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2013 Autumn Statement: construction implications
Practical Law UK Legal Update 7-550-9787 (Approx. 6 pages)
2013 Autumn Statement: construction implications
| Published on 05 Dec 2013 • England, Wales |
On 5 December 2013, the Chancellor of the Exchequer, George Osborne, gave his Autumn Statement, setting out the government's economic and fiscal plans to build a stronger economy. (Free access)
Speedread
On 5 December 2013, the Chancellor of the Exchequer, George Osborne, gave his "fiscally-neutral" Autumn Statement, setting out the government's economic and fiscal plans.
According to the executive summary to the Autumn Statement, the government's long-term economic plan has "rebuilt the UK's financial credibility, ensured economic stability, and helped provide the foundations for the recovery that is now gaining momentum". The Autumn Statement sets out further action to deliver a "responsible recovery".
Some of the detail usually included in the Autumn Statement had already been announced, for example, the government had previously published the National Infrastructure Plan 2013 (NIP 2013) (which was supplemented by the National Infrastructure Pipeline 2013).
The Autumn Statement recognises that economic recovery in the construction sector has been slow, with growth of just 1.7% recorded in the third quarter of this year. Also, unlike last year (when the government announced a £5.5 billion capital package, including a £1.5 billion investment in roads), the Autumn Statement contains few new initiatives that may impact directly on the construction and engineering sectors. Therefore, the reaction to the Autumn Statement is likely to be subdued.
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Defined terms
- Autumn Statement: HM Treasury: Autumn Statement 2013 (5 December 2013).
- Insurance growth action plan: HM Treasury: The UK insurance growth action plan (December 2013).
- National Networks NPS: National Networks National Policy Statement.
2013 Autumn Statement
On 5 December 2013, the Chancellor of the Exchequer, George Osborne, gave his "fiscally-neutral" Autumn Statement, setting out the government's economic and fiscal plans.
According to the executive summary to the Autumn Statement, the government's long-term economic plan has "rebuilt the UK's financial credibility, ensured economic stability, and helped provide the foundations for the recovery that is now gaining momentum". The Autumn Statement sets out further action to deliver a "responsible recovery".
Some of the detail usually included in the Autumn Statement had already been announced, for example, the government had previously published the National Infrastructure Plan 2013 (NIP 2013) (which was supplemented by the National Infrastructure Pipeline 2013).
The Autumn Statement recognises that economic recovery in the construction sector has been slow, with growth of just 1.7% recorded in the third quarter of this year. Also, unlike last year (when the government announced a £5.5 billion capital package, including a £1.5 billion investment in roads), the Autumn Statement contains few new initiatives that may impact directly on the construction and engineering sectors. Therefore, the reaction to the Autumn Statement is likely to be subdued.
Housing
The 2012 Autumn Statement had made a number of announcements on housing, both to enable new housing stock to be built (120,000 new homes were promised) and to give greater access to funding for first-time buyers (through help to buy schemes).
The 2013 Autumn Statement continues the government's commitment to "increasing the supply of housing and supporting those who aspire to own their own homes". Measures include:
- Addressing delays in the planning process.
- Unlocking new large housing sites through a £1 billion, six-year programme to fund infrastructure.
- Increasing the funding available for new affordable homes.
- Supporting Right to Buy by introducing Right to Buy agents to help buyers complete their home purchase and providing £100 million to establish a fund to increase Right to Buy sales, by improving applicants’ access to mortgage finance.
(Autumn Statement, paragraphs 1.223-238.)
For more information, see Legal update, 2013 Autumn Statement: property implications.
Infrastructure strategy
The Autumn Statement notes:
"Infrastructure is the backbone of the economy, vital to growth and generating jobs now and in the future. The government is committed to providing the infrastructure necessary to address a legacy of historical under-investment and for Britain to compete in the global race."
The Autumn Statement records that the government has already delivered significant infrastructure improvements, including 36 transport projects worth over £1.7 billion that have been completed. In addition, it explains that capital investment on 99% of the 27 road, rail and flood defence schemes identified in the 2010 and 2011 Autumn Statements are on track, with two completed as planned and a further 38 individual projects in construction (Autumn Statement, paragraphs 1.213-215).
The government's vision for UK infrastructure investment and its approach to delivering its key infrastructure objectives is contained in the National Infrastructure Plans. As we have previously reported, the government has published NIP 2013 (see Legal update, National Infrastructure Plan 2013: construction and engineering aspects).
NIP 2013 is a lengthy document that tracks infrastructure investment since 2010 and sets out the government's long term infrastructure plans for the UK. In doing so, it follows on from the first national infrastructure plan, which was published in 2010 and updated in the following years. For information on previous plans, see Practice note, National Infrastructure Plans: construction, environment and property implications.
NIP 2013 is supplemented by the National Infrastructure Pipeline 2013. This is a spreadsheet setting out potential infrastructure investment to 2020 and beyond. It includes projects with a capital value of £50 million or more, together with programmes of investment (where smaller projects are grouped together) worth £50 million or more.
In addition, NIP 2013 flags specific government initiatives that construction and engineering practitioners may find interesting. These include:
- Establishing a specialist planning court to avoid delay in the planning process for major infrastructure projects (Autumn Statement, paragraph 1.220).
- The announcement that six major insurers will invest a total of £25 billion in UK infrastructure over the next five years. For information on the insurance initiative, see the government's separate UK insurance growth action plan. (Autumn Statement, paragraph 1.222.)
For more information on NIP 2013's approach to regulated utilities (such as rail, energy, water and aviation), see Legal update, National Infrastructure Plan 2013: implications for regulated utilities.
National Networks NPS
Alongside NIP 2013, the government launched a consultation on a draft National Networks National Policy Statement (National Networks NPS) (Autumn Statement, paragraph 2.195).
The National Networks NPS covers government policy on the development of nationally significant infrastructure projects on the road and rail networks, as well as strategic rail freight interchanges in England. For more information, see Legal update, Government consults on draft National Policy Statement for the National Road and Rail Networks).
NSIP planning review
Alongside NIP 2013, the government launched a review of the Nationally Significant Infrastructure Planning (NSIP) regime. The review will focus on shortening the pre-application phase and streamlining the consent process (Autumn Statement, paragraph 2.192).
In addition, where possible, the government will ensure that the "top 40" infrastructure investments have the option to use the NSIP regime by having regard to the "top 40" designation, when making considerations under section 35 of the Planning Act 2008 (Autumn Statement, paragraph 2.194).
For more information, see Practice note, Planning Act 2008: planning applications for nationally significant infrastructure projects.
SMEs
In the 2012 Autumn Statement, the government announced a number of measures aimed at small and medium-sized enterprises (SMEs) and mid-sized businesses, to help build strong supply chains. This included a Business Bank (with £1 billion of funding) to ensure businesses, particularly small businesses, could access finance and support.
The 2013 Autumn Statement confirms the Business Bank has launched and is deploying its funding. It also sets out a range of other measures to ensure improved access to finance for SMEs (Autumn Statement, paragraphs 1.169-175).
Comment
The Autumn Statement recognises that economic recovery in the construction sector has been slow, with growth of just 1.7% recorded in the third quarter of this year. Also, unlike last year (when the government announced a £5.5 billion capital package, including a £1.5 billion investment in roads), the Autumn Statement contains few new initiatives that may impact directly on the construction and engineering sectors. Therefore, the reaction to the Autumn Statement is likely to be subdued.
Further reading
For more information on the:
- Implications for the property industry, see Legal update, 2013 Autumn Statement: property implications.
- Main environmental announcements, see Legal update, 2013 Autumn Statement: environmental implications.
- Key business tax announcements, see Legal update, 2013 Autumn Statement: business tax implications.
- The 2013 Budget, see Legal update, 2013 Budget: construction industry implications.
For information on other aspects of the Autumn Statement, see PLC Coverage: 2013 Autumn Statement.