Infrastructure
Osborne announced a £5.5bn capital package and support for long-term private investment to develop the UK's infrastructure, including investment in roads, housing and local infrastructure, regional growth and business, exports, science, and schools and colleges.
Local development
The Government will provide £683m through capital grants and financial transactions to support housing and commercial development, Osborne said. Local infrastructure in England will receive a £474m investment on a recoverable basis. This will include around £60m to support infrastructure in a limited number of Enterprise Zones and around £225m to support delivery of around 50,000 homes by accelerating delivery of large housing sites. Around £190m will be used to de-risk public sector land and enable quicker disposal of surplus sites for new homes and £100m will be used to bring forward public sector sites for development.
UK Guarantees
Osborne confirmed that projects with a capital value of around £10bn have been prequalified as eligible for consideration for the UK Guarantees scheme, under which the Government will provide up to £40bn in guarantees to ensure major infrastructure projects can raise funding. Osborne announced that as the first project under the scheme, the Northern Line extension will receive a guarantee to support £1 billion of Greater London Authority borrowing to finance its construction.
Empty Property Rates exemption
In a bid to promote further private investment, Osborne announced that the Government will exempt all newly built commercial property completed between 1 October 2013 and 30 September 2016 from empty property rates for the first 18 months, up to the state aid limit subject to consultation.
“The burden of empty rates has been an unwelcome fetter on new development for some time now," said Tom Johnson, property law expert at Pinsent Masons, the law firm behind Out-Law.com. "We welcome the statements in the Chancellor’s Autumn Statement announcing a reprieve for new builds completed between 1 October 2013 and 30 September 2016."
“It is promising that the Government has recognised that it must take steps such as these to remove the obstacles to much needed commercial development that will be required to encourage investment and stimulate economic growth."
Heseltine review
Osborne announced a number of measures to implement recommendations on economic growth made by Lord Heseltine in his Government-commissioned 'No Stone Unturned' report which was published in October.
As part of the implementations, Osborne announced £10m of funding per year for Local Enterprise Partnerships (LEPs) to spend on capacity building. Under the plans, each LEP will be able to apply for up to £250,000 additional funding per year to support the development and delivery of their strategic plan. He said that the Government will devolve a greater proportion of growth-related spending on the basis of the LEPs' strategic plans by creating a single funding pot for local areas from April 2015.
"As for unlocking the enabling infrastructure that is often required to kick start developments in our towns and cities, it’s encouraging to see that the LEPs will also be given access to additional funds from 2013 and it is to be hoped these are deployed to full effect,” said Tom Johnson of Pinsent Masons.
The Regional Growth Fund will also receive a funding boost of £350m to provide support for jobs and growth across England. Osborne said the Government will "look to reflect on the successes of the previous rounds" and will confirm how applicants can apply for funding "in due course".
Other recommendations to be implemented include a consultation on requiring regulators to have regard to growth and a 'Focus on Enforcement' review into regulators’ appeals systems.
Road network
The Government will invest £1.5bn in enhancing and improving the UK road network and on reducing congestion to ensure that the road network is fit for the country's future transport needs, Osborne said. £1bn will be invested within this spending review period and includes investment into upgrades of the A1 in the north east and a new link between the A5 and M1 in the east of England.
Consultations
Osborne confirmed that the Government plans to launch a consultation on updated guidance on conducting environmental impact assessments by Budget 2013. It also plans a consultation on raising screening thresholds set out in the Town and Country Planning (Environmental Impact Assessment) Regulations 2011 later in 2013.
“The £5.5 billion is a welcome boost," said Richard Ford, planning expert at Pinsent Masons. "The £1billion for roads is welcome and good news for the key schemes confirmed which are much needed."
"Particularly eye-catching is the £1billion loan and guarantee for the northern line tube extension to help deliver the Vauxhall and Nine Elms Opportunity Area which will help enable Battersea Power Station and other schemes. That has been long pressed for and the decision represents a good bit of arm-twisting by the Mayor of London, the key London Boroughs and the private sector.”
“The extra money for LEPs, ultra fast broadband and the Regional Growth Fund are a welcome boost to the sub-regions and in accordance with the Heseltine Review. The changes to the Empty Homes Rates position will also encourage re-use of empty homes and local authorities are looking at creative ways to promote affordable housing provision by bringing more Empty Homes back into use,” Ford said.
