Last week’s £80 billion spending cut put the UK on the hard road to economic recovery. Merlin Fulcher investigates the impact on architecture
The government axed £80 billion of public spending last week, in a bid to wipe out the UK’s debt. Chancellor George Osborne sliced a fifth off departmental finance budgets, with affordable housing and local government budgets severely hit. Schools took a bashing as did culture, with CABE taking a deep cut.
What follows is an indepth breakdown by sector, including industry commentary, of how these cuts will affect the architectural profession.
Source: Jonas Lencer
A reduced amount of £15.8 billion will be spent on school-building projects over the next four years. This is just 60 per cent of the money needed to fund the 600 BSF schools that survived Michael Gove’s axe in July (AJ 08.07.10). As a result the Department for Education last Friday (22 October) demanded local authorities to reduce spending on these ‘saved’ projects by 40 per cent. The James Review is expected to make further recommendations on cost cuts.
Lee Bennett, partner at Sheppard Robson, said: ‘Clients are seeking clarification on whether this government chainsaw is used to pollard or to fell. Schools that have not yet reached financial close are the likely target and finding a 40 per cent saving in construction will require a total rethink.’
Paul Monaghan, partner at Alford Hall Monaghan Morris said: ‘Most projects are down to the bone already, you’d have to scrape paint off the walls to save money.’
The affordable housing budget has been sliced in half to £4.4 billion over the next four years, and as much as half of this is to be spent on already-committed schemes. The government plans to build 150,000 new affordable homes but the scope of its delivery body, the Homes and Communities Agency, will be ‘much smaller’.
Christian Gibbon, senior manager at Pollard Thomas Edwards Architects, said: ‘It could have been worse because
in tandem with restricted funding is the allowance for Registered Social Landlords (RSLs) to raise rents – that could make a difference as long as RSLs can get funding from the banks.’
Stuart Dudley, managing director of SJD Architects, said: ‘We’ve one project at the moment where we can’t find a housing association to partner with us. There’s no-one who could take it on at the moment because they’re too scared to invest.’
The government’s 26 per cent reduction to its local government grant could scupper a number of frameworks involving smaller practices. The Communities and Local Government capital spending budget will also shrink by 74 per cent over the next four years, and nine Regional Development Agencies are to be wound up before March 2012. The London Development Agency’s (LDA) entire funding has been pulled, leaving scores of on-hold projects at risk, as well as agency subsidiary Design for London, which employs 20 architects.
Parts of LDA are expected to merge into the Greater London Authority’s planning directorate, but in the meantime the London Mayor must battle the Treasury for a settlement to cover the £50 million cost of LDA’s already-committed projects.
Elizabeth Adams, director of Adams Sutherland Architects said: ‘We’ve been worried for some time and this is obviously the bottom line. It has been really great for small practices to engage properly with the public sector and to be given opportunities to engage with it through bodies like the LDA. That feels vulnerable now.’
Fiona Scott, founding partner of Gort Scott Architects said: ‘Some of the public realm projects the LDA delivers cost the public sector less than a small house extension or a few years of rent for a single large family. But the lasting benefits they can bring, for a wide cross-section of society [are] not solely driven by profit-making motives.’
Mark Brearley, director of Design for London, said: ‘Our day-to-day work rolls forward. This is an unsettling moment, for sure, but we are a team of optimists and so we continue looking forward with enthusiasm for what’s possible.’
The government’s capital spending is set to be £2 billion higher than set out in June’s emergency budget, however total capital spending (40 per cent of which is construction) will fall from £51.6 billion to £40.2 billion in 2014-15. In June, the government axed £11 billion worth of capital projects, but now plans an investment of £200 billion in infrastructure, which will be 80 per cent funded by the industry.
The Department of Culture, Media and Sport’s funding has been cut from £1.4 billion to £1.1 billion and its administrative budget has been reduced by 40 per cent. English Heritage’s budget was cut 32 per cent, but the body says it will fight to protect ‘front-line services’.
Loyd Grossman, chair of the Heritage Alliance, said: ‘We fear that the immediate and longer-term impact of a 32 per cent cut […] will lead to irreversible deterioration of our heritage.’
Third-party right of appeal has been dropped from the planning bill, and simplification of the Building Regs is on the horizon.
Peter Caplehorn, technical director at Scott Brownrigg, said: ‘The coalition’s principles of localism and a one-in-one-out policy on regulation may be more difficult to manage when we start to consider the low-carbon agenda. Look out for a blending of regulations.’
High-profile schemes saved include:
Herzog & de Meuron’s Tate Modern Extension, Rogers Stirk Harbour + Partners’ British Museum extension, Foreign Office Architects’ Birmingham New Street (left), Crossrail (various architects), PLP Architecture and HOK’s £520m UKCMRI in Camden (top), Grimshaw’s £400m Reading Station, High Speed Two (Terry Farrell + Partners, Atkins, Glenn Howells) and new hospitals at St Helier, West Cumberland and Royal Oldham.