2016 Budget: key announcements on housing, transport and infrastructure
From £1.4 billion being set aside to deliver 40,000 new affordable homes, to the launch of a £2.3 billion housing infrastructure fund, the 2016 Budget focuses on delivering a higher level of productivity through investment in innovation, with housing, transport and infrastructure being identified as key areas that will benefit from this investment.
Let’s take a look at the key announcements:
As one of four areas targeted by the new National Productivity Investment Fund (NPIF), housing has been dubbed ‘critical’ for improving UK’s productivity.
Providing £23 billion of spending between 2017 and 2022, the biggest affordable house building programme since the 1970s will be launched to halt the decline in housing affordability.
The NPIF will fund:
- A £1.7 billion investment to speed up house building on public sector land through partnerships with private sector developers.
- A new £2.3 billion Housing Infrastructure Fund, targeted at unlocking new private house building in areas where need is greatest, and delivering up to 100,000 new homes.
- £1.4 billion to deliver 40,000 new affordable homes by 2020-2021, as well as a relaxation of restrictions on grant funding to allow providers to deliver a mixture of homes for affordable rent and low cost ownership.
The government has also confirmed the Greater London Authority’s (GLA) affordable housing settlement will receive £3.5 billion to deliver 90,000 affordable homes by 2020-2021.
Right to Buy
Having piloted the Right to Buy scheme with five housing associations so far, the government intends to fund a large-scale regional pilot of the scheme for housing association tenants in 2017-2018. Up to 3,000 tenants will be able to buy their own home with the scheme’s discounts.
Having announced its continued support for home ownership through Help to Buy, from 6 April 2017 the government will introduce a new Lifetime ISA which can be used to save for retirement or to buy a first home.
Adults under the age of 40 will be able to open a new Lifetime ISA and contribute up to £4,000 in each tax year. They will receive a 25% bonus from the government at the end of the tax year on every pound they put in before their 50th birthday.
As one of the four keys areas targeted by the NPIF, the government has set out a number of measures aims at relieving congestion and delivering upgrades on local roads and public transport networks, with £1.1 billion of funding by 2020-2021. £220 million will address traffic pinch points on strategic roads.
The government confirmed that construction of Phase 1 of High Speed 2 will start next year, and that it looks forward to receiving a business case for Crossrail 2.
Other announcements included:
- A £5 million investment in the development of the Midlands Rail Hub, a programme of rail upgrades in and around central Birmingham that could provide up to 10 additional trains per hour.
- £450 million being spent trialling digital signalling technology, so as to expand capacity and improve reliability of service.
- Around £80 million to be used to accelerate the roll out of smart ticketing.
In its Northern Powerhouse Strategy the government sets out the steps it intends to take to address key barriers to productivity faced by the regions.
The government has also announced a number of regional devolution measures which will impact other areas. These include:
- The award £1.8 billion to LEPs across England through a third round of Growth Deals. This funding of local infrastructure aims to improve transport connections, unlock house building, boost skills and enhance digital connectivity.
- Consulting on lending local authorities up to £1 billion at a new local infrastructure rate of gilts + 60 basis points for three years to support infrastructure projects that are high value for money.
- The exploration of further devolution of powers to London.