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Spring Statement 2019

Red briefcase

The Chancellor has today delivered his Spring Statement. Against the background of continued uncertainty around the UK’s departure from the EU, what will probably be seen as the main message of the Statement is that the Chancellor’s so-called ‘war chest’ of around £26.6bn is earmarked for preparations for a ‘no-deal Brexit.’

If the possibility of a ‘no deal’ exit is removed with the EU’s agreement, it will free up a significant amount of money to be spent in areas such as healthcare and education. However, as our last update noted, ‘no deal’ remains very much a possibility, in spite of this week’s parliamentary vote.

If a Brexit deal is agreed, the Chancellor has committed to a full, three-year spending review before Parliament’s summer recess, ahead of the next budget.

We look at a few other key announcements from the Statement below.

Housing & construction

The Government has made up to £3bn available to housing associations in England, through the Affordable Homes Guarantee Scheme, to support delivery of around 30,000 affordable homes.

In addition, £717m is earmarked for constructing 37,000 homes in London, the Oxford-Cambridge Arc and Cheshire.

The Chancellor also said that a National Infrastructure Strategy will be published along with the Autumn Budget.

For more on the implications of the Statement for the construction industry, see the latest Construction Online update.

Local areas

Alongside the above-mentioned areas for housing development, the Statement announces up to £260m for the Borderlands region, which comprises which comprises Dumfries and Galloway, the Scottish Borders, Northumberland, Cumbria and Carlisle City. There will also be £60m of investment in ten cities and local areas across England, from the ‘Transforming Cities Fund.’

Technology & innovation

While the major news in terms of technology may be around the Government’s planned reviews of digital advertising and the dominance of ‘tech giants’, there were announcements in other areas too, with over £200m earmarked for science and innovation projects. Major funding has been granted for state-of-the-art laser technology projects in Oxfordshire, genomics research and industry in Cambridge, and £79m for a supercomputer to be developed in Edinburgh.

Skills & jobs

The last Budget included updates to apprenticeship reforms. These mean that, from 1st April, employers will see the co-investment rate they pay reduced from 10% to 5%, while levy-paying employers are “able to share more levy funds across their supply chains”, with the maximum amount rising from 10% to 25%.

The Chancellor also reiterated that the previously-announced £37bn National Productivity Investment Fund, covering areas such as roads, the rail network and full-fibre networks, will help boost productivity.

Sustainability & environment

Sustainability and efficiency are one of the major areas of focus in the Statement, with the Chancellor pledging to increase the amount of ‘green gas’ in the National Grid. Additionally, from 2025, all new homes will be ‘future-proofed’ with low carbon heating, as opposed to fossil fuel-based heating systems.

The Statement also announced a ‘call for evidence’ specifically focusing on the benefits of energy efficiency and carbon reduction for SMEs. The results of this will lead to SME-specific investment commitments.

£4bn boost for Scottish infrastructure

Scottishinfra

The Scottish Government’s 2016-17 Draft Budget has pledged around £4 billion infrastructure investment over the next year. This investment will be spent on house building, transport and digital links, among other projects. Here, BiP journalist Julie Shennan talks with DTL Chief Executive of UK Training Chris Wood about the opportunities and challenges this could bring.

The 2016-17 Draft Budget has pledged:

  • £1 billion investment in roads and transport projects, including the electrification of the Edinburgh-Glasgow rail line and continuing work on the Aberdeen Western Peripheral Route.
  • Around £690 million investment in housing supply including an increase of around £90 million in affordable housing supply year on year – the first step in the Scottish Government’s commitment to provide 50,000 new affordable homes by 2020-21
  • Further investment in total of more than £130 million for Scotland’s digital strategy, to give 95 per cent of premises in Scotland access to next generation broadband by 2017 and enhance mobile coverage.
  • Completion of the Queensferry Crossing.

These infrastructure plans remain to be confirmed in the Scottish Government Spending Review, later in the year. This publication has been delayed by the late release of the UK Spending Review, which was published on 27 Nov 2015.

Scottish Ministers continue to discuss the fiscal framework that will underpin future Scottish Block Grants from the UK as part of the Scotland Bill. Any agreement will have a material impact on the powers and resources available to Scotland.

Scottish Infrastructure Secretary Keith Brown said: “This is a Budget to improve infrastructure and increase house building by a total of some £4 billion, and as such it as a Budget to invest in protect and extend our economic recovery.

“We have long placed considerable emphasis on public sector investment in infrastructure to stimulate economic recovery and that is what has driven much of the post-recession growth in Scotland. This Budget supports that continued growth through improving infrastructure and investing in housing to ensure all Scots can benefit from these opportunities.”

The Scottish Draft Budget infrastructure pledge comes as good news to Scottish-based training specialist DTL, whose customers include major construction, energy and water companies.

DTL Chief Executive, Chris Wood said: “Such pledges of investment are always welcome.

“For Scotland, in particular, these are essential to help the country thrive in an ever more competitive global environment.”

But Mr Wood said the pledge would need to be backed with investment in industrial training.

He said: “Not only should pledges be turned into actions, but greater consideration should also be made as to how infrastructure improvements will actually be delivered.

“There remains a significant skills gap across Scotland and the wider UK. So it would be even more reassuring to see the Scottish Government make similar pledges to help businesses provide appropriate training, apprenticeships and the skills necessary to deliver these ambitious projects on time and to a high standard.”

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