Chancellor Philip Hammond has announced a £44bn investment in new housing, allocated more money for infrastructure and vowed to spend on skills.
In what was trailed as a “balanced Budget”, Mr Hammond pledged £1bn in discounted loans for local authorities to invest in infrastructure projects.
He also confirmed a deal with the CBI and the TUC to improve skills, including in the construction sector, which has been given an extra £36m to help train apprentices.
However, the chancellor’s biggest announcement was saved for housing, which will see £44bn ploughed into a range of schemes, from stamp duty savings to one million homes along the Oxford-Cambridge corridor.
Commenting on the housing market, Mr Hammond said: “Young people today will rightly feel concern over their future prospects and that is the housing market. Rents absorb too high a portion of monthly income.
“We send a message to the next generation that getting on the housing ladder is not just a dream of your parents past but one for your future.
“We have increased the supply of homes by 1.1m since 2010 and housebuilding stands at its highest level since the crash.”
Noting that SME housebuilders required support and land needed to be made available to help stem higher prices, Mr Hammond said: “We will commit £44bn of capital funding loans and guarantees to allow the delivery of 300,000 homes by the mid-2020s.”
The chancellor also allocated new money for the homebuilders fund, a £630m small sites fund to unstick delivery of 40,000 new homes, a doubling of the housing infrastructure fund, and £1.1bn to unlock strategic sites.
The Budget also featured a lifting of HRAS caps to get councils to build again and £34m to develop construction skills across the country.
“We will focus on the urban areas where people want to live and jobs are created, we will make the best use of our urban land and protect our green belt,” he said.
“We will ensure that councils in high-demand areas will permit more homes for first-time buyers and affordable rent.
“The Homes and Communities Agency will expand to become Homes England with a remit to facilitate the delivery of new homes where they are needed.”
Commenting on the National Infrastructure Commission report on East West Rail, the chancellor said: “Today we back their vision and build up to a million homes by 2050 including the road and rail infrastructure to support them.”
Day One of the CN Summit saw East West Rail chairman Rob Brighouse reveal it will pursue a design build, finance and maintain (DBFM) contract for the proposed Oxford-to-Cambridge line.
Commenting on the figures Head of communications at the Infrastructure and Projects Authority Alex Green-Wilkes said: “The government will be making available £15.3bn f new financial support for housing over the next fve years. This, together with previous announcements, brings total support to £44bn.
“The big anouncement is the national productivity investment fund has been increased to £31bn and that will be spent on actual projects. Projects on key cities, so the new housing infrastructure fund to support new housing, which is up to £5bn.
“I think the message from the Budget is that if you sieze the opportunity of brexit and reduce uncertainty where we can that is the intention.”
Turning to the regions, the chancellor noted the construction of Crossrail and HS2 but also the Northern Powerhouse, saying: “We are Investing £300m to ensure HS2 infrastructure will encompass Northern Powerhouse solutions.
“We are developing a local industrial strategy with Manchester, and we are working on a second devolution.” Mr Hammond also announced £30m to improve digital connectivity on the TransPennine route.
However, there was no further developments on Crossrail 2, with Mr Hammond merely stating that the government “continued to work with TfL” on the funding for the £31bn scheme.
At the CN Summit yesterday, GLA deputy mayor Val Shawcross revealed that a meeting with officials was scheduled for shortly after the Budget, at which a “more concrete decision” on Crossrail 2 could be reached.
The chancellor will also invest £123m in the Redcar steelworks, which has been renamed South Tees Development Corporation site.
The chancellor said that “in the aftermath of the appalling events of Grenfell Tower”, the government would provide £28m to Kensington and Chelsea Council for work on regeneration and mental health support for the local community.
He said: “This tragedy should never have happened and we must ensure this never happens again.
“If any local authority cannot access funding to pay for essential fire safety work they should contact us immediately. We will not allow financial constraints to get in the way of any fire safety work.”
Productivity and skills
On productivity, the chancellor mentioned that productivity growth had remained “stubbornly flat” for a number of years.
Mr Hammond said: “Either we embrace the future and seize opportunities, or reject change and turn inwards to the failed and irrelevant dogma’s of the past.
He announced the productivity fund would be extended to £31bn. He also allocated £2.3bn to R&D investment.
Plans were revealed to invest £500m into 5G, faster broadband and AI, as well as a new geospatial data commission. Mr Hammond stated an aim to unlock £20bn in “knowledge-intensive industries” though the British Investment Bank.
The chancellor said the government would stand ready to replace European investment funding “if necessary”, which will come as a relief to those in the industry looking for long-term safeguards over infrastructure projects after the UK leaves the EU.
On apprenticeships, Mr Hammond said the government would fund a further £20m to support FE colleges to prepare for T-levels.
The government will also work with the CBI and the TUC and set the strategic direction for a new training scheme that will cover industries including construction and invest £30m in digital skills and learning.
He added: “Backing skills is key to unlocking growth nationally.”
Mr Hammond had been put under pressure prior to delivering the Budget, with a number of industry commentators stating that it was “make or break” for the chancellor.
On Brexit, Mr Hammond announced that a further £3bn would be set aside for Brexit preparations on top of the £700m already allocated to allow the country to be prepared for “any outcome” with the negotiations with the EU.
The chancellor also confirmed that the government would allocate £40m to fund construction skills.
Liz Jenkins, partner at law firm Clyde & Co, said the funds were welcome, but that it would take more to stem the outflow of migrant labour post-Brexit.
“The investment could also be seen as a short-sighted solution to a long term problem. Retraining adults as construction workers would provide some labour but once they retire we’ll be back to square one, unless we’ve trained a significant cohort of today’s young people to fill the gap.”
“This initiative needs to be coupled with effective management of the CITB reform and ensuring the money received from the [CITB] levy is invested to ensure future generations of construction workers will be there to build post-Brexit Britain.”