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Wayne Ashton, Partner, Healthcare Planning and Leonard Poon, Partner, Cost Management
“The budget is a positive investment in the health service, with £22 billion revenue funding to reduce waiting lists, and £3.1 billion capital to deal with the backlog of maintenance. However, this is not a lot of money in the context of the whole healthcare estate and the poor condition that it’s in.
“The government has reconfirmed its commitment to remediating RAAC hospitals, with schemes in planning and some works already under way. But there are many more hospitals that need rebuilding for reasons other than RAAC. This budget defers the decision on the New Hospital Programme into the new year, linking it to the development of the new 10-year plan for the NHS. This is understandable due to the financial challenges the government is facing right now – just one new hospital costs about £1 billion – so it will be considering other ways to fund and develop them at scale.
“Taking a bigger-picture view, deferring the New Hospital Programme still costs money, because existing facilities must be maintained and kept safe while they continue to deteriorate. On the other hand, there is an opportunity for trusts to think differently and use their estates more efficiently. One solution would be to make use of the wider infrastructure available to the NHS, by utilising community facilities to free up space in hospitals. The budget included £100m of funding to upgrade 200 GP surgeries, which could be used as a catalyst to deliver on the pledge to transfer services from hospitals into the community. It is time to work together to help the NHS maximise the funding available and lay the foundations for the transformation of the NHS estate over the next 10 years.”
“More is required to tackle the backlog, but this is an opportunity to invest in the future”
Alice Parker, Partner and Architecture lead for Education, Ridge
“The schools estate needs serious, significant investment, so a 19% budget increase is brilliant. But this investment also needs to come with a rapid approval process to help meet shortfalls, especially in SEND and the secondary school bulge. The sticking point in education has always been whether they can roll it out quickly enough. The sector has £6.7bn to spend over the next year, but there are so many hoops they have to go through before we start to see it in the market.
“We also need a sensible approach to issues like RAAC and decarbonisation – it may be better to rebuild than throw good money after life-expired buildings. The industry is here and ready to help, but there’s so much that has to happen first.
“Right now, it feels like there’s a lack of conversations about decarbonising existing buildings. The DfE is talking a lot about standardisation – but that’s a newbuild issue. They need to be able to go in two directions at the same time.”
“A 19% budget increase is not to be sniffed at – but how quickly can they roll it out?”
James Smith, Senior Associate Planner, Ridge
“From a planning point of view, it feels like business as usual. There are a lot of buzzwords and references to a lot of money, but only for specific things, like HS2 or sites blocked by nutrient neutrality. This budget was never likely to open up the wider planning world or change the regulations. For that, we’ll have to wait for the National Planning Policy Framework – which will possibly be adopted just before the Christmas recess, depending on what the government means by ‘responding to the consultation’ – and the Planning and Infrastructure Bill next year.
“The reference to £46 million to recruit and train 300 graduates and apprentices across council planning teams remains – but given that the number of planning authorities is larger, I would question if this will do anything to reduce the burden.
“While the budget wasn’t overly exciting for Planning, the key thing we continue to see is a shift in attitude to development, with more of a presumption in favour for housing and renewable energy-related projects in particular. That attitude shift is far bigger for the housebuilding and renewables industry than any money the government might put into it.”
“It’s business as usual for now – the real announcement is still to come”
Phil Kelly, Partner, Sustainability and Net Zero, Ridge
“I was disappointed to see that there was almost nothing in the budget to do with sustainability or decarbonisation. A few years ago, the government introduced the Feed-in Tariff to encourage the uptake of solar panels and bring the primary costs down, and now the payback period is much shorter. Now, we’re moving towards electrification and away from gas, but I don’t see any incentivisation to do it at scale. We’ve got grid capacity issues and a risk of blackouts. At the same time, there are millions of households that could potentially invest in battery storage to help reduce stresses on the grid, but right now it just doesn’t pay back. We don’t need to throw tonnes of money at the problem, just put in tariffs or incentives so that the financials start to add up.
“The budget maintained tax incentives for electric cars, which is great – but it means electricity consumption will be even higher, and there’s nothing to solve our capacity issue at a rate that’s commensurate with the speed of legislation that’s pushing us all to electrify.
“I also don’t see any action to fix the problem that, for homes, gas is about 6p a unit and electricity is about 24p. As sustainability professionals, we’re trying to advocate for heat pumps and renewables and zero fossil fuels, and we’re working hard with our cost consultants and struggling to make the financials add up, because you’re switching to a fuel that is four times more expensive. You’d only have to go up to 10p or 11p for gas and down to 21p for electricity, and suddenly switching to a heat pump and investing in a battery makes a lot of sense.”
“The government is incentivising electric cars and homes – but what about the grid capacity to power them?”
Mark Dewhurst, Partner, Cost Management, Ridge
“My high-level overview is that there is little in the budget to encourage the private sector to invest. Continued emphasis on housing is welcome, but interest rates are going to stay higher for longer and I think investors were banking on that coming down a bit, to make it more viable to push schemes forward. The cost of construction is also likely to go up slightly because of the increase in employer’s National Insurance contributions – that’s going to have to be paid somewhere. I don’t think the minimum wage increase will have a massive impact, as most of the agreements are above minimum wage. However, it may dampen the appetite for recruitment in a sector which desperately seeks growth.
“As a nation, it doesn’t feel like we’re pushing growth at the moment. There was a lot of talk about growth, but it wasn’t matched by the actual policies, and there was more about increasing taxes than encouraging growth. The International Investment Summit was a huge positive, with £63 billion coming into the UK, with renewable energy and data centres two of the key drivers. But it’ll be interesting to see what impact interest rates staying relatively high has on those investors.”
“A lot of talk about growth – shame the policies didn’t match up”
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