Sajid Javid has promised a wave of investment in the less prosperous regions. But what is the best way of splashing the cash?

The 2020 Budget will be closely watched by construction. Not only is the chancellor pledging to splash the cash by kicking off his £100bn investment programme, but it is widely expected that the Budget will be accompanied by both the government’s construction strategy and the national infrastructure strategy. That is a lot of policy to absorb and implement in one go, and it begs the question as to whether it is possible to combine an industry transformation with a promise to “level up opportunity in left-behind parts of the country”.

Simon Rawlinson New

It is an intriguing puzzle, balancing the desire for early and highly visible deliverables with the need to use the investment as carefully and as effectively as possible to increase national productivity, progress towards net-zero and improve quality of life.

This is a far from straightforward challenge. Investment is needed across the UK – from the prosperous South-east, which struggles with expensive housing and high levels of congestion in towns and cities, to the Midlands and the North, which need better skills and connectivity to attract high-quality jobs.

>> Further insight: 2020 vision: What do industry experts expect from construction this year?

Published Arcadis research on opportunities to invest in Britain has highlighted not only the huge gap in capacity and resources in the UK’s secondary and tertiary cities, but also served as a useful reminder that the UK’s best performing cities, such as Edinburgh, suffer from the price of success.

The support of small-town Britain for the Conservative government must be rewarded

From my perspective, there are three key issues that Javid needs to address between now and the Budget. The first is achieving a balance between local and regional spending priorities; the second is the need to support future places as well as those that have been forgotten; and the third is to treat the £100bn as a down payment rather than the totality of the programme.

Achieving the balance between fast, locally focused spending and long-term regional transformation is an intriguing twist to the rebalancing narrative. Before the general election, it would have been reasonable to assume that the combined authorities would be the main beneficiaries of new borrow-to-invest polices. However, the support of small-town Britain for the Conservative government must be rewarded.

>> Read: General election 2019: What are the Conservatives promising construction?

While local-scale investment will undoubtedly improve the quality of life in towns and cities, there is a risk that the dissipation of spending will mean that the big opportunities to improve regional productivity might not get the priority they deserve. The early years of the administration provide an opportunity to pump fast money into quick turnaround regeneration projects, but much of the £100bn will need to be ploughed into long-term programmes associated with transport, health and the crumbling education estate.

There needs to be a big focus on sustainable placemaking

Choosing to prioritise “to-be” places alongside “forgotten” places could also prove to be fiendishly difficult. With the UK’s population forecast to grow by 4.5% over the next 10 years, the government will need to look to the future as well as to the present. Imagine the difficulty of assessing the competitive merits of investment into the Oxford-Cambridge corridor once investment rules are tweaked to take account of benefits at a regional rather than national scale. Whatever the outcome of such an assessment, it is evident that, in addition to levelling up, there needs to be a big focus on sustainable placemaking, so there is no risk that to-be places could become the forgotten places of tomorrow.

In research due to be published next week, Arcadis highlights five fundamentals of placemaking: community; funding and delivery; design and public realm; collaboration and sustainability. All of our findings are highly relevant to the planned investment programme, but I pick out three that are particularly pertinent.

The first is that the investments will need to put people first – the delegation of spend to regions and towns will be particularly important. The second is that capacity needs to be built to deliver these places, not just in terms of skills, but also in terms of the way that planning and funding work. The last one is that places need to be built to last, perhaps taking the lessons from the forgotten places to ensure the long-term adaptability and social and economic viability of the new places that we build. 

Without careful consideration, the use of investment to firefight in response to growth could store up problems for the future, even as we solve the immediate problems of the present day.

I really hope that the Budget will create a framework for long-term investment in the UK

The final consideration is scale. On the one hand, does industry have the capacity to deliver a rapid expansion in the investment programme, and on the other, whether £100bn will actually make a noticeable difference. After many years close to the bottom of the OECD investment league, it is going to take more than a five-year investment programme to close the UK’s regional gap. So I really hope that the Budget will create a framework for long-term investment in the UK.

>> Read: Budget 2020: Prepare yourselves for the government’s construction strategy

It should make some bold decisions on long-term schemes such as Northern Powerhouse Rail while focusing fast money into regional towns and cities to drive momentum. Above all, delivery should be organised as regional programmes exemplified by the planned northern construction corridor, so that delivery benefits from scale too.

So, where does this leave the promise and practice of levelling up? Despite the Treasury’s plans to tweak the investment rules, government will always have a duty to maximise the benefit and productivity-enhancing potential of its investment. So, while there is a pressing need to get spades in the ground, before we unleash the £100bn, let’s take the time to get the projects, programmes and places right.

Simon Rawlinson is head of strategic research and insight at Arcadis UK