BUDGET 2020 | Sunak pledges £600bn for UK infrastructure
In the first post-Brexit budget, Chancellor Rishi Sunak pointed to infrastructure investment as a chance to “level up opportunity and share prosperity” across the UK, however the bulk of detail on the Government’s planned spending in the North West is expected in the coming months.
Sunak on Wednesday promised to to raise infrastructure spending to its highest in decades, tripling the average net investment made over the last 40 years into rail and road, affordable housing, broadband and research to around £600bn over the period 2020-2025.
The document that is supposed to detail these investments, the National Infrastructure Strategy, was expected to be released with today’s budget but will now be published in April or May, as “a once-in-a-generation transformation of the UK’s economic infrastructure”, Sunak told the House of Commons.
However, the Budget did reveal some fresh spending plans for devolved regions, as well as updating on progress allocating funding from existing pots such as the Transforming Cities Fund.
The Chancellor revealed that £4.2bn would become available in 2022 as a five-year funding settlement for Combined Authorities such as Manchester and Liverpool, to be agreed with central Government and based on transport investment plans put forward by Mayors.
Discussions are due to begin with Greater Manchester and Liverpool City Region “in the coming months”, with schemes such as tram-train pilots in Greater Manchester cited as eligible for the funding. Sunak pledged to move forward with the first phase of the long-awaited Northern Powerhouse rail project, although the Budget document did not provide details.
A confirmation of £1bn of awards from the Transforming Cities Fund was also included in the Budget, including £40m to Preston, which includes £25m for the proposed Cottom Parkway train station.
A £50m fund to assist in train station accessibility was also announced for 12 stations across the country, including Walkden in Greater Manchester.
Meanwhile, as part of the Government’s Second Road Investment Strategy, £27bn has been allocated to major road projects for the period 2020-2025. Projects include the M60 Simister Island in Manchester, and a focus on connecting communities in East Lancashire and West Yorkshire.
In addition, the nation’s annual pothole fund was doubled to £500m.
There are also 15 local road upgrades due to be delivered within the budget period, according to the Budget 2020 document.
The Chancellor allocated £5.2bn for flood defences over the next six years in response to the extensive flooding seen across the country in recent months, and outlined a £200m place-based coastal resilience programme. This would would be targeted at 25 areas that could bid for funding for the pot to improve their resilience to flooding and coastal erosion.
The planned investments in roads, railways and other infrastructure are part of Sunak’s strategy to “get Britain building” and create a “thriving private sector”, as the lynchpins of future economic growth.
National gross domestic product growth is expected to rise to 1.8% in 2021, from 1.1% this year and 1.4% in 2019, according to the Treasury’s Office for Budget Responsibility’s latest forecasts, set out in the Budget.
The OBR anticipates a subsequent drop in GDP growth to 1.5% in 2022 and 1.3% in 2023 and 1.4% in 2024.
Dr Walter Boettcher, head of research & economics at real estate consultancy Colliers International, said: “The impressive set of investment announcements, digging in as it does into government coffers, needs to be coupled with engagement with the commercial property sector so as to tap into the even deeper coffers of domestic and international investment funds.”
Andy Burnham, Mayor of Greater Manchester, said: “Today’s budget has made a start on levelling up the North but in truth it is only a start. Ministers have made a lot of promises to people here over recent months but what has been announced today does not live up to the rhetoric.
“The Government will need to up its game in the Spending Review later this year if, as the Chancellor might say, they are really going to get the Northern Powerhouse done.”
Barry White, chief executive of Transport for the North, added: “We are disappointed that Northern Powerhouse Rail continues to be talked about only in terms of the Manchester to Leeds leg, and we remain clear that this transformative rail project must be delivered in full.”
And Steve Rotheram, Metro Mayor of the Liverpool City Region, said: “After months of lobbying we were successful in securing a share of £4.2bn for transport to build the London-style transport integrated system we need and a share of £400m for development on brownfield land…”