What caught my eye from the Autumn Statement was the Northern Line extension and Osborne’s support for the Heseltine report
As expected, George Osborne emphasised the importance of investment in the competitiveness of the UK economy.
Additional investment worth £5.5bn in schools and roads is of course very welcome, but the big enablers, PF2, public-private investment in roads and the UK Infrastructure Guarantee have either just been launched or face an extended gestation period.
They will inevitably take a long time to generate construction spend. If there is an eye-catching announcement, it’s the £1bn soft loan to the developers of Battersea for the Northern Line extension.
The CBI called for “fast investment” and some announcements indicate that the Treasury has been listening - £330m for repair and maintenance on roads, £270m for tactical congestion relief and the announcement of a 10-fold increase in annual investment.
For consultants, there is the prospect of early investment in the development of designs for roads to be delivered in the next spending period, and for the extension of HS2 to Manchester and Leeds. For the housing sector, announcements on funding for enabling infrastructure for large housing schemes could make a huge difference to kick starting development - assuming of course that housing remains affordable. In commercial, developers may be more confident in commencing projects with an extension to empty property rates relief.
Looking further forward, “Dash for Gas 2” is a huge capital investment opportunity. How 26GW of new generating capacity can be reconciled with the statutory carbon reduction target is a big challenge and this will create investor uncertainty until any associated risks are resolved.
The really interesting development for me was Osborne’s ringing support for the Heseltine report - which, if successfully implemented, will lead to a huge devolution of Whitehall spending to Local Enterprise Partnerships, with funding being allocated on a competitive basis. No doubt LEPs will be besieged with new prospective members from the industry.
Simon Rawlinson, head of strategic research & insight at EC Harris