Spring Budget 2017 – Industry Highlights
Chancellor of the Exchequer Philip Hammond presented the Government’s Spring Budget on 8 March, focusing on national productivity, social care, changes to self-employment regulations and business tax rates, as well as investments in infrastructure to boost economic growth.
The £23 billion National Productivity Investment Fund (NPIF), which was announced in the last Autumn Statement, is starting to be allocated, with £300 million committed to science and innovation research, £270 million to researching the disruptive technologies of the future, £16 million to a 5G mobile technology hub and £200 million to the Government’s National 5G Innovation Network.
The Spring Budget, which was Mr Hammond’s first and is to be his last with the Government moving towards a single fiscal event taking place each autumn, also announced fresh investment into a number of sectors.
Read on to discover what public sector pipelines of work await your industry sector.
- Commitments to fund devolved regions, but devolution made up a much less significant part of the Budget than in 2015 or 2016.
- The announcement of a Midlands Engine strategy, and moves towards further devolved powers for London.
- An increase of over £800 million to the Scottish Government for infrastructure projects.
- An increase of over £400 million to the Welsh Government for infrastructure projects.
- An increase of over £250 million to the Northern Ireland Executive for infrastructure projects.
- Local authorities will benefit from a £300 million fund to deliver discretionary relief to target individual cases in their local areas.
- National Productivity Investment Fund (NPIF) to provide £23 billion of infrastructure additional spending, to ensure that the UK’s economy is ‘fit for the future’.
- The NPIF will provide major additional spending in areas that are key to boosting productivity, including:
- Digital Communications
- Research and Development (R&D)
- Infrastructure funding for roads in the Northern Powerhouse and Midlands Engine, as well as a fund to tackle urban congestion; there was also a welcome emphasis on technical skills.
- NPIF will invest £740 million in digital infrastructure by 2020/21 to support the next generation of fast and reliable mobile and broadband communications for consumers and businesses. This includes:
- Creating a new National 5G Innovation Network to trial and demonstrate 5G applications, and for the UK to become a world leader in the next wave of mobile technology and services.
- The first phase will invest up to £16 million in a cutting-edge 5G facility with the technology to run the trials, delivered through cooperation between leading 5G research institutions. A new centre of 5G expertise within government will oversee this programme, working with public and private sector partners. Funding for future trials will be awarded on a competitive basis.
- £200 million for local projects to leverage private sector investment in the Government’s National 5G Innovation Network.
- £250 million to be invested over the next four years, with plans to build the pipeline of high-skilled research talent necessary for a growing and innovative economy. This includes:
- £90 million to provide an additional 1000 PhD places in areas aligned with the Industrial Strategy, 85% of which will be in STEM disciplines with 40% directly helping strengthen collaboration between business and academia through industrial partnerships.
- £160 million to support new fellowships for early and mid-career researchers in areas aligned to the Industrial Strategy.
- £500 million investment in technical education for 16 to 19 year olds with new ‘T-levels’ to be introduced in autumn 2019. Students will be able to choose from 15 different routes such as construction, digital or agriculture; as part of the course, all students will take part in an industry work placement.
The Government will also provide maintenance loans for students doing higher-level technical courses at National Colleges and Institutes of Technology – like those available to university students.
- £210 million will create new fellowships, including programmes to attract top global talent to conduct research in areas such as bioscience and biotechnology, quantum technologies, and satellite and space technology.
- £2 billion for adult social care over the next three years, with the aim of providing high-quality social care to more people to help ease pressure on the NHS.
- £425 million investment in the NHS over the next three years, including:
- £325 million to be invested in a first set of the best local Sustainability and Transformation Plans (STPs) to improve patient services in local regions.
- £100 million to go to A&E departments in 2017/18, to help them manage demand ahead of next winter, and help patients get to primary care faster.
- £216 million to be invested in school maintenance projects.
- £36 billion to be spent on housing and environment in 2017/18.
Health & Social Care:
- £149 billion to be spent in health in 2017/18, with an additional £425 million for investment in the NHS to come over the next three years. This includes:
- £100 million to go towards accident and emergency departments in 2017/18 to help them prepare for winter and provide more on-site GP facilities.
- An additional £2 billion earmarked for adult social care spending over the next three years.
- £37 billion to be spent on transport in 2017/18.
- £690 million to be spent on new local transport projects, with £490 million made available by early autumn 2017.
- This funding is allocated through the National Productivity Investment Fund with the aim of improving congestion on roads and public transport, and includes:
- £220 million to improve congestion points on national roads.
- £90 million going to the North.
- £23 million going to the Midlands.
- Supporting improvements on the A483 corridor in Cheshire and on the Leicester Outer Ring Road.
- More details of individual schemes to be announced by the Department for Transport shortly.
Defence & Security:
- £48 billion to be spent on defence in 2017/18.
Research & Development:
- £4.7 billion from the NPIF spent on R&D, to support the UK’s world-leading research and ensure that the next generation of discoveries are made, developed and commercialised in Britain.
- £102 billion to be spent on education in 2017/18.
- £320 million to fund new free schools and £216 million to be invested in school maintenance.
- Free transport scheme for children from poorer families to go to selective schools.
- £270 million invested to launch the Industrial Strategy Challenge Fund (ISCF) to develop disruptive technologies that have the potential to transform the UK economy. This includes investment on projects such as:
- Leading the world in the development, design and manufacture of batteries that will power the next generation of electric vehicles, helping to tackle air pollution.
- Developing cutting-edge artificial intelligence and robotics systems that will operate in extreme and hazardous environments, including offshore energy, nuclear energy, space and deep mining.
- Accelerating patient access to new drugs and treatments through developing brand-new medicine manufacturing technologies, helping to improve public health.
Oil & Gas:
- A panel of industry experts is to be established to mull how tax can assist sales of North Sea oil and gas fields, with a report of the findings due at the Autumn Budget 2017.
- Small businesses and landlords under the VAT threshold will have an extra year to prepare for Making Tax Digital (MTD).
- Unincorporated businesses (businesses owned privately by one or more people) that have an annual turnover below the VAT registration threshold will have until April 2019 to prepare before MTD becomes mandatory.
- Under MTD, businesses will use digital software to keep tax records and update HMRC quarterly.
- £435 million to support businesses affected by the business rates relief revaluation. This means no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016/17.
- Funding for local authorities will allow them to provide £300 million of discretionary relief to provide help to businesses most affected by the revaluation.
- From April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1000 business rates discount for one year.