Budget 2015: Little Real Impact On Infrastructure And Housing

The Government Needs to Provide a National Strategic Plan: According to Irwin Mitchell


Karen Roberts, Press Officer | 0207 400 8714

A series of measures to ease the shortage of housing and to promote infrastructure were announced in the 2015 Budget, including confirming:
• the introduction of the first 20 housing zones for construction outside London and extension of 8 enterprise zones across Britain, with new zones in Plymouth and Blackpool;
• funding for a London Land Commission;
• the introduction of a help-to-buy ISA which would allow households to save for their first home;
• pilot schemes to allow the Greater Manchester Combined Authority and Cheshire East and Cambridgeshire and Peterborough to retain 100% of Growth in Business rate income;
• £7m to be provided to the Greater London Authority to support the development of the Croydon Growth Zone, as well as ongoing support for the regeneration of Barking Riverside and Brent Cross;
• the publication of a consultation document on reforms to the compulsory purchase scheme;
• devolution of further powers to the Mayor of London, including over planning;
• commitment to fund HS3, the high-speed rail link between Leeds and Manchester;
• the publication of a comprehensive transport strategy for the north;
• a new city deal for the West Yorkshire Combined Authority;
• a  new £60m energy research centre in Birmingham and that the new energy catapult will be based in the West Midlands;
• £7bn investment in transport in the South West, including new intercity rail franchise;
• to enter in to the first phase of negotiations on a Contract for Difference for Swansea Bay Tidal project; and
• the introduction of 'generous' tax allowance to stimulate investment in North Sea oil industry from the start of April, with Government investing in new surveys of UK continental shelf.
Rob Thompson, Head of Real Estate at Irwin Mitchell in London said:

Expert Opinion
These measures are a little underwhelming, given that the Chancellor focused on an economy for an electorate about to decide whether Britain is "walking tall" and is the "Comeback Country" - or not. With opinion polls currently fluctuating within the margin of error, the 2015 Budget sought to prove the Government's economic credentials since 2010 while also stimulating some confidence in UK citizens whose votes his party covets in just a few weeks' time - the new Help to Buy ISA for first time buyers is indeed the populist eye catcher.

"As much as these measures are welcomed as a start to a process and and it is great to see emphasis on supporting growth and industry beyond London, most of these measures are not new initiatives and are going to have little impact in the UK property and infrastructure arena. This is because the 2015 Budget has failed to address some of the real issues holding back economic growth.

"For example, even though George Osborne said that "our ambition for a full national recovery is not limited to a Northern Powerhouse” and that further devolution of powers was mentioned as was the commitment to some major infrastructure schemes, we cannot look at regional schemes in isolation. Clearer strategic thinking and decision making is required. A national strategic plan which considers the delivery of housing and infrastructure nationally over the next 20 years is essential.

"In addition, the housing support packages have not addressed the greatest threat to London’s economic resilience which is the weakening of housing affordability. The only solution for this is to build more homes. Giving money to first time home buyers without building any more homes just means that the price of owing a house gets pushed up. There were not many announcements in terms of cutting red tape, apart from the investment in a London Land Commission. However, in order to ensure the delivery of public sector land and brownfield sites to developers, this Land Commission needs to be efficient in freeing up land to avoid further delays. Time will tell whether this initiative will deliver."

Rob Thompson, Partner