Chancellor George Osborne gave his Autumn Statement on 3 December, as discussed on on Talking Business blog. There was not much within the Statement which referred directly to construction, but the Chancellor did touch on points covered more extensively within the National Infrastructure Plan (NIP) 2014 (published before the Statement on 2 December).
Some of the relevant construction points from the Statement are detailed below. Further detail has been taken from NIP 2014.
The Chancellor stated he was putting the ‘Northern Powerhouse at the heart of’ the Statement, and indeed he did; much was made of lessening the gap between the North and South.
- The Chancellor referred to the Devolution of Powers for Manchester, which allows the city to elect its mayor, effectively placing it on the same footing as London
- Major funding was also announced for new projects in the North, including science, infrastructure and culture
- Investment of £253m was announced for a new Sir Henry Royce Institute for advanced material science. The Institute will be based in Manchester, with branches in Leeds, Liverpool and Sheffield
- The Chancellor also announced funding for ‘The Factory Manchester’, a new theatre space, with a view to boosting culture
- Finally further, infrastructure will be improved with work on Blackpool and Manchester’s tram services, HS3 (providing better connectivity for the North) and ‘smart motorways’, which will ease congestion on the roads surrounding Manchester.
The Highway Code
‘Strategic road enhancement’ is a frequently used term within NIP 2014, and unsurprisingly so, given that £900m investment has been announced to improve the UK’s roads.
Of particular note are the improvements to the A14 Cambridge to Huntingdon route for better freight movement and the work on the A303 and A1 outside Newcastle. These improvements will unlock housing potential for these areas, with easy access for construction teams.
Home is where the heart is
The Chancellor announced that planning approvals and housing starts are at a 6 year high, and that 506,000 new homes have been built under the current Government. The major announcement of the Statement was arguably the Stamp Duty tax reform, making purchasing homes more affordable for 98% of homebuyers.
This could mean that with commercial banks able to invest again, new builds across the country may increase. Certainly, the following housing projects are currently in the pipeline:-
- £1.5bn investment in A14 – possibility of 10,000 homes at Northstowe;
- £55m extension of the London Underground – possibility of 11,000 homes;
- Brent Cross regeneration work – possibility of 7,500 homes;
- Ebbsfleet garden city – possibility of 15,000 homes.
Money, money, money
The finance update to NIP 2014 (published in March 2014) provides that the government set out £125bn worth of finance opportunities for 2019 – 2020, and beyond.
NIP 2014 goes further in that it provides a breakdown of these investment opportunities, as follows:-
- 20.6% (totalling £67.5bn) of planned investment will come from public investment;
- 13.8% (totalling £45bn) will come from a mix of public and private investment;
- 65.6% (totalling £214.4bn) will come from private investment.
There is ‘increasing liquidity’ in the market for new build assets, according to NIP 2014, despite the financial crisis and general slowing down of lending activity. Commercial banks, therefore, are still ‘significant players’ in infrastructure finance, shown in the above statistics.
At the moment, of course, the above are all projections and possibilities, but there are opportunities for the construction industry to grow and expand. As George Osborne stated, ‘we will support growth across the whole of the UK’.
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