The Autumn Statement is next Tuesday. What are you expecting?
On the macroeconomic front, I’d expect revision down of forecasts from the Office for Budget Responsibility (OBR) and a revision upwards of unemployment with the suggestion (incorrectly) that the blame for this is entirely due to the eurozone uncertainty.
On the construction front, expect lots of rehashing of the housing strategy and Green Deal consultation. The housing strategy wasn’t really a strategy, more a collection of policies and could easily have been a report less than 10 pages but was almost nine times’s that.
Mortgage indemnity insurance is the only real reason to smile. It was riddled with inconsistencies and the lack of detail on where the finance comes from for the £400m “Get Britain Building” is extremely concerning.
As for the Green Deal consultation, £14bn for energy saving improvements on 14 million homes over the next 10 years. Hmm… sounds good but 14 million homes in 10 years is 27,000 per week. Every week. For 10 years. And worse, £14bn for 14 million homes? That’s £1,000 per home. Really? For retrofitting the existing stock? The figures don’t work at all.
Otherwise, in the Autumn Statement, look for infrastructure, primarily roads. If you really want to boost construction and economic growth then you focus on repair and maintenance as it is labour intensive and with framework contracts already in place, you can just bring forward spending and raise workloads immediately.
The problem with repair and maintenance though is that it’s not great for headlines. I’d expect to see new roads feature heavily. But how are they going to fund the infrastructure given that they don’t have the finance?
The government is hoping to get financing of £50bn from pension funds, using a model similar to that successfully employed in Canada. The problem with this is that pension funds are relatively risk averse and want a guaranteed payback.
The Canadian model works as it has been used since 1995. After 16 years, I’d expect it to be less risky! Here, we haven’t used pension funds so far. In the medium term it could be a good long term but short term? I wouldn’t expect it.