As reported on Building.co.uk – the Chancellor, Rishi Sunak, made a number of statements in his drive to stimulate the recovery from covid-19 that will impact the construction sector in yesterday’s spending review.
These included increased commitments for housebuilding, delivering on net zero, the introduction of a new UK infrastructure bank, and details about the government’s school and hospital building programme.
Some of the key announcements impacting the construction sector include:
Building safety funding programme
An additional £30m is to be provided to assist in the delivery of the new building safety regime, taking resource funding to at least £70m in 2021-22. This includes funding for a new building safety regulator to oversee a more stringent regime for higher-risk buildings. It also reconfirmed £1.6bn to help finance the removal of unsafe cladding from high rise buildings.
National Homebuilding Fund
It was announced that the National Home Building Fund (NHBF) will have initial funding of £7.1bn over the next four years and that it will aim to unlock the development of up to 860,000 homes. £4.8bn of this is capital grant funding for: land remediation, infrastructure investment, land assembly and delivery of the brownfield fund, which was promised in last year’s budget. An additional £100m is for non-mayoral combined authorities in 2021-22 to support both housing delivery and regeneration. Also included is £2.2bn of new loan finance to support housebuilders across the country and it is expected that additional funding for the NHBF will be confirmed at the next spending review.
Promise to build 500 schools and 40 new hospitals
As promised earlier this year the government reaffirmed its commitment to build (or rebuild) 500 schools, with a focus on modern methods of construction, across the UK over the next next five years alough no significant information on the funding or timeline of the project was provided. Some detail was however provided about the government’s £3.7bn health infrastructure programme (HIP), which promises to build 40 new hospitals over the next decade. It was stated that an initial £600m would be spent in 2021-22, with £600m, £900m and £1.7bn being spent in each of the three subsequent years respectively. It was also confirmed that £1.7bn of funding would be provided until 2024-25 to upgrade and improve existing health infrastructure.
£4bn levelling up fund
A new cross-departmental fund for England will invest in a broad range of high value local projects up to £20m, or more by exception, including bypasses and other local road schemes, bus lanes, railway station upgrades, regenerating eyesores, upgrading town centres and community infrastructure, and local arts and culture.
It will be open to all local areas in England and prioritise bids to drive growth and regeneration in places in need, those facing particular challenges and areas that have received less government investment in recent years. The review makes available up to £600m in 2021-22.
New UK infrastructure bank
The new facility, which will be headquartered in the north of England, will come into operation from this coming spring. Given the end of the UK’s transition period to its exit with the EU there had been concerns around whether the UK would still have access to the European Infrastructure Bank, which helps bankroll a huge number of UK infrastructure projects. The UK version has been set up to help meet that need.
Further details regarding the spending review and its impact on the construction sector can be viewed here.