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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.

Autumn Statement Procurement Top Tips

Autumn Statement

The Chancellor of the Exchequer’s recent Autumn Statement offered new routes to leveraging business growth. Here, BiP Solutions journalist Julie Shennan gives 5 top tips for procurement actions to optimise your Autumn Statement opportunities.

With £23 billion of additional government spending pledged in Chancellor of the Exchequer Philip Hammond’s recent Autumn Statement via the new National Productivity Investment Fund, fresh pipelines of work have been outlined in areas such as infrastructure, housing, transport, defence, exports, R&D, oil and gas, communications and media.

Whatever your business sector, the Autumn Statement contains information that you can leverage to cut costs and open up new business opportunities. Here are 5 top tips for post-Autumn Statement good procurement practice.

1. Browse Business Breaks

Every year the Chancellor of the Exchequer gives business financial breaks via the likes of Corporation Tax cuts and business rates relief. These breaks often come with caveats that make them applicable to some businesses but not others; however, it is worth checking if your business qualifies so you can adjust your budget.

Also worth noting is that with each business break there usually comes a time frame for its implementation or a time limit on its duration. For example, in his Autumn Statement 2016 Mr Hammond pledged to cut Corporation Tax to 17% by 2020, suggesting that it may drop incrementally over the next few years.

2. Find Funding

Likewise, the Chancellor’s Autumn Statement often announces funding opportunities for UK business growth, to stimulate things like innovation, local economies and overseas trade. This year the Chancellor pledged £400 million through the British Business Bank to invest in innovative small businesses with potential for growth.

Now that these funding opportunities have been announced, businesses that qualify and are interested should waste no time in contacting the British Business Bank to start their application. Fortune favours the brave, and awarding bodies will not knock on doors offering funding.

3. Utilise U-Turns

Just as suppliers should be diligent in checking the recent Autumn Statement for relevant new announcements, they should also check it for any U-turns on business breaks or funding pledged in previous years.

Each year brings new circumstances and challenges that can force policy U-turns, not least when there has been a change of government. Yet one supplier’s curse is often another supplier’s blessing as the scrapping of relief or funding in one area can lead to that assistance being rechanneled into another.

4. Pursue Pipelines

Arguably the most valuable business information in this year’s Autumn Statement is to be found in the new pipelines of work announced by the Chancellor. These pipelines vary from the rather open ‘£800 million to the Scottish Government for infrastructure projects’ to the more specific ‘£7.6 million for urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire’.

Now that the Autumn Statement has been announced, suppliers should research it for pipelines within their sectors and geographical areas of operation, bearing in mind that some sector pipelines – such as those in construction – have a trickle-down effect into others. For instance, a pipeline for building repairs might also bring security services opportunities to guard the building while the repairs are made.

After identifying a potential future pipeline of work, suppliers should then scan the procurement horizon for this work being put out to tender. This can be done by using a contracts finder service, checking national or local authority contract portals, monitoring news stories, or attending council meetings and networking events.

For best practice guidance on finding contracts, read The Ultimate Guide to Winning Government Contracts, Chapter 4.

5. Contact Contractors

Every now and then an Autumn Statement or Budget goes one step further, not only outlining new pipelines of work but also announcing the Tier 1 contractors who will be running them. For instance, in his Autumn Statement 2016 the Chancellor detailed that £850,000 would be awarded to a Royal Society of the Arts project to promote cultural education in schools. Once the Tier 1 contractor’s name is divulged then suppliers should strike up pre-tender conversations, to establish the scope of sub-contracts available.

Best practice guidance on pre-tender networking can be found in The Ultimate Guide to Winning Government Contracts, Chapter 9.

For more information on government opportunities, visit the BiP Solutions Resources page.

Autumn Statement Industry Highlights

Autumn Statement Industry Highlights

On 23 November, Chancellor of the Exchequer Philip Hammond announced the Government’s 2016 Autumn Statement, pledging £23 billion of additional spending via the new National Productivity Investment Fund (NPIF).

Among the sectors receiving fresh investment are infrastructure, housing, transport, exports, defence and security, R&D, oil and gas, communications, culture and media.

Read on to discover what public sector pipelines of work await your industry sector.

Infrastructure

  • National Productivity Investment Fund (NPIF) to provide £23 billion of additional spending, ensuring the UK’s economy is fit for the future.
  • National Productivity Investment Fund will provide major additional spending in areas that are key to boosting productivity: transport, digital communications, research and development (R&D), and housing.
  • 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.

Housing

  • £2.3 billion for a new Housing Infrastructure Fund for projects such as roads and water connections that will support the construction of up to 100,000 new homes in the areas where they are needed most.
  • £1.4 billion to provide 40,000 new affordable homes, including some for shared ownership and some for affordable rent.
  • £1.7 billion to speed up the construction of new homes on public sector land.

Transport

As part of the National Productivity Investment Fund, transport infrastructure will include:

  • £1.1 billion to reduce congestion and upgrade local roads and public transport
  • £220 million to tackle road safety and congestion on Highways England roads
  • £27 million to develop an expressway connecting Oxford and Cambridge
  • £450 million will also be spent on trialling railway digital signalling technology which will expand capacity and improve reliability

£390 million investment in future transport technology including driverless cars, renewable fuels and energy efficient transport. This will include:

  • £100 million investment in testing infrastructure for driverless cars
  • £150 million to provide at least 550 new electric and hydrogen buses and to support taxis to become zero emission
  • £80 million to install more charge-points for ultra-low emission vehicles
  • A two-year 100% first year allowance for companies who install electric charge-points, coming into effect immediately‎. This allows companies to deduct the cost of the charge-point from their pre-tax profits in that year

Exports

  • Doubling UK Export Finance capacity.

Defence & Security

  • Protecting the defence budget (no reduction in Budget 2016 pledge).
  • Protecting the overseas aid budget (no reduction in Budget 2016 pledge).
  • Over £102 million of LIBOR banking fines to support Armed Forces and Emergency Services charities and other related good causes: over the next 4 years support will go to more than 100 projects supporting Armed Forces personnel, their families and veterans; Emergency Service personnel; children’s hospitals, air ambulances and emergency responders; and museums and memorials.

Research & Development

  • £2 billion more per year in research and development (R&D) funding by 2020-21.
  • Increase in R&D funding for universities and businesses with R&D for areas like robotics, artificial intelligence and industrial biotechnology.

Oil & Gas

  • Carbon Price Support capped until 2020.
  • Business rates reduction package worth £6.7 billion.

Communications

  • £1 billion to invest in full-fibre broadband and trialling 5G networks.
  • Investment to support the private sector to roll out more full-fibre broadband by 2020-21.
  • Funding will also support trials of 5G mobile communications.
  • From April 2017, the Government will also provide a new 100% business rates relief for new full-fibre infrastructure for a 5-year period.

Culture

  • Over £10 million to support culture and heritage projects across the UK:
  • £7.6 million will cover urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire
  • £850,000 for a Royal Society of the Arts pilot to promote cultural education in schools
  • £1.6 million to help complete Studio 144, an arts complex in Southampton, including an auditorium, studio, and gallery
  • £1 million towards the development of a new creative media centre in Plymouth
  • New museums and galleries tax relief will be expanded to include permanent exhibitions, set at 20% for non-touring exhibitions and 25% for touring exhibitions. The relief will be capped at £500,000 of qualifying expenditure per exhibition.

For more information on government spending plans, keep reading the BiP Solutions blog.