Leading figures and organisations across the industry have been responding to Philip Hammond’s 2018 Budget. CN rounds up the sector’s reaction.
More from: Budget 2018: Hammond kills off PFI
PFI axe prompts concerns
PwC’s infrastructure lead Richard Abadie suggested the cancellation of PFI and PF2 would make “little difference”.
“PF2 as a policy has delivered very little since it was introduced, so it’s demise will make little difference,” he said. “More important is how government will accelerate infrastructure investment to put us on par with our G7 peers, irrespective of whether publicly or privately financed.
“Nevertheless, the chancellor confirmed 50 per cent of infrastructure investment is privately financed and will continue to be used where it delivers value and transfers risk. I expect private finance will need to be used to build future infrastructure projects.”
U+I chief executive Matthew Weiner highlighted Mr Hammond’s repeated commitment to different types of public-private partnership. “The chancellor is quite right to promote the greater use of public-private partnership,” he said.
“PPP must offer a fair deal for all parties if it is to survive and thrive and deliver for everyone – the public sector, for the local communities that have a stake in it and for development partners.
“PPP has been tarnished, often confused with the private finance initiative which the government is quite rightly stepping away from”
He also pointed out the distinction with PFI and the “tarnished” image of public-private tie-ups.
“In recent years, the term PPP has been tarnished, often confused with the private finance initiative which the government is quite rightly stepping away from.”
DLA Piper partner Colin Wilson meanwhile raised concerns over the breakdown in public-private relations and the potential threat to investment.
“The lack of confidence in the PFI model as expressed by Philip Hammond, and Labour’s threats of nationalisation, are unfortunately clear signs of a lack of trust between the public and private sector,” he said.
“There are many partnering alternative models available to facilitate [infrastructure] investment as opposed to the PFI model.
“The market must be given confidence by government that involvement in UK infrastructure is worth pursuing”
“It is important, however, that the public and private sector finds a way of forging effective partnerships, working together to structure these projects so as to ensure their successful delivery when they are brought to market.
“The market must be given confidence by government that involvement in UK infrastructure is worth pursuing. Otherwise investors will turn their focus to other markets and the UK will fall further behind the other G7 nations in the quality of its infrastructure.”
Mixed bag on residential
Jean-Marc Vandevivere, chief executive of build-to-rent developer Platform, said Mr Hammond had “little to offer” the sector.
“Today’s Budget was good news for first-time buyers and those on the waiting list for affordable housing, but for renters the government had little to offer,” he said.
“Continuing to squeeze buy-to-let landlords without giving further incentives risks undermining the supply of new rental homes”
“Continuing to squeeze buy-to-let landlords without giving further incentives to the build-to-rent sector risks undermining the supply of new rental homes at a time when demand for rental properties is at an all-time high.”
However, Paul Hackett, chair of the G15 group of housing associations and chief executive of Optivo, welcomed the £500m boost to the Housing Infrastructure Fund.
“The measures announced today – including the extension of stamp duty relief to shared ownership properties, new commitments for the Housing Infrastructure Fund and measures to encourage conversions from commercial to residential on high streets – are helpful,” he said.
“Crucially, tomorrow will see the lifting of the local authority borrowing cap and could unleash a new generation of council housebuilding.”
Sir Oliver Letwin’s report on whether major housebuilders have been landbanking also prompted reaction from various quarters, including WYG built environment director Gerald Sweeney.
“No measures have been proposed in this Budget, so we continue to wait for their solution to the under-delivery of housing”
“After recommendations from an independent review of build-out rates, the government continues to look at how it might capture increases in land value generated by planning permissions,” he said.
“Interestingly, no measures have been proposed in this Budget, so we continue to wait for their solution to the under-delivery of housing now that it agreed that it isn’t because of land banking by house builders.”
Retail revamp welcomed
British Property Federation CEO Melanie Leech was quick to praise efforts to drive retail redevelopment – but also called for a review of the use of company voluntary arrangements.
“The announcement of additional investment into a Future High Streets Fund is welcome, and when combining with the proposed planning reform and a High Streets Task Force has real potential to be a game changer for urban centres,” she said.
“The BPF has called on government to conduct an independent urgent review of CVAs”
“However, it’s crucial not to forget some of the other knotty issues that property owners have to grapple with.
“We support the proper use of CVAs to help businesses in genuine distress and are keen that CVAs continue to achieve these objectives. There is, however, increasing frustration about the practice of some recent CVAs.
“The BPF has called on government to conduct an independent urgent review of CVAs.”
WYG’s Mr Sweeney also gave his thoughts to the chancellor’s various measures aimed at rescuing the beleaguered high street retail market.
“The Budget includes suggestions to ease planning restrictions, possibly including new permitted development rights, on converting town centre shops to other uses, including residential,” he said.
“We must go much further with new planning laws allowing new development to build up and increase density levels”
“In the main, permitted development rights allow mixed use residential development to be successful. The revitalising of old and obsolete offices has delivered much needed residential units that people can afford and offers something different to the standard sub-urban new build.
“These units are neither better nor worse but importantly, they are different – variety is needed to begin the process of healing our town centres but we must go much further with new planning laws allowing new development to build up and increase density levels.”