Given it was the chancellor’s last Budget before the UK leaves the EU, it was never going to be packed full of long-term spending decisions.
Instead, his speech was littered with sticking-plaster announcements and short-term measures that offered little for industry to sink its teeth into.
Take the £420m allocated to local highway authorities to tackle potholes. A constant headache for drivers, this money will go some way towards appeasing their concerns. But with one in five local roads now classed as structurally poor – according to the Asphalt Industry Alliance’s 2018 survey of local authority highway departments – any new money, like the asphalt applied, will be thinly spread.
Regional transport on the agenda
There was, however, some encouraging new spending on infrastructure outlined in the chancellor’s speech. With continued support for Northern Powerhouse Rail and the Midlands Engine, both initiatives are now firmly back on the agenda.
The £20m to further develop the plan for the East West Rail corridor is an indication of the government’s commitment to this exciting new infrastructure spine. That sum, quickly spent, will need to be followed through to ensure the scheme moves beyond initial planning.
Despite these positive moves, industry must now wait for next year’s full spending review and the government’s formal response to the National Infrastructure Assessment (NIA) for further clarity on these and other long-term infrastructure projects.
The interim response to the NIA was published alongside the Budget, and promises a comprehensive National Infrastructure Strategy in 2019 that will set out the government’s priorities.
Filling the funding gap
While the government has committed to formally responding to the NIA next year, one thing remains clear: the state simply cannot finance the report’s ambitious infrastructure priorities alone.
“The industry must continue to challenge government to ensure further certainty on the long-term vision for infrastructure”
And with the chancellor – while acknowledging the role of private finance – finally laying to rest the politics of PFI/PF2, construction will also have to wait and see how funds will be secured for projects that are not entirely Treasury-financed. If government is to attract private investment, it must swiftly turn visions for new infrastructure into action.
In reality, it is unlikely there will be any meaningful progress on new infrastructure until the country is clearer on the details of its withdrawal from the EU. The chancellor said in his speech he expects the “deal dividends” will allow further funding for the spending review.
If this Budget was more of a prelude to next year’s spending review, the industry must continue to challenge government to ensure further certainty on the long-term vision for infrastructure. A bold, actionable pipeline is needed to attract much-needed private sector investment.
John Hicks is director and head of government & public at Aecom