Spending Review: broad support but big questions

Senior industry figures have given a cautious thumbs-up to Chancellor Rishi Sunak’s statement, and have raised questions over how certain proposals will be delivered.

In his Spending Review announcement, Sunak unveiled a £4bn “levelling-up” fund and confirmed heavily trailed news of a National Infrastructure Bank to be based in the North of England

Graham Wright, partner at EY, said that the £4bn fund raises more questions than it answers: “The government says it is ‘moving away from a fragmented landscape with multiple funding streams’ but the regions will potentially once again find themselves bidding against each other for one pot of money.

“Managed by three government departments and with projects needing approval from the local MP, the approach seems at odds with a broader objective of devolving power and funding decisions.”

Wright continued: “The combination of the creation of a National Infrastructure Bank – created in part to replace European Investment Bank participation – as part of the wider £100bn infrastructure strategy, along with changes to the Green Book to prioritise investment in more deprived regions and in sustainable infrastructure, and the Treasury’s new Northern HQ, will create a significant number of jobs and are certainly good news for the North.”

The focus on infrastructure was unsurprisingly welcomed by Barry White, chief executive of Transport for the North. He said: “The Government pledged an infrastructure revolution, and it’s really promising to see some progress on that coming to fruition. Commitments to creating a UK Infrastructure Bank; spending on rail upgrades and major roads; as well as confirmation of an electric vehicle cash injection, all signal progress in helping build back better and greener.”

White repeated Wright’s warning on the Levelling Up Fund: “How projects are appraised and decided will be crucial. We need to avoid a situation where communities are stuck in a bidding cycle of competition for investment, with decisions still being made by Whitehall rather than locally.”

Also calling for more local empowerment is Chris Cheap, managing director in the regions for Avison Young: “It is obviously welcome news to see the levelling up agenda turn from rhetoric to reality, however the allocation of the funding and the viability analysis of the projects has to be in the hands of those who know them best – therefore meaningful engagement with and empowerment of local leadership across the North West is critical.”

For Stephen Miles, partner in the UK development team at Cushman & Wakefield, the Green Book changes are the key: “It is hoped that the refresh of the Treasury’s Green Book will make it easier to justify investment in such projects, moving away from the emphasis of ‘land value uplift’ which disadvantaged many northern towns and cities in recent investment programmes.”