Chancellor of the exchequer Rishi Sunak will announce his long-awaited spending review this Wednesday which promises a raft of measures that should please the construction sector, if the leaks in the Sunday papers are anything to go by.
Sunak is widely predicted to announce an increase in government spending on day-to-day public services and the launch of a new National Infrastructure Bank to direct billions of pounds into major capital projects as part of the government’s much vaunted ‘levelling up’ agenda. The spending review is also expected to include the long-delayed National Infrastructure Strategy and will signal a recasting of the Treasury’s ’green book’, the rules used to allocate funding to major projects, which has been widely criticised for being too weighted to London and the south east, which discriminates against the north.
Hannah Vickers, chief executive of the Association for Consultancy and Engineering, commenting on expected announcements in the National Infrastructure Strategy in relation to the ‘green book’, said: “It appears that the chancellor has recognised that the rules currently favour the south east. However, levelling-up requires a cultural change to investment appraisal and we will need empowered local leaders, as well as a series of new projects and investments, if we are to see a true change in approach.”
Commenting on the opportunity to ‘level up’ and the plans for Northern Powerhouse Rail, Vickers said: “If politicians are serious about levelling-up, then delivering Northern Powerhouse Rail, a truly transformative project that will link millions of people coast-to-coast to new opportunity, has to be a priority. It is not only the glue which will bind the region together into a single economic unit, but a demonstrable commitment from UK government to levelling-up.”
Vickers also welcomed the establishment of a new National Infrastructure Bank. “With the UK no longer a member of the European Investment Bank, now is the perfect moment to establish an equivalent which, rather than working on a project-by-project basis, works strategically to unlock the regeneration of deprived towns and cities,” she said. “Leveraging the private sector at scale, it could, along with reform of the ‘green book’, play a key role in unlocking opportunity across the country,” said Vickers.
Many in the construction sector have been asking when the government will announce more details of its ‘Project Speed’ plans and whether it will name the list of projects it intends to fast track and build at pace. As much as Sunak’s announcement this Wednesday will be keenly awaited by construction businesses, it’s unlikely that he will add further details of Project Speed just yet. Thanks to the pandemic, this spending review is only for a year and will not cover the usual three-year framework and, under increasing financial pressures, it’s likely that the government will hold off on announcing details of major projects for the time being.
Whether Rishi Sunak’s announcements on Wednesday will be enough for construction leaders remains to be seen.