With the first COVID-19 vaccinations underway this week we can finally start to look to 2021 with a sense of relief and the prospect of working life getting back to business as usual. But the economy is much changed over the last year and the recovery will take time. Unemployment benefit claimant numbers are the highest in 25 years, 9 million people are furloughed, high street retailers remain in freefall and Brexit brings much uncertainty.
Reflecting regional variations in the economy and the pandemic’s economic fall-out, the Chancellor’s November Spending Review set out a range of measures to boost the economy with the development sector central to these proposals.
The Spending Review saw some £100 billion of capital spending announced on hospitals, schools and transport. A ’Levelling Up Fund’ of £4bn was launched to drive growth and regeneration including in areas that have received less government investment in recent years. We have a new National Infrastructure Strategy aimed at recovery, meeting net zero emissions by 2050 and again ‘levelling up’. The Strategy is supported by a new national infrastructure bank to attract private finance to infrastructure.
The Review also earmarked £7.1 billion for a National Home Building Fund, focused on land remediation, land assembly and infrastructure and loan financing for housebuilders. There are lesser monies set out for the government’s planning reform agenda (£12m) and the Oxford-Cambridge Arc programme (£4m).
Another sign of changing spending attitudes is a revised ‘Green Book’, the Treasury’s guidance on appraisal of public projects used at evaluating investment. Re-released with the Spending Review, the Green Book is rebalanced towards policy objectives rather than value for money assessment, which tended to favour higher land values and jobs in the south.
At a glance, the government has begun its recovery drive which appears to provide a more level playing field for public investment. Local areas across the country clearly need to be proactive about growth, be that in their Local Plans or local recovery strategies, which should look to understand their local strengths and maximise funding available. Construction is forecast to be one of the largest employment growth sectors in the next 5 years, outperformed only by IT and healthcare, and we will all need to work together to ensure this happens.
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