2020 Budget and what it means for construction

The COVID-19 pandemic will have a major effect on construction activity over the coming months. What this will mean for projects and investment in the short term is unclear, however the Chancellor’s 2020 Budget outlined considerable investment for the UK’s long-term infrastructure needs, and the Glenigan Budget 2020 - The Impact on UK Construction report is based on his Budget released on Thursday 12th March 2020.

Major investment

Infrastructure

• The Chancellor confirmed £600 billion is to be spent on infrastructure by the middle of 2025. This is the biggest spending commitment since the mid-1950's.
• The second Road Investment Strategy (RIS2) will spend over £27 billion between 2020 and 2025.
• The government also announced it is investing £20 million to develop the Midlands Rail Hub.
• More locally, the Government confirmed allocations of over £1 billion from the Transforming Cities Fund. This will deliver a range of local schemes and will also include around £800 million for bus and cycling infrastructure.
• The government also committed £4.2 billion from 2022-23 for five-year funding settlements for eight Mayoral Combined Authorities. This will help the mayors to implement long term transport investment plans for their cities.

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Potholes

• A new Potholes Fund was also announced. The fund will provide £500 million a year, resulting in a 50% increase to local road maintenance budgets in 2020-21.

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Flood defences

• The Government has announced it will double the amount it invests in the flood and coastal defence programme in England to £5.2 billion over six years, further protecting 336,000 homes.

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Housing

• The Government declared a £10.9 billion increase in housing investment to support the commitment to build at least 1 million new homes by the end of the Parliament, an average of 300,000 homes a year by the mid-2020's.

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Planning reform

• The Budget also previewed interesting changes to planning system. In the Spring, the Secretary of State for Housing, Communities and Local Government will set out the reforms along with a Planning White Paper.

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Tax reliefs

• The government had already announced the Business Rates retail discount will be increased to 50% in 2020-21. However, to support small businesses affected by COVID-19 the government is now increasing it further to 100% for 2020-21.

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