HMT Budget & Planning for the Future Blog - March 2020
Posted on March 16, 2020
The Budget takes place against the backdrop of the global outbreak of COVID-19. The fundamentals of the UK economy are strong and the government is well prepared to protect people’s health and support their economic security through this period of temporary economic disruption.
The Budget announces investment in the roads, railways and digital networks that will underpin growth over the coming decade, as well as the world-class hospitals, schools and colleges we rely on everyday.
We set out below the key budget announcements for infrastructure, planning and development.
[…] The Budget takes steps to decarbonise the economy and protect the UK’s natural habitats, ensuring that every part of the UK economy is ready for the challenges of decarbonisation, and ready to capitalise on the opportunities to become leaders in the green markets of the future. This budget […] is the first since the UK’s departure from the European Union (EU).
UK Economic context
1.1 The COVID-19 outbreak clearly represents a downside risk to the forecast, but the scale is highly uncertain and the economic impact is likely to be temporary. […] As an open economy, the UK will be affected because of the wider impacts the outbreak is having on the global economy.
1.13 The impact of a wider spread outbreak of COVID-19 on the UK economy is highly uncertain. The drivers of any economic impact are health-related factors, including how many people get infected, the persistence of an outbreak and measures put in place to protect public health and prevent the spread. There will likely be significant, temporary disruption to the economy. Disruption could include temporary absences from work and interruptions to global supply chains, both of which would constrain the UK’s productive capacity for a temporary period. In addition, the economy could be affected by a reduction in consumer spending and lower business investment, largely reflecting the response to measures to contain the outbreak, and weaker demand for UK exports.
[…] A Coronavirus Business Interruption Loan Scheme to support up to a further £1 billion lending to SMEs, a £2.2 billion grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities.
1.5 With historically low borrowing costs and the public finances in a more secure position, the government can now increase borrowing for investment without compromising fiscal sustainability.
1.25 […] higher productivity remains the only path to sustainable economic growth and rising living standards. Investing in skills and infrastructure to improve productivity across the UK permits growth by enabling firms to pay higher wages, offer goods and services at lower prices, and increase their profits.
1.36 […] the Chancellor has announced by HM Treasury will conduct a review of the UK’s fiscal framework.
1.39 When the review is concluded, HM Treasury will lay before Parliament a new Charter for Budget Responsibility.
1.55 Over the next five years the public sector will invest £640 billion.
1.57 […] These allocations will be informed by early findings from the review of HM Treasury’s Green Book, which will consider how the design and use of project appraisal affects the ability of all areas to achieve their economic potential. […] Consider how to assess and present local impacts and look to develop new analytical methods for transformative or place-based interventions. […] a revised Green Book will be published alongside the Comprehensive Spending Review (CSR).
Levelling up and getting Britain building
1.127 […] through the largest ever investment in England’s motorways and major A roads. The second Road Investment Strategy (RIS2) will spend over £27 billion between 2020 and 2025. It will take forward schemes such as dualling the A66 Trans-Pennine and upgrading the A46 Newark bypass to address congestion, and building the Lower Thames Crossing.
1.130 […] the government will also provide £4.2 billion from 2022-23 for five-year funding settlements for eight Mayoral Combined Authorities (in West Yorkshire, Greater Manchester, West Midlands, Liverpool City Region, Tyne and Wear, West of England, Sheffield City Region and Tees Valley). […] the government would welcome the opportunity to support a range of schemes, such as the renewal of the Sheffield Supertram, the development of a modern, low-carbon metro network for West Yorkshire and tram-train pilots in Greater Manchester. As a first step, the government will open discussions with Greater Manchester, Liverpool City Region and the West Midlands in the coming months.
The government is also taking action to review the Green Book, which sets out how decisions on major investment programmes are appraised in order to make sure that government investment spreads opportunity across the UK. – This is long overdue as the current uplift in land value appraisal process is not fit for purpose in the regions where projects are relying upon public funding.
Growth across the country
1.154 […] set up the £3.6 billion Towns Fund to support the regeneration of high streets, town centres and local economies. […] consultation on creating up to 10 new Freeports.
2.120 […] English Devolution White Paper to be published in the summer, setting out how it intends to meet its ambitions for full devolution across England.
1.155 […] Government agreed a devolution deal with West Yorkshire to establish a Mayoral Combined Authority with a directly-elected Mayor from May 2021.
2.123 […] up to £500,000 to support Bradford in its regeneration and development plans to increase the benefits of potential Norther Powerhouse Rail connections.
1.156 […] a UK Shared Prosperity Fund to match domestic priorities. […] At a minimum, it will match current levels of funding for each nation from EU structural funds.
1.157 […] the government is committed to moving 22,000 civil service roles out of Central London within the next decade […] HM Treasury will establish representation in all of the nations of the UK.
2,124 […] British Library’s plans to open a major new site in the centre of Leeds, creating a new British Library of the North. The government will provide a £25 million Heritage Fund to the West Yorkshire Combined Authority to support the Library in establishing this new site.
1.134 […] Gigabit broadband provides a step change […] £5 billion to support the roll out of gigabit-capable broadband in the most difficult to reach 20% of the country.
1.143 […] an average of 300,000 homes a year by the mid‑2020s.
1.144 […] £12.2 billion for the Affordable Homes Programme […] £400 million for ambitious Mayoral Combined Authorities […] Housing Infrastructure Fund totalling £1.1 billion for nine different areas including Manchester, South Sunderland and South Lancaster.
1.145 […] Planning White Paper in spring. See https://assets.publishing.serv...
Investing £400m to use brownfield land productively – the Government will work with ambitious mayors and local leaders to regenerate local brownfield land and deliver the homes their communities need on land which is already development. (Planning for the Future –Paragraph 10 – bullet point 1)
1.129 The government intends to make an unprecedented investment in urban transport, starting by confirming allocations of over £1 billion from the Transforming Cities Fund.
2.84 Transforming Cities Fund […] £317 million for West Yorkshire, including £39.9 million for Halifax delivering a new bus station, improved rail station and other improvements to complement the revitalisation of the town centre and £30 million for active and sustainable travel across Bradford.
Flooding and water
1.138 The government will double the amount it invests in the flood and coastal defence programme in England to £5.2 billion over six years.
1.139 The government will provide £200 million over the next six years for a place-based resilience programme.
Supporting people and families
The government will invest an additional £1 billion to remove unsafe cladding from residential buildings above 18 meters […]. The Budget also includes action to reduce rough sleeping, providing £643 million for accommodation and support services to help people off the streets.
Business Rates Reliefs
1.100 To support small businesses affected by COVID-19 the government is increasing further discounts of 100% for 2020-21.
1.102 […] a bespoke time-limited deferral period may be agreed on HMRC liabilities owed and a pre-agreed time period to pay these back. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19.
Growing a greener economy
The budget announces investment in electric vehicle charging infrastructure […] ensure that drivers are never more than 30 miles from a rapid charging station, provides £532 million for consumer incentives for ultra-low emission vehicles, and reduces taxes on zero emission vehicles.
From 2025, the Future Homes Standard will require up to 80% lower carbon emissions for all new homes.
Investing in the NHS
1.109 […] over £100 million in 2020-21 to make progress on 40 new hospital projects.
Improving local services and infrastructure
1.123 […] The government supports this activity […] by offering low cost loans through the Public Works Loan Board (PWLB). […] in recent years a minority of councils have used this cheap finance to buy very significant amounts of commercial property for rental income, which reduces the availability of PWLB finance for core local authority activities. […] the government will consult on revising the terms of PWLB lending to ensure Local Authorities continue to invest in housing, infrastructure and front-line services. […] the government is cutting the interest rates for investment in social housing 1 percentage point, and making an extra £1.15 billion of discounted loans available for local infrastructure projects.