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Budget 2017: what you need to know

Philip hammond
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What does Philip Hammond’s first budget as chancellor mean for you, your practice and the wider industry? Here are the AJ’s top takeaways

What, no mention of the housing crisis?

Given last month’s Housing White Paper, perhaps it was too much to expect that the nation’s lack of affordable housing would loom large in the chancellor’s speech too. But the lack of even a cursory mention surprised many. As Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: ‘This is an early missed opportunity for the government to take forward the agenda to tackle our housing crisis it outlined in the recent white paper. We hope the autumn budget goes much further to tackle the obstacles which continue to make genuinely affordable housing inaccessible to millions of people.’

Baby steps to make it easier for parents to return to practice

Hammond used the timing of the budget and its coinciding with International Women’s Day to announce a package of minor measures to help working parents.

Those with three- and four-year-olds will have their free childcare allowance doubled, saving on average £5,000 a year for a full-time working family. The chancellor reiterated prime minister Theresa May’s pledge to introduce a £5 million ‘returnship fund’ to help those who have had a career break.

Manifesto-breaching move to raise National Insurance contributions for self-employed

Despite commitments in the 2015 Conservative election manifesto to have ’no increases in VAT, Income Tax or National Insurance’, Hammond announced that millions of self-employed people (earning over £16,000) will indeed face a 2 per cent hike in National Insurance contributions.

The chancellor said the difference in contributions between those in employment and those in self-employment ‘is no longer justified’. The move was widely described as a ‘stealth tax’.

Midlands Engine – but no real commitment to North

Hammond said a new Midlands Engine strategy – comparable to the Northern Powerhouse drive championed by previous chancellor George Osborne – would be rolled out this week. But there was little else.

Johnny Caddick, managing director at property developer Moda Living, said: ‘The government should have focused more on increasing connectivity between northern cities.

’Initiatives like HS3 can help create the scale needed to make sure the Northern Powerhouse becomes a reality while simultaneously driving productivity and helping unlock new areas for residential development.’

However, a £690 million cash pot was unveiled to help local authorities tackle urban congestion and get local transport networks moving.

Some cash for new schools – but surely not enough?

About £320 million will be made available to build 110 new free schools on top of the 500 already in progress. And, as widely trailed, Hammond said he would provide an additional £216 million over the next three years to improve and refurbish existing school buildings.

The extra cash, however, will only be able to sort out 40 per cent of the schools estate built between 1945 and 1976, which is coming up for replacement or major refurbishment. Effectively a drop in the ocean.

Hello to T-levels – a new way of studying

The chancellor spoke at length about nurturing talent to boost the nation’s productivity. As part of this he flagged up a new technical qualification, the T-level, which would be introduced from autumn 2019. He also said that the number of hours of training for technical students aged 16 to 19 to would increase by more than 50 per cent, and that maintenance grants would be made available to part-time students too. 

Getting driverless cars motoring

Hammond announced a £270 million industrial strategy challenge fund to keep Britain at the forefront of technology. It is aimed at developing driverless cars and robotics, with a further £16 million set aside for a 5G hub which would help a driverless vehicle network.

Comments

George Morgan, associate at Coffey Architects
It’s rather shocking that there wasn’t a single mention of housing in the budget. Nothing to facilitate institutional investment in housing to increase supply; no compensation to housing associations for previous rent cuts slashing their development budgets; and no uplift on the caps on councils’ housing revenue accounts to fund increased council housebuilding – the 1980s collapse in council housebuilding being the main reason for our present shortage.

However, there were some details about devolution of transport that could be helpful to housing supply. For example, the GLA and TfL will be looking at a new way to fund public transport improvements from land value uplift. If this works it could help break the development stalemate across swathes of the Thames Gateway, where housing sites are waiting for public transport, that, itself, is waiting for housing to bring people to pay the fares to pay back the investment.

Jane Duncan, RIBA president
I welcome the chancellor’s moves to increase the prestige and prominence of technical education with the T-Level. These, combined with new apprenticeships should encourage a much broader range of people to consider a career in architecture and the built environment. It’s also encouraging to hear both the prime minister and the chancellor recognise the importance of getting women back into the workplace after they have taken time out to start families. The under-representation of women in the senior ranks of our profession remains a huge challenge that we must overcome if we are to fulfil our economic and creative potential.

While there was some additional funding for new schools and infrastructure, the blunt truth is that we won’t tackle these problems without a more effective use of resources and a greater role for architects and other experts in establishing quality and sustainability in the design and delivery of projects.

With Brexit on the horizon, I want to see more action from the government to address some of the biggest barriers to making our society more prosperous – including lacking infrastructure and the inequities of the housing crisis. 

Richard Laming, head of economics at planning consultancy Turley
While many of the measures announced today’s budget are progressive, they are likely to deliver results over a long time scale. We feel that this longer-term approach has come at the expense of more immediate and pressing concerns at home. One need only look to the dysfunctional housing market for an example of a domestic issue which, if unaddressed, will impinge on the UK’s competitiveness as a place to do business. 

Support to address the broken housing market, to assist in the regeneration of our towns and cities and measures to address regional economic inequalities are all absent from the budget. The chancellor did not once mention the government’s Housing White Paper, nor its Industrial Strategy Green Paper. This rather suggests that the housing and industrial challenges that the country faces are not considered important enough to feature in this budget. We would contest this – they are of the utmost importance to the country’s future prosperity. 

Despite the rhetoric about creating an economy which works for all, the government has again failed to realise the important differences that exist between different parts of the country and the challenges that exist in creating a more balanced pattern of economic growth and investment.

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