The chancellor outlined a Budget against what he described as a 'dangerous cocktail' of risks in the global economy and while transport and infrastructure have advanced, the mood in the sector appears somewhat apprehensive.
Much of the national press coverage for the Budget has focused on George Osborne’s missed economic targets, the downgraded growth figures and increased borrowing.
Headline writers at the Times, which supports the sugar tax, came some way to summing up the general feeling with the line ‘Osborne sugars the pill’, while News International’s other standard bearer, The Sun, appears less inclined towards sweet-tooth-based taxation, and went with the equally expressive but more pithy, Fizzy Rascal.
In the transport and infrastructure sector, many expressed a sense of disappointment that while on the face of it gains appear to have been made, there was lack of true acceleration to major plans and the recurring issue of revenue funding for maintenance.
Simon Topp, director of marketing and international business at asset management software experts, Yotta, said the big infrastructure announcements ‘primarily relate to new capital spending’, with the Crossrail 2 and High Speed 3 rail projects both being given the green light.
‘While these initiatives are positive, they don’t address the problem of improving or protecting our existing infrastructure. In fact, they effectively make that problem even more challenging,’ he said.
He linked this point to predictions of ‘another challenging year’ for councils that have to protect ‘already limited budgets’, asking: ‘If the Government is continuing to cut revenue budgets, how will they maintain this new infrastructure over the long-term?’
Simon Parker, director of the New Local Government Network think tank, also raised concerns about local funding: 'The government promised stable, long-term funding for councils, but the Budget announcements will only add to the sector's confusion. George Osborne promised further cuts for 2019 and knocked a huge hole in business rate income without spelling out how councils will be compensated.'
These concerns have already been taken up by Clive Betts MP, chair of the Communities and Local Government (CLG) Committee, who has written to communities secretary, Greg Clark, to confirm that 'local authorities will be compensated in full for the loss of income as a result of the Budget’s business rates measures and that no local councils will be worse off as a result'.
Howard Robinson, chief executive of the Road Surface Treatments Association, was even more blunt stating: ‘Behind the headlines…is an inability to understand that access to high-profile infrastructure projects is via a poorly maintained, potholed local road network.
‘Local highway authorities simply do not have the funding resources to carry out both necessary emergency repairs and planned long-term maintenance. Against this, the chancellor has announced the allocation of a derisory £50m Pothole Action Fund for England in 2016-17.’
Ed Cox, director of IPPR North, echoed the concerns: ‘We welcome the “green light” that the chancellor has given to major transport schemes in the North of England but in truth he has only committed to further feasibility studies. The announcements will heighten expectations though that government will ultimately commit the fresh billions required to finally see some spades in the ground.
‘And transport investment has to be for a real purpose. Beyond a Northern Transport Strategy we must develop a Great North Plan to align transport, energy, housing and other key drivers of economic growth into a coherent strategy for the North – like in most European regions.'
John Hicks, director and head of Government and Public, at infrastructure firm AECOM, also issued a note of caution: ‘While commitments to HS3 and Crossrail 2 are welcome, the risk is this will be tantamount to rhetoric unless the pace of delivery is accelerated. The ongoing silence around delivery is becoming deafening.
‘The Budget was sprinkled with small measures and giveaways to grab headlines. While continued deterioration in productivity was highlighted, it was surprising this theme was not further explored. Unchecked, this could jeopardise the legacy for future generations that the Budget promised.’
Nick Roberts, Atkins’ chief executive officer for UK & Europe, was more upbeat, stating: ‘The National Infrastructure Commission was set up to take a long term and objective view of our infrastructure needs. The chancellor’s agreement to take forward key recommendations such as HS3, the Trans-Pennine tunnel, the expansion of capacity on the M62 and Crossrail 2 shows that the system works.'
However he added: 'The creation of new and improved infrastructure is the means to the end, not the end itself, so the focus needs to be on delivering these schemes quickly in order to start generating the economic benefits we need now.’
The County Councils Network (CCN) also seemed pleased with the progress made on devolution and the boost this could offer to local infrastructure.
Cllr Paul Carter, CCN chairman, said: ‘Some real progress has been made, with substantial deals empowering the historic counties of Lincolnshire, Cambridgeshire, Suffolk and Norfolk. Such deals will see billions of pounds of infrastructure investment for these areas, and transport, skills and growth decisions brought closer to the people and businesses they affect.'
The Local Government Association (LGA) welcomed extra funding for flood defences but raised concerns over the amount of funding allocated and the lack of local control.
Cllr Peter Box, environment spokesman at the LGA, said: ‘Government funding has been important in enabling local authorities and their communities to recover from the winter’s flooding havoc and the additional £700m by 2020/21 is another significant step in the right direction. However, councils will almost certainly need more financial help from the Government as the full cost of the winter’s horrendous flooding damage emerges.
‘Crucially, new flood defence funding must be devolved by the Government to local areas, with councils working with communities and businesses to ensure money is directed towards projects that best reflect local needs. Councils know their local areas and are best placed to help families get back on their feet.’
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