In an otherwise unexciting Autumn Statement, there was some good news for the infrastructure sector.

Chancellor Philip Hammond prioritised high-value investment in infrastructure and innovation to raise Britain’s productivity.

As many had anticipated, the Chancellor avoided listing specific projects, focusing rather on high-level spending priorities. Highlights include:

  • more funding for affordable housing,
  • the creation of a £23bn productivity fund, and
  • extra spending on transport infrastructure.

Affordable Housing

  • Creation of a new £2.3bn Housing Infrastructure Fund for up to 100,00 new homes in areas of high demand, with a further £1.4bn for constructing an additional 40,000 affordable homes
  • Government will prioritise unlocking more land for housing and will relax restrictions on government grants to allow for a wider range of housing types
  • A Housing White Paper is to be delivered by the Communities Secretary on the current housing situation


Housing associations will welcome the Housing Infrastructure Fund and the boost it will give to housing developments and associated spending, such as roads.

£1.4bn for affordable homes will go towards rectifying the supply/demand issue in areas such as London, and will add to the existing £4.7bn currently being spent on affordable housing.

£23bn Productivity Fund

  • Creation of a £23bn productivity fund to be spent on innovation and infrastructure over the next five years
  • Infrastructure investment to rise to between 1-1.2% of GDP from 2020
  • National Infrastructure Commission (NIC) to make recommendations on the future infrastructure needs of the country within the fiscal boundaries set by government
  • £110m of funding for East West Rail
  • Commitment to deliver the new Oxford to Cambridge Expressway as recommended by the NIC to create a “transformational tech corridor”


The Chancellor emphasised the need for spending on productivity to ensure that Britain doesn’t lag behind the US, Germany, France and other counterparts.

“Economically productive infrastructure directly benefits business. But families too rely on roads, rail and telecoms – and especially housing.”

It remains to be seen what recommendations NIC will make and where this spending will go. This Statement placed a lot of importance of digital infrastructure and the need to invest but remained light on detailed commitments.

Extra spending on Transport

  • £1.1bn on English local networks
  • £200m for traffic pinch-points on strategic roads
  • £450m to trial digital signalling on trains to “expand capacity and improve reliability”
  • £390m for low-emissions vehicles
  • Department for Transport to continue with Transport for the North to develop detailed options for Northern Powerhouse Rail
  • Programme of major roads schemes in the North to get go-ahead


The government is continuing to invest in major rail projects, but on roads it is focusing extra spending “where small investments can offer big wins.”

Northern Powerhouse plans got a nod, as did traffic and signalling problems which should all prove popular.
Construction work on High Speed 2 is set to commence in 2017, and future phases of both High Speed 2 and Cross Rail 2 are being developed.

Other infrastructure highlights

  • Allocation of £1.8bn from the Local Growth Fund to the English regions:
    • £556m to Local Enterprise Partnerships (LEPs) in the North of England
    • £542m to LEPs the Midland and East of England
    • £683m LEPs in the South West, South East and London
  • Strategy to address productivity barriers in the Northern Powerhouse to be published
  • £1bn for broadband and investment in 5G
  • Project to be delivered through PF2 are to be announced early next year.
  • UK Guarantees scheme to be extended until at least 2026
  • The government is also considering lending (at gilt + 60bps) direct to local authorities to support infrastructure projects thought to represent high value for money

Overall Assessment:

This Autumn Statement has delivered a positive boost to UK infrastructure but as ever, it will take years for the impact of most of these measures to be felt and we eagerly await details of the specific projects which will benefit from government backing.

As predicted, this Statement concentrated on technology and improving Britain’s roads and railways but did not, as some speculated, announce the next wave of priority schools. The Autumn Statement documents released post-speech included a pledge to “develop a new pipeline of projects that are suitable for delivery through the PF2 scheme.” This list of projects is due to be set out in early 2017.

Digital infrastructure, housing and innovation have been the main focus of this Autumn Statement. In the next few months it should become clearer where the increased infrastructure investment will land and when it will be felt on the ground.

Co-authored by Maria Hayden, trainee solicitor.