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Hammond hints at commitment in low-key Budget

Jon Hart

Another year, another Budget.  

Those with long memories will remember claims during previous statements that “we are the government of builders”.

This year hi-vis has been relatively conspicuous by its absence, but those picking through the bones of the chancellor’s speech yesterday may have identified a few hints among the laboured jokes. 

Housing led the way with a £44bn pledge, reference to five new PPP-financed garden cities (possibly through some new form of developer model), and a commitment to estates regeneration and unlocking sites upon which to build. 

There was also commitment to SME housebuilders and a (muted) promise to shake up the position of the national housebuilders. This will be supplemented by an Oliver Letwin-chaired commission looking at how landbanks could be tackled, which is due to report next spring.

No wonder then there was a negative effect on share prices of the big builders once the chancellor sat down.

What’s in a name?

It will be interesting to see whether the Home and Communities Agency, now to be called ‘Homes England’, is merely getting a name-change or is in fact being given additional statutory powers and clout to shake things up.

“There was only muted reference to Crossrail 2, nothing about Highways England and – for once – no reference to pothole filling”

Likewise, alongside the major announcements for the NHS operating budgets, there was mention of increased capital investment – £10bn over the life of the next parliament. This is probably a tie-in to the long-awaited Project Phoenix, but as always the detail will prove crucial as to how the headline numbers (devolved or otherwise) are converted into real projects. 

The NIC’s backing of the Oxford-Cambridge corridor and supporting infrastructure were also given a thumbs up, with the continued devolutionary roll-out providing a wider backdrop.

The £1.7bn city transport fund had been announced earlier in the week, with Midland Metro looking to take a sizeable proportion of that largesse, plus a second devolution deal for the West Midlands, support to buy new trains on the Tyne and Wear Metro, and enhanced funding to Scotland, Wales and Northern Ireland. 

Under the radar

Transport was a relatively low-key feature of the chancellor’s announcements: £400m investment into electric car infrastructure, extensions to the National Productivity Fund over the next five years (meaning more money for R&D) and an additional £300m to provide rail links into HS2.

However, there was only muted reference and no hard numbers regarding Crossrail 2, nothing about Highways England and – for once – no reference to pothole filling.

This time last year we were promised a pipeline of new PF2s; this appears to have been either forgotten, overlooked or else diverted. It does highlight, however, the shifting sands upon which infrastructure priorities are being developed.

Not trailed prior to the Budget was the £3bn Brexit Contingency Fund. Perhaps this heralds good times ahead for car park builders and owners in east Kent.

Jon Hart is partner – PFI and infrastructure – at Pinsent Masons

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