A ‘short term budget’ but with much good news for building - Glenigan
24th March 2015

The Chancellor has, predictably, focussed on short-term political priorities rather than long term investment needs, according to Glenigan Economics Director Allan Wilén, though the forecast faster growth in the economy and household incomes should bolster private housing and non-residential construction.

He said “Inevitably 50 days before the general election, the Chancellor’s attention has been on short-term. However, there has been no big pre-election give away, with the government choosing to use better than expected public revenues to tackle the deficit more quickly than previously planned.

 “The Chancellor’s Budget proposals are centred upon supporting and encouraging private sector investment and economic growth. This includes his ‘surprise’ move to create a Help to Buy ISA that will include a government contribution of up to £3,000 for savers to help bolster their deposit. Additional support for increasing new housing supply is being provided though the creation of the first 20 housing zones outside London, with the potential to deliver 34,000 new homes.

Elsewhere, he continued, direct government support is limited. An expected £13 billion of planned departmental cuts during the next Parliament indicates that publicly funded construction work would remain under pressure under a future Conservative government.

“While funding support has been pledged for a few projects such as the Brent Cross regeneration scheme, the Croxely rail link and the Swansea Bay tidal lagoon, the Chancellor’s focus was more on the government’s enabling role. This includes the promised release of public sector land with capacity for up to 150,000 new homes between 2015 and 2020.

"Additional planning powers are promised for the London Mayor to accelerate new housing provision, while pilot schemes in Greater Manchester and Cambridge and Peterborough will incentivise local authorities to support economic growth by allowing them to retain any additional growth in business rates.”

Further expert comment and analysis on which aspects of the Chancellor’s announcement will have an impact on the UK construction industry can be found in a special Budget 2015 report, produced by Glenigan’s economics team, here 
www.Glenigan.com