Rookie chancellor’s first Budget promised ‘jam tomorrow’ for construction
Rishi Sunak’s first Budget began with a series of huge spending measures to counter the impact of coronavirus on the economy, before he revealed his plans for construction, including £600bn for infrastructure, the largest investment since 1955.
Housing will get a £9.5bn boost for the Affordable Homes Programme, taking it to £12bn from 2021-22, while £1bn was pledged to remove all unsafe cladding from public and private buildings over 18m high. And contractors will be relieved to hear that fuel duty freeze will remain in place.
Here is a summary of our main takeaways for construction:
- £600bn for infrastructure. Sunak confirmed that the spend will be triple the average amount spent on infrastructure over the past 40 years, and the biggest spending commitment since 1955
- £30bn for a fiscal stimulus package to mitigate disruption caused by coronavirus
- A coronavirus business interruption loan scheme to support up to a further £1bn of lending to SMEs, a £2.2bn grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities
Transport and roads
- Over £27bn investment on strategy roads in England between 2020 and 2025
- £4.2bn over a five-year integrated transport settlements for eight city regions
- A two-mile tunnel for the A303 road diverting it away from Stonehenge
- Lower Thames Crossing, increasing road capacity across the river, east of London, by 90%
- £500m every year to fill potholes
Housing and hospitals
- £1bn building safety fund to ensure all unsafe combustible cladding (not just ACM panels) will be removed from all high rise buildings over 18m in height
- An additional £9.5bn for the affordable homes programme
- £1.1bn allocated from the housing infrastructure fund to build nearly 70,000 homes in high demand areas across the country, including Manchester, south Sunderland and south Lancaster
- £5.2bn for flood defences between 2021 and 2027, to protect 336,000 homes
- £400m for mayoral combined authorities and local areas to establish housing on brownfield land
- £6bn in extra funding to help build 40 new hospitals
R&D and universities
- Overall the government plans to increase public R&D investment to £22bn per year by 2024-25, taking public spending on R&D to 0.8% of GDP
- £1.5bn over next five years in capital spending to refurbish further education colleges
- £120m to bring FE and HE providers in England together with employers to open up to eight new institutes of technology
- £95m for providers in England for facilities & equipment to support T-level rollout
- £500m over the next five years to support the rollout of a fast-charging network for electric vehicles, so drivers will never be further than 30 miles from a rapid charging station
- A carbon capture and storage infrastructure fund to establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030
- Tax on electricity to be frozen but raised on gas - no details yet
- Red diesel tax relief to be removed from April 2022, except in agriculture, fish farming, rail and for non-commercial heating
- SMEs to be offered loans of up to £2m underwritten by the government to get firms through the coronavirus crisis
- Statutory sick pay to be funded by the government for firms with fewer than 250 employee
On the face of it he announced a lot that will have pleased the sector. Hefty infrastructure spending promises and a significant housing boost ticked the sought-after spending boxes. But several industry observers questioned the shortage of detail.
“In principle, lots of eye-catching headlines but in practice I say … show me the money,” Richard Steer, global chairman of consultant Gleeds, said afterwards.
Simon Rawlinson, head of strategic research and insight at Arcadis, said there was a lot of “jam tomorrow”.