Buy’ Equity Loan Scheme. But the housebuilding community won’t be disappointed. The red book heralds a new Help to Buy Equity Loan scheme that will run from April 2021 for 2 years to the tune of almost £9bn. Even better, it also won’t be contingent on any site-specifics or new planning policy. This is a huge win for housebuilders in minimising uncertainty, particularly crucial as an average of 40% of revenue of the top ten house builders is supported by the scheme and it has played a huge part in driving profitability in an increasingly challenging market. Equally, it will allow more first time buyers to get on the ladder. That said, whilst this policy will provide renewed comfort and opportunity, the red book makes it clear that March 2023 will be the definite end to the scheme. The big house builders will need to invest in evolving business and delivery models.”
ON FUTURE MOBILITY ZONES
Natalie Sauber, Market Intelligence Lead for Manufacturing & Technology, said:
“The Chancellor’s cash injection of £90 million to create future mobility zones is a positive move. Smart transport solutions present a huge opportunity to radically transform how we live, work and travel. It is reassuring to see the Government take another important step in its campaign to embrace the next generation of citizen driven mobility. Now is the time for local authorities and transport bodies to get ahead of the game.”
ON THE HIGH STREET AND BUSINESS RATES
Louise Brooke-Smith, UK Head of Development and Strategic Planning at Arcadis, said:
"The cut to business rates and move to reinvigorate retail areas with funds to improve infrastructure is a positive step by the Chancellor. It will go some way towards addressing the inevitable decline of established areas and the impact of online shopping. A sum of £675m to tart-up high streets is not to be sniffed at, but will it be enough to hold back the tide of inevitability and stop more stores like Debenhams facing closure?
“It’s the changes to planning regulations that might make more of a difference, particularly if it becomes easier to convert empty shops into residential floorspace or offices and there is direct support for more mixed-use schemes. This might just help the transformation of retail areas into community hubs, where the mix of homes, leisure and public space help to create far more ‘destination locations’. This is what many in the planning and retail world have been advocating for some time and it’s encouraging to see the Government seeing things in the same way.
“Hopefully this new direction of travel will mean that the independent shop keeper can benefit from tax incentives, while larger investment funds and asset managers can begin to look pragmatically at new mixed-use town and retail centres that still provide suitable commercial returns.”