UK 2014 Budget boost for housing and infrastructure
By Helen Wright20 March 2014
The UK Government’s 2014 Budget outlines several new investments that have been praised by commentators from the construction industry as a welcome boost for the country’s infrastructure and housing sectors.
UK Chancellor of the Exchequer George Osborne’s budget included a guarantee of up to £270 million (€324 million) to support the Mersey Gateway Bridge project, an extra £200 million (€240 million) to allow local authorities to repair up to 3.2 million potholes following the severe weather, and £140 million (€168 million) for the repair and restoration of flood defences.
The UK’s flood defences suffered damage during the poor weather experienced by the country this winter. The new funds add to the £2.3 billion (€2.8 billion) allocated funding to support flood defences between 2013 and 2015.
In addition, the 2014 Budget established a £500 million (€600 million) Builders Finance Fund, planned to provide loans to developers to unlock 15,000 housing units stalled due to difficulty in accessing finance.
A further £150 million (€180 million) fund is also planned to kick-start the regeneration of large housing estates through repayable loans, while the budget also allowed for £200 million (€240 million) of government support for a new, 15,000 home Garden City at Ebbsfleet in South-East England.
And the Budget also contained extra details about HS2 – the country’s planned new North/South high-speed rail line. Osborne said the government had commissioned HS2 Ltd to develop proposals for accelerating the project and opening the line to Crewe by 2027, six years earlier than planned.
In addition, the developer has been tasked with exploring options for a substantial redevelopment of Euston station, which the Budget described as one of the biggest undeveloped commercial opportunities in central London.
Commentators from across the UK construction industry have broadly welcomed the budget. The Builders Finance fund was welcomed by the Modern Masonry Alliance and the Federation of Master Builders (FMB) as representing a major boost for the country’s housing supply.
And the UK Construction Products Association said the Chancellor’s 2014 Budget backed British manufacturers and builders. Diana Montgomery, chief executive, said, “We are encouraged by the recognition that infrastructure is part of a successful economy.”
However, she added that the existing projects also needed government attention. “Government must focus on delivery of its existing project pipeline and getting spades in the ground, a critical challenge given the recently disappointing ONS figures showing a drop in infrastructure output and new orders.”
A spokesperson for the Mersey Gateway project welcomed the government guarantee for the project.
“This decision clears the way for financial close, (when contracts will be awarded and all finance committed), and we expect to achieve this in the very near future. Once we have completed this, more details of the financial arrangements and funding will be confirmed and announced,” the spokesperson said, adding that preparations were taking place to allow construction work to start in the coming weeks.
And Rob Oliver, chief executive of the Construction Equipment Association said the Budget delivered a better package for business than had been expected. He highlighted plans to double companies’ annual investment allowance to £500,000 (€600,000) until the end of next year.
“This should tempt plant hire companies and contractors to bring forward their spending plans,” Oliver said, adding, “All in all a good week for manufacturing and the construction industry.”