黑洞社区

In the opening minutes of his Budget speech on Wednesday, chancellor George Osborne promised to be 鈥渂old in delivering infrastructure鈥�, and 鈥渂old in building the northern powerhouse鈥�. In actuality, however, by far the most ambitious 鈥� and unexpected 鈥� announcement was not in either of these areas, but on the introduction of a national compulsory living wage.

The living wage - of 拢9 an hour by 2020 - is a major step forward in tackling the gulf between income and living costs among those in low paid jobs. Of course for businesses, including those in construction, there will inevitably be some work needed on how to meet this raised pay level. This is particularly the case for large firms, including some labour-only subcontractors, which may find that Osborne鈥檚 suggestion that cuts to corporation tax will offset the raised salary costs fails to balance out quite so neatly.

But even when it came to measures that will most directly impact on the built environment, the Budget鈥檚 take on infrastructure investment was overshadowed by the implications of policies in two other areas.

The first, and most worrying, is the imposition of an annual 1% reduction in rents paid by social housing tenants in England, which will take place for four years from 2016.

There was precious little detail behind the government鈥檚 repeated rhetoric pledging infrastructure upgrades

The announcement is likely to undermine the ability of housing associations to invest in the development of more affordable housing, with the cut to associations鈥� income potentially sabotaging their ability to secure loans for development. With the affordable housing sector already struggling to come anywhere close to meeting demand thanks to cuts to capital funding, the latest overhaul looks set to create even more problems.

The second announcement with large potential significance for construction is the government鈥檚 pledge to drive creation of a further 3 million apprenticeships with a levy on large employers. The further boost to apprenticeships, and the issue鈥檚 continued presence at the heart of the government鈥檚 policy agenda, will be welcomed by the industry. However, as 黑洞社区 went to press it was unclear whether this levy would apply on top of the levy construction companies already pay to the CITB - raising questions about how the commitment will be met in practice and the cost to employers of doing so.

So what of infrastructure? The biggest single headline on the subject from Osborne鈥檚 speech was the launch of a national fund for England鈥檚 strategic roads, paid for out of vehicle excise duties. This move, which, unusually for the government, ties the taxes raised from users directly to the investment in their services, will be greatly welcomed by both those businesses which are heavy road users and the civils companies involved in road construction.

But aside from that, there was precious little detail behind the government鈥檚 repeated rhetoric pledging infrastructure upgrades. This is particularly disappointing given recent large-scale setbacks for the sector in the form of delays to Network Rail鈥檚 investment programme, and confirmation that there will be an ominously lengthy wait before the government responds to the Airports Commission鈥檚 backing of a third runway for Heathrow.

Most specifically, the fact that the repeated desire to create a northern powerhouse has - on the evidence of this week鈥檚 Budget at least 鈥� failed to be underpinned by thought-out projects or even a clear understanding of what constitutes the 鈥淣orth鈥�, raises concerns over a potential loss of momentum around the idea, whatever the number of references made to it in speeches.

It is to be hoped that the Autumn Statement, which will lay out the government鈥檚 spending plans in detail, will allay these concerns. But for now, the wait must continue.

Sarah Richardson, editor