The detail of how the money is going to be spent had been expected on budget day, but publication of the National Infrastructure Strategy has been delayed until some unspecified date 鈥榣ater in the spring鈥�.
However, chancellor Rishi Sunak delivered a few headlines, indicating that the Conservatives have dumped monetarism for Keynesianism, choosing to spend our way to growth.
拢27bn has been allocated to Highways England鈥檚 road building programme over the next five years, for projects including the A66 in the northeast, the Lower Thames Crossing in the southeast and the A303 Stonehenge tunnel in the southwest 鈥� assuming it can fend of the inevitable legal challenges first.
There is also 拢500m a year for local authority highway maintenance 鈥� what the government likes to call 鈥榯he pothole fund鈥�.
There are also plans for a 拢12.2bn programme to build cheap public sector housing.
And flood defences will get 拢5.2bn over six years, the Treasury says.
Most of the headlines, however, have centred on the 拢12bn package of emergency measures to combat the economic impact of the coronavirus Covid-19.
Industry reaction
Construction Industry Training Board policy director Steve Radley said: 聽鈥淭he promised investment will create the need for tens of thousands more workers in Britain鈥檚 construction sector. This will require a major upturn in the number of apprentices and trainees; government will need to work closely with industry to deliver this.
鈥淭he huge pipeline of work will provide a unique opportunity for government to drive modernisation in how we build, encouraging the adoption of modern methods of construction that will improve productivity in a much tighter labour market.鈥�
Federation of Master Builders chief executive Brian Berry said: 鈥淯nderstandably, the chancellor has delivered a 鈥榝irst aid Budget鈥� to overcome the short-term crisis caused by Covid-19. But he has missed an important opportunity to announce interventions that would support the sustainable, long-term recovery construction needs. The autumn budget must include measures to cut VAT on repair and renovation, and a national retrofit strategy to promote decarbonisation and create jobs and growth."
On measures to support businesses dealing with COVID-19, Mr Berry said: 鈥淏uilders are increasingly concerned about the impact COVID-19 will have on their businesses. Today鈥檚 package of measures to support SMEs through refunding statutory sick pay, making temporary loans and grants available, and support for the self-employed will provide welcome relief to small building businesses and their workers alike."聽
On housing, he said: 鈥淎n investment of 拢13.7bn in housing is welcome news. However, there was no mention of how the government plan to support SME house builders. Master builders are facing major barriers finding land, accessing finance and skilled workers 鈥� these will all need addressing if we are to build 300,000 homes a year.鈥�
Mark Robinson, chief executive of Scape Group, said: 鈥淐onfirmation that the chancellor will double the amount of funding available for flood defences to protect homes and businesses comes as welcome news. Much of our water infrastructure is from the Victorian era and desperately needs to be maintained and upgraded, but revenue expenditure had risen by just 拢3m over the last 10 years. This investment will be ineffective though, unless we think critically about how we work together. Harnessing the knowledge and expertise of our experts and collaborating to operate across boundaries to deliver essential infrastructure must be a priority.鈥�
Rick Green, chair of the Asphalt Industry Alliance, was more concerned about the 鈥榩othole fund鈥�. He said: 鈥淥ver 拢1bn has been wasted chasing and filling potholes on local roads over the last decade. What鈥檚 needed is sustained investment in effective road maintenance to improve the condition of our local roads and help prevent potholes forming in the first place.
鈥淭he 拢2.5bn extra funding over five years announced by the Chancellor today will certainly be welcomed by hard-pressed local authorities dealing with reduced highway maintenance budgets, the effects of extreme weather events such as the recent storms and an ageing network.
鈥淗owever, 拢500m extra a year divided across English local authorities is still a fraction of the amount needed to deal with decades of underfunding, which have led to deteriorating conditions and a rising one-time catch up cost to fix the problem.
鈥淚t鈥檚 a positive move that the new government has recognised the need to allocate much-needed additional funding to our vital local road network. It is certainly a large step in the right direction and we look forward to hearing more detail from the secretary of state for transport. We believe that what鈥檚 needed is an investment of 拢1.5bn extra per year, for 10 years, to bring local road conditions up to a level from which they can be maintained cost effectively to ensure a more resilient network going forward.鈥�
Rhys Harris, associate director of engineering, process & construction at Morson Group, was concerned about the skills shortage. He said: 鈥淚nfrastructure spending was a real centrepiece of today鈥檚 budget as the chancellor laid out his commitment to unlocking construction and innovation throughout the country.
聽鈥淏ut to get Britain building and unleash the economy鈥檚 true potential, it is crucial that we have access to the right talent at all levels to ensure that businesses and their supply chains can attract and retain the right skillsets as and when they need them. Skills are the biggest barrier to us delivering on this ambition, therefore, government, businesses, education providers and talent solution specialists like ourselves must form strategic partnerships to create short and long-term skills frameworks and action plans 鈥� be it technical apprenticeships, upskilling, reskilling and attracting talent from overseas 鈥� that ultimately build active and agile talent pools that are the backbone of every healthy economy.鈥�
Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson, had similar concerns. He said: 鈥淲ithout question the budget is good news for construction overall; the measures to develop infrastructure, particularly new roads, flood defences and broadband will complement existing investment to ensure companies have enough work. Particularly welcome is the 拢1.1bn in funding earmarked for different regions of the UK through the Housing Infrastructure Fund; this will guarantee work for owner managed businesses outside the capital.
聽鈥淭he cloud on the horizon is labour. It鈥檚 unclear whether the industry has the workforce for all the upcoming infrastructure projects and the new immigration system creates more uncertainty. Notably the chancellor did not announce reliefs or grants for capital investment, which would have been one obvious way to mitigate the labour issue.鈥�
Graham Wright, infrastructure tax partner at Ernst & Young (EY), hoped that the budget might lift the nation and the economy, despite the lack of detail. He said: 鈥淲ith confirmation of the delay to the infrastructure strategy, we will have to wait for the detail behind the headlines of 鈥楪etting Britain Building鈥�. However, as largely expected, the new chancellor announced a commitment to 拢600bn of investment over the next five years and new settlements for the regional mayors to help support the ambition of levelling up.
鈥淎s predicted, investment in sustainability, roads, rail and digital connectivity featured heavily, as did 鈥榞reen鈥� transport and the infrastructure to charge it. There were also a number of announcements to support the housing sector, and 40 new hospitals as part of the 拢6bn of investment in the NHS 鈥� a welcome move for a construction sector in need of good news.
鈥淒espite saying relatively little about the detail of the promised infrastructure revolution, the chancellor has delivered a further confidence boost to investors and the construction sector today. Hopefully, this will kick-start a continuing trend of renewed investment and activity. Beyond this budget, the government and business will need to work together to identify 鈥榮hovel ready鈥� projects and the resources and capabilities available to deliver them.鈥�
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