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Budget good for infrastructure but not ‘all singing all dancing’

Chancellor George Osborne made a commitment to delivering on infrastructure projects that would drive the economy and announced a £130M expansion of the Northern Hub rail programme in today’s budget.

The government has promised to take an active role in making sure 40 key infrastructure projects are delivered efficiently and on time with priority given to those most critical for economic growth. These key projects are identified in the National Infrastructure Plan 2011 include Crossrail, Thameslink, Mersey Gateway Bridge, and the New Lower Thames Crossing.

Osborne also announced the £130M expansion of the Northern Hub rail scheme to improve links between Manchester and Sheffield, Rochdale, Halifax, Bradford, Bolton, Preston and Blackpool. These have been welcomed by the Association for Consultancy and Engineering (ACE).

ACE chief executive Nelson Ogunshakin OBE, said: “The return to the economy of these schemes could prove crucial as the government shows its commitment to get the UK growing. It has listened to industry and recognises that infrastructure is a key driver of growth and employment. We must now see these announcements translate into delivery on the ground.”

Civil Engineering Contractors Association director of external affairs Alasdair Reisner also welcomed news of the Northern Hub expansion but added: “We were not expecting too much from it. There’s a few sort of nice positive things. But realistically, by comparison with the autumn statement, this was never going to be an all-singing all-dancing story for infrastructure.”

The budget also included a £150M pot of funding for large scale projects in core cities through tax incremental financing. And an earn-back model that could release up to £1.2bn of funding for infrastructure will be piloted in Manchester.

New enterprise zones for Scotland and Wales were also announced plus a £70M pot of funding for development in London.

Osborne promised modern infrastructure and business friendly planning rules and said the National Planning Policy Framework due out next Tuesday would reduce red tape. The framework will replace more than 1,200 pages of planning guidance with a more concise 52 page document.

The Carbon Reduction Commitment, which will hit the energy, waste and manufacturing sectors most heavily, may be replaced with an alternative tax. Osborne added that Combined Heat and Energy Plants would be exempt.

The Government plans to publish a strategy in the autumn for gas generation and said that gas-fired electricity generation would continue to play a major role in UK energy supplies well into the future. It also plans to introduce a package of tax measures to secure billions of pounds for additional oil and gas investment in the UK Continental Shelf.

On energy, Institution of Civil Engineers (ICE) director General Nick Baveystock, said: “Government rightly acknowledges the importance of energy security in the future, so steps to maximise the potential of our domestic resources are welcome.

“However we must ultimately shift our dependence from fossil fuel generation, so to have a reasonable chance in delivering what the country needs, these steps must be supported with market reforms to make investment in new low carbon supplies, like offshore wind, more attractive and commercially viable.”

UK waste management industry body, the Environmental Services Association, also welcomed the chancellor’s commitment to infrastructure and said the waste industry had the potential to invest £10bn in new infrastructure over the coming years.

But director of policy Matthew Farrow also called for specific ‘green infrastructure allowances’ to incentivise investment. He said: “The loss of industrial building allowances has made some potential waste management investment less economically viable.”

More budget detail

The Government has pledged to take forward many of Alan Cook’s recommendations for the roads, including developing a roads strategy and setting a renewed focus on the level of performance expected from the Highways Agency.

The Northern Hub rail project will also increase capacity on the Hope Valley line between Manchester and Sheffield to double the number of fast trains running.

A shortlist of options to increase capacity and performance on the A14 between Huntingdon and Cambridge have been developed, including widening some sections. The Government is also considering options to shift more freight from road to rail.

Work will continue with the Welsh Government to consider electrification of the Welsh Valley lines.

As part of the £1.7bn local transport project investment package, the Government is supporting the Bexhill to Hastings link road to help economic regeneration.

Ten cities have been selected to receive super fast broadband as part of the £100M fund announced in the autumn statemen. These are: Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle.

Mobile coverage will be extended to 60,000 rural homes along at least ten key roads by 2015. The Government will consider whether to directly intervene to improve mobile coverage for rail passengers.

The Government plans to explore the case of using the Planning Act 2008 to streamline the planning process for the proposed river crossings in East London such as the Silvertown project.

It also wants to TfL and the Mayor of London to consider further investments to improve rail journeys into and within London and an announcement on this will be made this summer.

A further £15M has been given to TfL to improve cycle safety including provision for cyclists at busy road junctions under TfL’s cycle safety junction review.

A1 Elkesley works are likely to start towards the end of the financial year and be completed by 2014/15


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