As the Conservatives gear up for a general election, they’ll be pleased with the headlines following the Spring Budget, firmly focused on the 27 million workers who will benefit from cuts to National Insurance.

The Chancellor has set his sights on painting the Conservatives as a party for the people – increasing the VAT threshold for small businesses and the earnings threshold for child benefits.

Headlines fiscal changes aside, what does the budget look like for the built environment? Will it help create a generation of new homeowners across several levelled-up towns and cities, or, has it put planning at the bottom of the priority list?

Levelling Up

As has become the usual talking point in most Conservative economic statements since 2022, levelling up played a central role in Hunt’s budget. The government promised £242 million investment for Barking Riverside and Canary Wharf, transforming London’s financial district into a leading new hub for life sciences in Europe, alongside the creation of nearly 8,000 homes. There are further promises for investment right across the UK with plans to invest in Liverpool, Sheffield and Blackpool.

Local governments will be disappointed the statement did not address ways to ease the severe financial pressures faced by councils nationally. Instead, the Chancellor announced new devolution agreements for Buckinghamshire and Surrey, with the hope local leaders will be empowered to improve their communities. It begs the question of how much help this will be when councils are facing huge shortfalls.

Helen Goral, our Midlands & North Director, shares her thoughts on what the Chancellor’s budget means for local authorities:

“Devolving further power to local leaders is a positive step forward in recognising who is best placed to promote local economic growth, however levelling up measures announced in today’s budget fall short of the financial investment required to help positively shape our towns and the communities who live in them.”

Housing

The Chancellor promised first-time buyers that “building homes for young people” is a priority for Sunak’s government. Talk of a £20 million Community-led housing scheme that supports local communities to deliver is promising, but it isn’t exactly clear how the Conservatives plan to achieve this with calls to “build, build, build” noticeably absent.

Meanwhile, the rumours that had been leaked prior to the statement – an increase to the Lifetime ISA cap for first-time buyers and the government’s 99% mortgage scheme – both hit the cutting room floor.

The reduction of property capital gains tax from 28% to 24% will be welcomed by many across the country – but will of course be targeted towards the Conservative electorate. This is likely to drive more stock to the market over the next few months – but it is still not enough to solve the housing crisis.

Jonathan Simpson, Director of London, shares his thoughts on what the budget means for housing in London:

“The Budget had two major housing issues that affect London. Firstly, the announcement of £242 in to Barking Riverside and Canary Wharf generating 8,000 new homes. More detail on this will come but it will help transform Canary Wharf as more life science companies move in. There was also a new tax on landlords who have short term lets. Many local authorities in London have called for greater regulation of the holiday lets market due the reduction of properties in the long-term letting market. The devil will be in the detail on this – but the Leader of Westminster City Council said today in the Evening Standard that the Government would need address loopholes for any additional tax to work.”

Life sciences

Investment in science and innovation over the past few years has proven to be a driver of economic growth, explaining the decision to dedicate record levels of investment to the sector. The government has set aside £360 million for UK research and development (R&D) and manufacturing across the life sciences, automotive and aerospace sectors. A further £45 million allowance will be put forward to accelerate medical research into common diseases like cancer, dementia and epilepsy.

How does planning fit into this? The funding announced to transform Canary Wharf will look to convert existing office stock into laboratory spaces, with current demand outstripping supply. The impact this programme will have on the future of the financial district is one to keep an eye on.

There is also additional investment from AstraZeneca to build a new vaccine manufacturing hub in Liverpool and to expand their geographical footprint in Cambridge.

Inflation

It was unsurprising that, despite falling faster than expected, the UK remains above the 2% inflation target. This will continue to have a huge impact on projects and organisations operating within the built environment. This means the sector will continue to face high constructions and material costs, delays to projects and increased pressure on developers and contractors.

Although there are some reasons to be cheerful, the Budget has certainly fallen short of industry expectations. We’ll just have to wait and see whether predictions for a May election come to fruition…