Chancellor’s Spending Review | Reactions from the industry

Chancellor’s Spending Review | Reactions from the industry

Construction Plant News collects reactions from across the industry to Chancellor Rishi Sunak’s Spending Review on Wednesday November 25th. This post will be updated as more reactions come in.

Hannah Vickers, chief executive of the Association for Consultancy and Engineering (ACE), responds to the one year spending review and publication of the National Infrastructure Strategy:

“Our industry will be broadly happy with today’s announcements. Despite much of it being previewed over the last week, we still had the surprise of a £7.1 billion National Home Building Fund, which will be warmly received.

“There were important strategic moves too. The intra-city transport settlement will give local bodies more control over transport decisions and their own budgets, but we still would have liked to have seen more progress on Northern Powerhouse Rail a missed opportunity for a clear and demonstrable commitment to levelling-up.

“Much will be made of the changes to the Green Book, which are probably more a symbolic gesture for a shift in culture, than anything else. Equally, the creation of a UK Infrastructure Bank will be welcomed, but I wonder whether the Chancellor is asking the wrong question we already have access to finance, what we are lacking is the appetite from Government to deploy it and investible opportunities so I’m unsure what problem exactly the Bank will be solving?

“We were also pleased to see the principles of the Construction Leadership Council’s proposals for a new local infrastructure fund to accelerate growth and recovery adopted. The £4 billion Levelling-Up fund can potentially be a catalyst for locally-led regeneration, but we hope to see its scope expanded and capability deployed ahead of the UK Infrastructure Bank. This will ensure we maximise its potential impact on recovery, rather than focus on individual tactical project investments.

“However, the Chancellor laid bare the difficult financial state we are in as a country and I worry whether we are being distracted slightly from what’s important. I’d like to see all energies focused on delivering a strong pipeline of projects across the country, so our industry can kickstart growth, act as the catalyst for post-pandemic recovery, and meet ambitions on levelling-up.”

Rain Newton-Smith, CBI Chief Economist:

“Stark forecasts point to tough times ahead. But through his statement, the Chancellor has made some bold autumn decisions to power a Spring recovery.

“The Spending Review lays the foundations for a brighter economic future. A new National Infrastructure Bank, long-term funding for innovation, and a comprehensive plan for creating jobs and renewing skills are just some of the building blocks needed to deliver on this vision. It’s right to take this opportunity to plan for tomorrow.

“But ambition must be matched by action on the ground. The Government’s commitment to build, build, build must be delivered now. This means a clear strategy to upgrade the UK’s infrastructure and publishing the Energy White Paper.

“And there can be no let-up in the support for firms facing new COVID restrictions. Firms need help to survive, then thrive. Business investment and confidence can be the engine of UK growth, creating jobs around the UK.”

Steve Radley, CITB Policy Director:

“The Chancellor’s commitment to a large increase in infrastructure spending next year and publication of the National Infrastructure Strategy give the construction industry greater confidence about the future work pipeline. It is now critical that the right skills and training interventions are put in place to help people benefit as a result of this investment and give the industry the skills it needs.

“A new route from FE into industry, through the expanded construction Traineeship, reform of the Apprenticeship Levy and the prioritisation of construction skills in the Government’s National Skills Fund and new Levelling Up Fund will be essential in doing this.”

Tom Fyans deputy chief executive of CPRE, the countryside charity, said:

‘Coronavirus has led to seismic changes in how and where we live and work and that’s why it is critical that the government begins to level up against rural disadvantage. Rural communities have not received a fair share of public money for too long and aren’t able to fulfill their potential in contributing to the wider economy. We know from painful experience that rural areas have been living with failing public transport and housing systems for decades. Right now, care workers are priced out of nine in ten rural areas and too many people are living in transport deserts – areas where traveling by public transport is not a practical option.

‘The Chancellor is absolutely right to be targeting funding on better place making to create the communities we can feel proud to call home.  But we need to make sure rural communities get their fair share through increased spending on rural transport and housing. Done right, this could provide rural communities with homes and transport they can afford and could also deliver substantial returns for the wider economy – our economic modelling has shown that for every ten new affordable homes built, the rural economy will be boosted by over one million pounds.

‘That’s why we’re calling on the Chancellor to ensure that government departments have the funding they need to breathe new life into rural areas and connect up countryside communities with essential services. This must be tied together with a clear and ambitious plan for rural areas backed by major investment. It’s high time for the government to begin supercharging spending in rural areas to level up against rural disadvantage and support a thriving countryside.’

Bill Zuurbier, chairman of specialist risk management consultancy, Equib:

“Details of the long-awaited National Infrastructure Strategy have come at a critical time for the industry and the entire UK economy. Pandemic-related disruption and financial pressures have accentuated the slowdown in construction activity in recent months, and this injection of public money will be essential for stemming the flow of business failures. There is also an urgent need to get on with it – to start delivering large-scale infrastructure projects and realising the economic benefits the stimulus will bring.

“The launch of a new National Infrastructure Bank will play a vital role in getting the Government’s much vaunted ‘levelling up’ agenda back on track. With the north long complaining that infrastructure spending is biased in favour of the south east, the Chancellor’s pledge to take a fresh approach to the ‘green book’ will be essential for rebalancing investment. Directing billions of pounds into major capital projects will help to revitalise deprived regions of the UK, while ensuring that much-needed public infrastructure is sustainable and fit-for-purpose.

“While this raft of measures will provide a ray of hope for construction leaders, the sector must still wait with bated breath for further details of the ‘Project Speed’ initiative. This will include specifics about the list of projects the Government plans to fast track and build at pace. However, given the ongoing economic shock and the shorter outlook of today’s review, the sector may need to stay patient for a while longer.”

Nigel Jackson, Chief Executive of the Mineral Products Association (MPA):

“Increased ambition from Government on new, better and improved infrastructure is always welcome, but it is the realisation of those ambitions, evidenced with actual delivery on the ground, that will be crucial and the true measure of success. We welcome the plans to improve delivery and will keep pressing Government to ensure they come to fruition.

As the Government itself recognises, the country needs to build itself back to strengthen the recovery from the economic impact of Covid-19. Our industry is essential to this process and unfortunately, we have seen dithering and delay on the delivery of major projects and infrastructure for far too long.

“Government plans have to be credible and deliverable or they simply won’t be worth the paper they are written on; we will be scrutinising the details following today’s statement with keen interest.

“In our submission to the Treasury, ahead of today’s announcement, we called for a focus on delivery on infrastructure and we are glad to see that recognised in the National Infrastructure Strategy. We also set out some of the long-term decisions needed now to support the industry achieve net zero so progress on these is welcome.”

The National and Custom and Self Build Association (NaCSBA) warmly welcomes announcements in the Comprehensive Spending Review:

The Comprehensive Spending Review includes two significant announcements for the sector:

  • £2.2 billion of new loan finance to support house builders, which includes delivering a new
    Help to Build scheme for custom and self builders, as well as funding for SME housebuilders and Modern Methods of Construction.
  • £100 million of funding to support, among other things, the release of public sector land, including for serviced plots for self and custom builders.

Andrew Baddeley-Chappell, NaCSBA CEO, said: “The announcements today, together with those on Right to Build Day, make it clear that the Government is fully committed to do more to increase the diversity of choice in our new homes market.

“Greater choice will lead to great innovation and competition that will lead to more and better homes. We hope to see the new Help to Build scheme up and running as soon as possible together with the additional wonderful, affordable sustainable, uplifting new homes that it will help deliver.”

Chancellor’s £12m for planning ‘woefully inadequate’, says RTPI

Victoria Hills, chief executive of the RTPI, said: “While we understand the impact the pandemic has had on the country’s public finances, the government will not be able to achieve its ambitions to radically overhaul the planning system without adequate investment in local authorities.

“While we welcome the £4 billion Levelling Up fund and the £7.1 billion National Homebuilding fund, we are concerned that local democracy is once again being disenfranchised. Encouraging a bidding culture impacts on the ability for long term planning, creates winners and losers and requires resourcing to apply for.

“In our White Paper response we called for the introduction of Green Growth Boards to deliver joined-up strategies for climate action, infrastructure, housing provision, health and nature recovery on a regional level.”

“Local Authority planning departments have seen a 42% reduction in funding over the past decade which has had implications not just for efficiency or process. The £12 million announced by the Chancellor today is woefully inadequate and fails to recognise the vital role the UK planning system plays in the economic recovery post-Covid.”

In its formal response to the Comprehensive Spending Review (CSR), the Institute set out the vital role planning plays in facilitating economic growth, providing affordable housing, tackling climate change, ensuring access to green space and improving wellbeing. It called for £500m over the next four years to enable planning departments to delivery outcomes efficiently, effectively and equitably.

Ms Hills welcomed the publication of the National Infrastructure Strategy but again called for spending on national infrastructure to be firmly linked into local infrastructure and housing.

“National infrastructure objectives require a place based approach to exploit synergies between sectors including energy, transport and digital, flood defences and green infrastructure, and to coordinate delivery for maximum efficiency. This is a role for planning in the broadest sense.

“Furthermore, city-regions need a robust understanding of their infrastructure need to enable the proposed National Infrastructure Bank to channel public/private sector investment to support delivery.

Simon Rowland, Partner and Head of Construction and Engineering, at law firm Womble Bond Dickinson:

“The Construction industry is responding better than expected to the difficulties caused by the pandemic, as well as having to deal with the challenges of preparing for the end of the Brexit Transition Period next month.”

“Looking at the Chancellor’s Spending Review today, we are pleased see his promises of continued and growing investment in some of the key sectors in which our clients operate, particularly in education – by increasing the schools’ budget next year by £2.2bn – and the housing sector with a new £7.1bn National Home Building Fund.”

“One of the keys to unlocking the potential from these investments will be the need for all parties in the construction process to collaborate and innovate.”

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