How Autumn Statement will impact the construction industry

Howard Chapman, Buildingtalk Editor reviews the Autumn Statement including on housing, infrastructure and transport plus first construction industry reaction.

Autumn Statement

Philip Hammond, Chancellor of the Exchequer said he was “focused on preparing and supporting the economy as we begin writing a new chapter in our country’s history”

His aim was to support the economy through Brexit and that the Government was no longer seeking a budget surplus in 2019-20 but aims to return public finances to balance as soon as practicable.

This will also be the last ever Autumn review because next year the Autumn Statement will become the main Autumn Budget – so combining the tax and spending actions. From Spring 2018, when we would normally get the Budget, we will just have a fiscal report. 

He outlined a series of measures to help “ordinary working-class families” and stress that a stable economy, fiscal discipline and better productivity are the best ways to raise living standards.

National debt and wealth

• Economy is growing faster than the national debt for the first time in 14 years
• UK owes £1.64 trillion, that’s equivalent £25,000 for every person in the country
• Debt will rise from 84.2% of GDP last year to 87.3% this year, and will peak in 2017-18 at 90.2%
• Public spending down to 40% of GDP from 45% in 2010
• Richest 1% in UK owns a quarter of the country’s wealth

Housing

• Ban on upfront fees charged by letting agents in England “as soon as possible”
• £2.3bn housing infrastructure fund to help provide 100,000 new homes in high-demand areas
• £1.4bn to deliver 40,000 extra affordable homes

Transport and infrastructure

• £23bn to be spent on innovation and infrastructure over five years
• £1.1bn extra investment in English local transport networks
• £220m to reduce traffic pinch points
• £110m for East West Rail and commitment to deliver Oxford to Cambridge Expressway
• More than £1bn for digital infrastructure
• 100% business rates relief on new fibre infrastructure

Industry response

Keith Aldis, CEO of the Brick Development Association

“The Brick Development Association welcomes the news that major infrastructure investment will continue. Our membership is geared up to continue increases in delivery and supply chains remain strong. We are also happy to see that Government is addressing the issue of affordability in the interim period, and not simply waiting for supply to balance demand”.

John Newcomb, Managing Director of the Builders Merchants Federation

“We welcome the Housing Infrastructure Fund. It will help to invigorate the market by encouraging house building, particularly in areas like London where housing is in high demand.  It will also help to create jobs and growth in construction and the wider U.K. Economy”.

David Hawkes, Policy Manager at CIOB

“The CIOB welcomes the Chancellor’s announcement to commit greater levels of investment in the built environment, as well as further funding for improving productivity and innovation. Well designed and constructed built assets and infrastructure provide enormous value over time, both enabling and contributing to productivity gains”.

Stephen Stone, Chief Executive of housebuilder Crest Nicholson

“Crest Nicholson welcomes Philip Hammond’s commitment to double annual capital spending on housing, investing £1.4bn in affordable housing in order to deliver 40,000 new homes, alongside a £2.3 billion investment in infrastructure around new housing developments. The UK continues to be challenged by a short supply of suitable, affordable housing stock in addition to ambitious targets to reach in order to meet a growing population. Ultimately this investment should help to make the dream of owning a house a reality for a significant number of people”.

Rob Weaver, Director of Investments at Property Partner

“The severe shortage of affordable housing is a critical threat to UK productivity and digging deeper into Treasury coffers is a welcome step towards resolving the broken market. Targeted funds for affordable homes, and across a ‘wider range of housing’, shows a sage commitment to service all tenure types – both rental and homeownership“.

Annie Mauger, Scotland Executive Director  at Chartered Institute of Housing

“Tenants in England will welcome the new ban on letting agent fees, which have already been successfully introduced here in Scotland. We would like to see a greater focus from the Chancellor on boosting the supply of a wider range of housing tenures.”

Chris Pike, Development Director for Infrastructure at Arcadis

 “Investing £450m in the digital railway programme will take our country out of the Victorian era. It will totally revolutionise our railways, increasing capacity, improving the much maligned experience of passengers and improving punctuality and safety. Overall, recognising the acute housing crisis and the need for investment in a post-Brexit environment to target growth opportunities, we welcome the government’s commitment in the Autumn Statement to both housing and infrastructure”.

Ian Ruthven, Managing Director of Barratt Developments Yorkshire West

“It’s good to see continued government focus on housing supply, it is vital that more new homes of all types are built to tackle our housing shortage”.

Michael Thirkettle, Chief Executive at McBains Cooper

“Good news regarding the Government’s commitment to spend on social and economic infrastructure, in particular the £1.4bn aimed at delivering 40,000 new affordable homes in England, £2.3bn housing infrastructure fund to help provide 100,000 new homes in high-demand areas and £3.15 billion for London as its share of the national affordable housing funding to deliver over 90,000 homes. We are disappointed that there was no announcement to streamline the planning process or free up land on the greenbelt – much of which is derelict land rather than areas of beauty”.

Patricia Moore, UK Head of Infrastructure for Turner & Townsend

“Infrastructure is clearly still a priority, with Philip Hammond reaffirming that it’s a powerful way of driving broad-based economic growth.  The successive greenlights for the “three h’s” of infrastructure mega-projects – Hinkley Point C, Heathrow’s third runway, and HS2 (all of which we are involved in) – also give a shot in the arm to Britain’s construction industry and demonstrate official treasury acceptance that infrastructure really means jobs and trade”.

Dr Diana Montgomery, Chief Executive of the Construction Products Association

“While many of the points raised by the Chancellor today were trailed during the party conference, we welcome the government’s commitment to infrastructure, innovation and housing investment as necessary components of a strong, resilient economy whilst helping to address the challenge of lagging productivity.”