THE PRIME MINISTER, Boris Johnson is announcing a “New Deal” aiming to put jobs and infrastructure at the centre of the government’s economic growth strategy.
In a speech in the West Midlands today, the Prime Minister will commit to ‘build, build, build’ in order to upgrade Britain’s infrastructure and skills to fuel UK economic recovery.
The Prime Minister will say, “We will build, build, build. Build back better, build back greener, build back faster and to do that at the pace that this moment requires”.
The Prime Minister will announce government is bringing forward £5bn of capital investment projects, including £1.5bn this year for hospital maintenance.
On infrastructure, there will be £100m this year for 29 projects in the road network, including bridge repairs in Sandwell and work on the A15 in the Humber, £10m for development of the Manchester rail bottleneck to begin this year.
School rebuilding funding
A ten-year school rebuilding programme, starting from 2020-21 will see £1bn to fund the first 50 projects. The projects will be confirmed in the Autumn, and construction on the first sites will begin from September 2021.
A further £560m and £200m of funding is made available for repairs and upgrades to schools and FE colleges respectively this year.
Digital and maintenance
In other public sector work, the PM is announcing £142m for digital upgrades and maintenance to around 100 courts this year, £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places, aiming to create thousands of new jobs.
For a range of ‘shovel ready’ local projects in England there is a £900m over the course of this year and next, as well as £96m to accelerate investment in the Towns Fund this year. This will provide 101 towns selected for town deals with £500k-£1m to spend on projects such as improvements to parks, high streets, and transport.
National Infrastructure Strategy
In the Autumn the government will also publish a National Infrastructure Strategy to set a clear direction on core economic infrastructure, including energy networks, road and rail, flood defences and waste.
The Government also intends to carry out a review to look at how best to improve road, rail, air and sea links between the four nations.
The Prime Minister is set to say government will also reforest Britain by planting over 75,000 acres of trees every year by 2025. He is set to pledge £40m to boost local conservation projects and create 3000 jobs, including new Conservation Rangers, and safeguard a further 2000 – training young people and others in the community to protect their local environments.
The aim is to safeguard the UK’s natural carbon stores and wildlife habitats in a bid to capturing and removing CO2 from the atmosphere and protecting biodiversity.
The Chancellor will provide an update on the economy next week.
Rehetoric must be now followed up with delivery
NFRC Chief Executive, James Talman, said, “The Prime Minister’s vision to build back better, faster and greener, will be welcomed across the construction industry. Roofers have been calling for certainty over future work and support to retain apprentices and jobs, and this announcement will help to provide that.”
“The Prime Minister’s rhetoric must be now followed up with delivery. We have been calling for the school Condition Improvement Fund to be released, and after months of delay, are delighted that this has now happened. That being said, we are still hearing of Local Authorities delaying projects, and this is having a real impact on roofing contractors. Project Speed should apply to all public sector work, not just high-profile infrastructure schemes.”
“What is needed now is not just fast-tracking of current projects and funding, but incentivising future investment. Speed is one thing, but we also need substance. The government should now look to tax incentives to encourage investment.”
Not new, additional money
Noble Francis, Economics Director at the Construction Products Association commented on Twitter this morning: The important point to note about the Prime Minister’s promises to “build, build, build” is that it is not new, additional money despite all the public relations and spin behind it.
- £12bn affordable homes programme was in Budget 2020 as a 5-year programme not 8
- 1,500 unit pilot of ‘First Homes’ is detail on a previous policy
- Funds from £400m Brownfield Land Fund is an allocation of Budget 2020 funding
Looking at Government’s non-residential announcements, the £1.5bn hospital maintenance, £100m roads projects and £200 million for FE colleges are merely allocations of existing funding.
The ‘over £1 billion’ to fund the first 50 projects of a ten-year school rebuilding programme replaces the Priority School Building Programme2 and the £560 million for school repairs and upgrades is the outcome of the 2020/21 Condition Improvement Fund bids delayed from April.
TRA Backs Boris
Nick Boulton, Chief Executive of the Trussed Rafter Association (TRA) said: “This announcement couldn’t have come at a better time. As the construction industry is getting back on its feet, it is good to know the Government is prepared to spend where necessary and make good on its earlier promises.
“As originally set out in the Budget in March, the £12bn allocated for affordable homes will really help the current situation and the sooner it can be accessed the better. We do not know how long this virus will be part of our lives and so we should start building the safe, affordable homes that create greater resilience, and allow social distancing, as soon as possible. The Brownfield Land Fund is also important to bring much-needed new homes to city locations.
“Our members need to see a clear pipeline of demand to give them the confidence to protect jobs, take on apprentices and continue their own investment plans. A confirmed commitment to deliver 180,000 affordable homes will help to support that confidence.”
The right balance between major national projects & local infrastructure
Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson says, “The Prime Minister’s announcement today might not reach the heights of Roosevelt’s new deal but it still gets one very important thing right: it focuses on smaller local projects like schools, hospitals and high streets that can be delivered quickly. This is exactly what we need to keep work flowing to the sector and to shore up the future of SME construction firms.
“Smaller local projects, in contrast to developments like HS2, benefit SME construction firms more, as they have the resources to handle this size of contract. It’s these firms who need the most help at the moment. In addition, the smaller the project the quicker it can get up and running, helping to revive the sector and prevent a spike in unemployment. Ideally we should have a good split between local projects and the bigger national items to keep work flowing to the larger construction firms as well.
“Stamp Duty Land Tax (SDLT) and VAT reductions should be the sector’s next big ask. Abolishing SDLT for downsizers of over 65 years old would free up housing stock for families and encourage the purchase of new builds for retirees, who have the money but need an incentive to move. Finally, a well implemented VAT reduction would cut costs and boost demand across the industry, enabling the construction sector to recover at this crucial time.”
Build back greener
Brian Berry, Chief Executive of the FMB, said: “A complex planning system hampers the ability of small to medium-sized (SME) house builders to bring forward new homes. I therefore welcome the Prime Minister’s statement of intent to radically reform this process. Builders have been concerned for years that the planning system needs updating so as to alleviate workloads for stretched departments but also to speed up decisions. More money for the Home Builders Fund is positive, but this must now be open to micro builders delivering five homes or fewer, often on small brownfield sites. The apprenticeship guarantee will be vital in construction where we have been experiencing a skills shortage for many years.”
“It is not possible to ‘build back greener’ and better without upgrading our existing buildings, however. Heating our homes accounts for 20% of total UK carbon emissions and these buildings must be insulated as soon as possible to achieve net zero by 2050. This programme of work will also help to boost activity in the repair and maintenance building sector which has seen workload, employment levels and enquiries all fall to historic lows this year. These firms employ hundreds of thousands of people, and SMEs train 71% of apprentices in construction. They are key to the levelling up agenda and boosting regional growth.”
Not a new deal, a bad deal
Polly Neate, chief executive of Shelter, said: “Despite all the bluster about building new homes, the Prime Minister has today cut his government’s housebuilding budget by a third each year. It’s quite incredible that the he thinks he can build more homes with less money.
“With the housebuilding sector teetering on the brink, we need rapid investment but instead the government has slowed the Affordable Homes Programme for three years. This isn’t a new deal, this is a bad deal. Hundreds of thousands of new homes and jobs are at risk.
“No planning reform of any size or shape is a substitute for a funding cut, let alone reforms that will only result in a small amount of bad quality housing. We’ve already seen what happens when you take the blockers off bad housing – families end up in dangerous, overcrowded, rabbit-hutch homes. Far from bouncing forward this is stumbling backwards.”
In infrastructure terms it’s just a drop in the ocean
The Prime Minister’s announcement of a £5 billion infrastructure spend is a ‘drop in the ocean’ that would fill less than half of the potholes in England and Wales, GMB says,
The one-off cost of clearing the backlog on England and Wales’s pothole-ridden local roads is estimated to be £11.14 billion. The cash injection would pay for just 25% of a new nuclear plant, based on the cost of Hinkley Point C.
Jude Brimble, GMB National Secretary, said, “Five billion sounds like a lot – but in infrastructure terms it’s just a drop in the ocean. It wouldn’t even meet half the cost of filling in the potholes in England and Wales.
“To get our economy back on its feet we need a proper recovery plan based on sustained infrastructure spending targeted to create and keep good quality jobs.”