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Budget 2016: the industry reacts

Houses of Parliament
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The industry has reacted to the chancellor George Osborne’s 2016 Budget statement

Budget 2016: at a glance 

Ben Derbyshire, managing partner, HTA

’I would be very concerned should the announcement on SDLT increase for large landlords impacted the recent surge in Build to Rent at scale. This is only just beginning to take off after years of uncertainty and now is not a time to introduce new disincentives for schemes that promise to add significant numbers to housing supply, and quickly too. The Tories don’t want to promote private rent because of their love affair with the property owning democracy. But we will all benefit if this new source of supply does pick up speed. 

’£115 million for rough sleepers will help those suffering on our streets, no doubt. But if we had kept up public investment in bricks and mortar over the years this might not have been such a pressing necessity. I continue to worry that we are not doing nearly enough to enable people on low incomes to live affordably and close to employment opportunities. Rough sleepers are the visible tip of an iceberg. The bulk you cannot see is made up of low and middle income groups leaving cities, and London especially, to live elsewhere. 

’Our mixed communities are what has made UK cities, and the capital in particular, safe and popular places to be and to invest in. Driving these groups away kills the goose that laid the golden egg. Osborne needs to recognise that its an economic as well as a social argument.

The more devolution to city regions, the better

’I’d add that the more devolution to city regions, the better. Measures to create new mayoralties and increase the capacity for local property tax and spend will enable cities to cater for their various and very individual circumstances. I have come to the conclusion that there is no such thing as an effective national housing policy because markets vary so widely from place to place. The future lies in local placemaking initiatives that will enable towns and cities to compete for jobs and labour with improved housing offers. 

‘And the Housing Forum has long promoted the idea of urban extensions rather than garden cities (often proposed in poorly selected locations) because this is generally a much better use of existing investment in infrastructure. So the offer of Government backing and expertise for Garden Suburbs is one we would endorse. Helpfully, this also suggests a more relaxed approach to the green belt issue than we have seen hitherto.’

John Hicks, director and head of government and public, Aecom

’Osborne declared this a Conservative Budget. And conservative it was. The threat of a potential Brexit possibly cast a cloud of uncertainty over proceedings. Additional money for flood defences was positive news. While commitments to HS3 and Crossrail 2 are welcome, the risk is this will be tantamount to rhetoric unless the pace of delivery is accelerated. The ongoing silence around delivery is becoming deafening. 

’Against the backdrop of a further £3.5bn of efficiency savings, local authorities and public services providers may struggle with regional organisational reform, such as new powers for criminal justice for the likes of Manchester. The drive for all schools to achieve academy status by 2022 also represents a major challenge. All eyes will be on the imminent education whitepaper. 

’Continued commitment to the Northern Powerhouse is welcome but funding will remain a challenge. Foreign direct investment will be needed to supplement the public purse.

‘The Budget was sprinkled with small measures and giveaways to grab headlines. While continued deterioration in productivity was highlighted, it was surprising this theme was not further explored. Unchecked, this could jeopardise the legacy for future generations that the Budget promised.’

Tom Follett, ResPublica policy and projects officer for devolution

’The devolution revolution showed no signs of slowing down in Budget 2016, with new Metro-Mayors announced, groundbreaking devolution of criminal justice and deprivation funds, and single city-regional investment funds for infrastructure and adult skills. However, new reliefs on business rates have the potential to hit councils hard once business rates are devolved and the specifics of this need to be urgently clarified.’

Edward Douglas, senior policy and projects officer, ResPublica

’Support for savers is welcome, but will of course serve to further fuel demand in the housing market. The Budget will disappoint some hoping for more to be done to address supply-side issues, but there are important announcements on bringing more brownfield sites and public sector land into residential development. This is an excellent opportunity for more practical support to be offered to small developers to accelerate development. The Government should work with local authorities to earmark smaller public sector sites to SME builders.

’The move to a more zonal planning approach is also very welcome and is something we called for in our Devo Home report last year. But if this approach is to deliver the housing we need and build the places we want, it is crucial that local communities are more directly involved in the planning process.’

Melanie Leech, chief executive, British Property Federation

’We welcome the suggestion of more frequent business rates revaluations, which we have long advocated. Frequent revaluations maintain fairness for ratepayers, who should expect to be taxed in proportion to the economic benefit that they derive from their property. We are glad that it looks like the government is finally taking this recommendation on board.

‘The Government’s decision to not include an exemption for investors who are purchasing large portfolios of properties for rent is extremely disappointing, and deals a huge blow to the build to rent sector. This is going to be a significant deterrent to the institutional investment currently poised to settle in the purpose-built rented sector, which has the opportunity to deliver a significant number of new, quality affordable homes.’

We cannot afford to lose momentum in the battle to beat the housing crisis

Brian Berry, chief executive, Federation of Master Builders

’The Government has set itself a target of a million new homes by 2020. That is rightly ambitious, but the continuing gap between what’s being built and what needs to be built makes hitting that target more difficult by the day. Official statistics show that annual housing completions in England totalled just over 140,000 in 2015, a long way short of the 200,000 homes we need every year to hit one million. We are nearly 12 months into the current Parliament and the Government is already falling well behind on its targets. We recognise that the Government is working on a number of fronts to speed up the planning process and intervene to support first time buyers, and some of the measures in today’s Budget are welcome steps forward. Yet these announcements are limited in scope and won’t signal the step change that we need to see. We cannot afford to lose momentum in the battle to beat the housing crisis.’ 

Tony Kearns, operations director for rail at WSP Parsons Brinckerhoff

’The Chancellor’s backing of HS3 and Crossrail 2 is fantastic news. This commitment to the project, alongside other major railway investments nationwide, gives the engineering sector the confidence to recruit in preparation and develop the skills the industry needs to deliver these ambitious schemes. We now need the education sector to play a role in encouraging more young people into engineering to help us produce more high quality rail engineers if we’re going to fulfil these development projects, which are needed to modernise our railway infrastructure. Initiatives like the HS2 Rail Academy in Doncaster are playing a part in addressing this issue, but companies like WSP Parsons Brinckerhoff, which have expertise in this field, also have a key role to play in inspiring and cultivating the next generation of home-grown engineers. We’ve hired more than 50 staff to our rail team since September last year, and backing for these schemes will play an important role in recruiting as well as retaining this talent.’

Nick Leeming, chairman, Jackson-Stops & Staff

’The UK is in desperate need of a housing policy which caters for the long-term, reflecting the future needs of a growing population and changing demand for property type and tenure, which looks beyond the next Parliamentary period. We are also in desperate need of more homes. Today’s Budget was a prime opportunity to outline a progressive policy but unfortunately housing did not take centre stage – which is very disappointing. We need more incentives, and easier processes, for small and medium-sized housebuilders to get building. The construction industry in this country saw a significant slump after the economic downturn, with many industry leaders taking the opportunity to step down. Those skills have therefore been lost and successive governments have introduced few incentives to build them back up.’

The UK is in desperate need of a housing policy which caters for the long-term

Julie Hirigoyen, chief executive of the UK Green Building Council 

’The emphasis in today’s Budget is on energy taxation at the expense of carbon pricing – in a so-called attempt to ‘protect businesses’. Yet our membership demonstrates the willingness of business to take action on climate change, not for altruistic reasons but because it is now a commercial imperative to do so.

’While we support the Chancellor’s desire to streamline the business energy tax landscape, this must not come at the expense of ambition. Effective regulatory drivers and reporting frameworks can reduce the burden on businesses, cut their energy costs, and ensure their long-term survival.

’For a Budget that is aimed at putting the next generation first, some of the content seems remarkably short-termist.’

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