Budget 2017: Transport and infrastructure get productivity cash boost


The chancellor has announced that he is extending and expanding the National Productivity Investment Fund (NPIF), as part of a range of measures in the Budget to boost transport and infrastructure.

In addition, more than £1bn of discounted lending will be available to councils to fund high-value infrastructure projects.

Philip Hammond said the Government was ‘continuing to invest in the skills and infrastructure that will support the jobs of the future [and] building the homes that will make good on our promise to the next generation’.


But he told MPs that the Office for Budget Responsibility had downgraded its forecasts for productivity growth, business investment, and GDP growth, admitting that ‘regrettably our productivity performance continues to disappoint'.

Referring to the five-year, £23bn NPIF fund he launched in last year’s Autumn Statement, he told MPs: ‘Today I can announce that I will extend this fund for a further year and expand it to over £31bn.’

As part of this, Mr Hammond also announced a further £2.7bn ‘to more than double the Housing Infrastructure fund’. This takes the total in the fund to £5bn.

He said the Government was completing the road and rail infrastructure to support the one million new homes in the Oxford-Milton-Keynes-Cambridge corridor that the National Infrastructure Commission called for last week, ‘to create a dynamic new growth corridor for the 21st Century’.

He also announced £30m to trial new solutions on the TransPennine route to improve mobile and digital connectivity on trains.

Mr Hammond confirmed the £1.7bn Transforming Cities Fund launched by prime minister Theresa May this week, which he said would back the Northern Powerhouse and Midlands Engine and elected mayors across UK.

Half the funding, which also comes under the NPIF, will be provided on a per capita basis to the six areas that have elected metro mayors, ‘to give them the firepower to deliver on local transport priorities’, with the remainder shared between other cities under a competitive bidding process.

On Monday, Ms May announced that the first £250m would be handed to the West Midlands Combined Authority (WMCA), led by mayor Andy Street, to fund an extension of the region’s light-rail Metro system.

Now £74m will go to Cambridgeshire and Peterborough, £243m to Greater Manchester, £134m to Liverpool City Region, £80m to the West of England, and £59m to Tees Valley.

In today’s speech, Mr Hammond also announced a second devolution deal with the WMCA.

He also pledged to fund the replacement of the 40-year-old rolling stock on the Tyne and Wear Metro with modern energy-efficient trains at a total cost of £337m, and to invest over £500m in a range of initiatives from Artificial Intelligence, to 5G and full fibre broadband.

Mr Hammond also announced the launch of ‘an historic partnership’ between government, the CBI and the TUC – to set the strategic direction for a National Retraining Scheme, whose first priority will be to boost digital skills and to support expansion of the construction sector.

The chancellor added that he is ‘continuing to work with TfL on the funding and financing of Crossrail 2’. These talks have been ongoing for several months.

Register now for full access

Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

comments powered by Disqus