Budget Analysis: ACE upbeat
Key budget points from the Association of Consulting Engineers:
Following the announcement in autumn that pension funds will be approached to fund a further £20 billion of infrastructure investment, the Chancellor announed the establishment of a new Pension Infrastructure Platform owned and run by UK pension funds. This will make the first wave of its initial £2 billion investment in UK infrastructure by early 2013.
- On energy and decarbonisation, the Chancellor revealed that a new strategy for gas would be published in the launched and will make its first green investments in April 2012. However, further uncertainty for green investment was created when the Chancellor revealed he would consider replacing the Carbon Reduction Commitment if significant administrative savings could not be found.
- From April 2013 the Government will introduce a new cash basis for calculating tax for small unincorporated businesses so as to help reduce the addministrative burden of paying tax. The government will consult on the details of the scheme and whether to extend eligibility to businesses with turnover up to the VAT registration threshold of £77,000.
- Alternative means of financing infrastructure investment were set out. From 2013 all local authorities will be free to use tax incremental funding to finance projects. The government will also consider allowing city mayors to borrow against future Community Infrastructure Levy receipts where this can make a significant contribution to national infrastructure.
- The Infrastructure Delivery Update was published alongside the Budget, setting out a range of projects underway and making progress across the country. These included proposals for enhancing capacity on the A14 and expansion of the Northern Hub programme.
Construction industry figures said they welcomed the continued focus on infrastructure investment outlined by Osborne, but had been hoping for greater detail.
Noble Francis, director of economics at the Construction Products Association, said: “There is little in terms of practical measures – we’re talking about relatively small amounts in relatively few areas. It’s not a game changer, there’s very little that is significant.”
Jonathan Hook, construction partner at consultancy PwC, said the industry was waiting for detail on how the pension fund investment would be brought in, and on the future of PFI: “It’ll be positively received by business as a whole, but there’s little for the construction sector. Remember there are a lot of public sector cuts to come so the question is how the private sector can be brought in.”