Traditionally the Budget is the one parliamentary occasion where Chancellors can enjoy an alcoholic drink while they speak. This stems from Gladstone’s time when Budget speeches were multi-hour affairs, full of thoughtful analysis around the nation’s income and spending. These days they are a blizzard of statistics and sound bites delivered in equal measure. One of the Chancellor’s favoured high-caffeine energy drinks would probably now be a more appropriate dispatch box tipple.
But now that the dust has settled on yesterday's speech, what should we make of it?
Like most Budget speeches it was an intensely political affair. The decision, widely noted in yesterday’s media, to use the better than expected Office of Budget Responsibility (OBR) forecasts to increase spending is based on a hard-headed judgement around keeping voters onside for an election which may only be two years away.
For construction and infrastructure, the ritual phrases around an “infrastructure revolution” were trotted out as usual, but there were no grand schemes announced. In some ways this is no bad thing – while every sector wants its paragraph in The Sun following budget day, we have been calling for a stable pipeline of projects, so we should not complain too much when the Budget documents refer back to the National Infrastructure Strategy, or reinforces existing plans to spend more on local transport and affordable housing.
Having said this, there were some welcome announcements in the detail, such as the slight uplift in the guidelines for long term infrastructure spending and the increasing focus delivering brownfield development schemes.
Furthermore, a myriad of local schemes were announced, allocated through the Levelling Up Fund or the local transport settlements, which show how the agenda is shifting to the subregional level. ACE will soon publish a new report exploring how to make levelling up a success in these terms.
What was missing?
Rishi Sunak was rightly criticised by the green lobby for not making new big announcements around Net Zero while also cutting Air Passenger Duty. In his defence on this issue, there have been a slew of announcements recently, and the Prime Minister is now leading on this topic leaving very little for the Budget.
Furthermore, the measures around nature recovery includes additional funding and a new requirement for the NIC to consider biodiversity and nature impacts in all its advice. Although modest in the grand scheme of things, it shows the Treasury is getting on board with the nature recovery agenda which I do think will be significant in the long term.
The other major gap was rail where after weeks of lowering of expectations around Northern Powerhouse Rail and the HS2’s eastern leg, nothing specific was announced yesterday. My hunch is that the Integrated Rail Plan, which should give answers to some of these questions, will now be published after COP26. I would love to see a longer term plan in this on how the electrification needed to decarbonise the rail network will be funded and rolled out, but I am not holding my breath.
So, all in all, a low-key Budget for our sector. The focus now will be on delivery where ACE members’ issue solving skills and creativity will be vital as the Government’s partner of choice.
Matthew Farrow is director of policy at the Association for Consultancy and Engineering (ACE).
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