Osborne’s last coalition Budget signalled that the future of construction is local and devolved
Pre-election Budgets have a character of their own. As a set-piece, they provide a great platform for governing parties to celebrate their achievements and to position pre-election inducements and a pattern of play for the campaign to come.
George Osborne did a bravura job in his whirlwind round-up of the UK’s recent progress – including the little-known fact that Yorkshire has created more jobs than France – no doubt presenting his data in the most advantageous light. He shot some opposition foxes, including proposals for pension tax relief to fund reduced university fees, and focused largesse on target sections of the electorate – savers and home-buyers, for example.
The improving economic outlook means that the chancellor could predict that the current austerity programme will end one year early. Importantly, capital investment will also increase in line with inflation to 2017/18, and at a potentially faster rate aligned with GDP growth from 2018/19 onwards. The government’s position is clear, emphasising the risk of changing course in this year’s election at a critical moment in the UK’s recovery.
But how is this proposition brought to life in an election that will be fought by coalition partners on doorsteps across the country and across all generations? The detail of the Budget report starts to put flesh on how politics is becoming far more localised and how crucial interest groups are being engaged in targeted spending. With much of this spending being focused on housing and regeneration, construction should be a beneficiary, from the £56k refurbishment of the Muni Theatre in Pendle, to the multibillion-pound business case for HS3: the Trans-North vision.
In 2015, devolution underpins the redistribution of business rates, the acceleration of the City Deals agenda, the expansion of housing zones, and changes to planning and skills in London
Technology and communications are not neglected either, with the Internet of Things getting a look in, and it is notable that the Budget’s long-term infrastructure agenda is dominated not by roads or rail, but by ambitious targets for high speed broadband. Was this the first attempt at a “‘flat-white” Budget?
Devolution is an increasingly strong theme in the Government’s Growth Agenda In the 2014 Budget, the D-word did not appear. By contrast, in 2015, devolution underpins the redistribution of business rates in growth areas, the acceleration of the City Deals agenda in Scotland and Wales, the expansion of the housing zone programme, and changes to the planning and skills agenda in London.
The sheer volume of medium-term enabling investments and initiatives focused on towns, cities and regions should at least give an impression that work is being done and that desperately needed investment in housing, infrastructure and training will be delivered for communities which have been involved in the planning.
The 2015 Budget points to the growing importance of the regeneration and housing agenda as a means of addressing wider constraints on the growth of the economy. With budgets still constrained by austerity, and with increasing levels of spending likely to be directed at the local level, let’s hope that if members of the coalition are re-elected, then newly enfranchised city regions have the capability to deliver on the Budget’s promises.
Simon Rawlinson is head of strategic research and insight at EC Harris