Philip Hammond’s budget speech left much to be desired when it came to detailed long-term investment in infrastructure, says AECOM’s John Hicks.
In its pre-budget letter to the chancellor, the CBI quoted last November’s CBI/AECOM infrastructure survey to demonstrate that over two-thirds of firms are not confident that road and rail infrastructure will improve in this parliament. Whilst Mr Hammond’s commitment of £420m to repair potholes and bridges will no doubt be a popular sticking plaster, I’m not sure that the budget will change the minds of many of those surveyed.
Yes, there were lots of individual spending promises, but Mr Hammond’s speech left much to be desired when it came to detailed long-term investment in infrastructure, although clearly the £1.6bn investment into the modern industrial strategy didn’t go unnoticed.
We felt it was a budget that could at first be accused of lacking positive headlines for the industry, but on closer inspection and when pieced together, could be extremely fruitful. For example, the combination of boosting the Transforming Cities Fund to £2.4bn, £500m more for the Housing Infrastructure Fund and a move to simplifying the process of changing commercial properties to residential could over time lead to progression in our towns and cities.
The chancellor, whilst acknowledging the role of private finance, put to bed the politics of PFI/PF2. We must look to the National Infrastructure Strategy and maybe the detail of the Spending Review to see how monies will flow to enable capital projects that are not entirely exchequer financed.
It was also good to see Northern Powerhouse Rail and Midlands Engine back on the agenda, and the inclusion of support to the East-West rail corridor was hopefully an acknowledgement that the government is committed to the new infrastructure spine that is planned for the country.
With regards to Brexit, it was no surprise that the chancellor steered away from the subject for much of his budget speech, meaning that perhaps much of his real spending plans will be revealed in next year’s Strategic Spending Review or indeed his proposed additional spring fiscal event.
That said, we did think that Mr Hammond missed the opportunity to show some support for employers, in particular an offer for incentives to those organisations who wish to cover the cost of their EU nationals applying for ‘settled status’. Unless hidden in the detail or left to the behest of individual departments, it would have been the perfect platform to give a nod to this expense, demonstrating the government’s commitment to our talented EU workforce and providing reassurance to individuals and businesses alike.
John Hicks is director and head of government and public at AECOM.