Phillip Hammond has delivered his first (and the last ever) Autumn Statement as Chancellor of the Exchequer. The Autumn Statement contains some important measures aimed at providing a stimulus to development, particularly in relation to the delivery of housing and, specifically, affordable housing.
The headline is that a new National Productivity Investment Fund (NPIF) has been created: this will provide for £23billion of spending between 2017/18 & 2021/22 in areas such as housing and infrastructure. We focus here on the key housing and infrastructure pledges contained within the Autumn Statement.
The NPIF will support the provision of a new Housing Infrastructure Fund of £2.3billion. This fund will be allocated to local government on a competitive basis and will aim to provide infrastructure to unlock new private house building in areas where housing need is the greatest. The Government’s aspiration is for this fund to deliver up to 100,000 homes.
Mr Hammond also re-iterated the Government’s aim of accelerated construction, and the NPIF will invest £1.7billion to accelerate house building on public sector land in England through partnerships with private sector developers.
The Autumn Statement confirms that the Government will relax restrictions on grant funding to allow providers to deliver a mix of affordable homes. To assist, the NPIF will provide £1.4billion in funding, aimed at delivering 40,000 affordable housing starts by 2020/21.
The Autumn Statement includes confirmation of the Greater London Authority’s affordable housing settlement and that London is to get £3.15billion of national affordable housing funding (43% of the existing budget for England) in order to deliver 90,000 affordable housing starts by 2020/21.
It was initially expected that the Housing White Paper, promised by Communities and Local Government Secretary Sajid Javid and Housing Minister Gavin Barwell in recent weeks, would be released as part of the Autumn Statement, although this expectation had dampened over recent days and the White Paper has not been released.
The White Paper is now expected by the end of the year, and the Autumn Statement confirms that the White Paper will set out a comprehensive package of reform to increase housing supply and halt the decline in housing affordability.
These major funding announcements, coupled with the promise of a comprehensive White Paper and further planning reforms, should inject confidence into the housing sector.
Mr Hammond announced that central Government investment in economic infrastructure will increase from £14billion in 2016/17 to £22billion in 2020/21.
The National Infrastructure Commission (the NIC), which is a non-statutory body established to advise Government on strategic infrastructure needs, has also been set a fiscal remit to set out its recommendations for infrastructure on the assumption that spending on such infrastructure will be between 1% and 1.2% of GDP each year from 2020 to 2050.
Mr Hammond has announced that £1.1billion will be invested in transport networks via the NPIF, with this money going towards relieving congestion and delivering upgrades to local roads and public transport networks.
In rare forays into project specific detail focussed on infrastructure outside of London, Mr Hammond announced £100million investment into the western section of East West Rail, £27million in development funding towards the Oxford to Cambridge Expressway and £5million in development funding for the Midlands Rail Hub.
Mr Hammond also announced that £1billion will be invested in the roll out of full-fibre optic connections and future 5G communications, with £740million coming through the NPIF.
In delivering his first Autumn Statement, Mr Hammond has adopted a different tack to his predecessor George Osborne by preferring high level statements, leaving the detail to the spending departments and avoiding the micro-management approach that Mr Osborne had taken.