COMMENT The prime minister’s cabinet reshuffle was supposed to be relatively uneventful – media reports ahead of the day couldn’t have been more wrong.
It was a shock to lose Sajid Javid as chancellor of the exchequer with only four weeks to go to this year’s Budget and inevitably there was speculation that it would be delayed. However, his successor Rishi Sunak was already a senior member of the Treasury team and therefore involved in Budget preparations, and so mid-March will again see many of us mulling over the chancellor’s announcements.
Time to be bold
The new chancellor will no doubt want to put his own stamp on the Budget, and he has the right political climate to make his mark. A new government with a strong mandate is a big opportunity to give the market confidence and ensure stability, but equally it’s a chance to be bold. My hope for our new chancellor is that he accepts this challenge and indeed runs with it. We need big solutions for long-standing challenges that continue to exacerbate social and economic inequality.
The government’s ambitions for higher levels of productivity across the UK will require heavy investment in both physical and social infrastructure, and while it’s positive (and essential) that the government commits significant amounts of public investment, I urge the chancellor to consider ripping up the Treasury Green Book – the rulebook that the government uses to appraise and evaluate spending decisions.
For too long, the methodology in the Green Book has meant available funding has been weighted to London, the South East and, to a lesser extent, the East. A total of £866m was awarded through the Housing Infrastructure Fund’s Marginal Viability Fund and local authorities in London, the South East and the East received £434m, just over half of the allocated funding.
As of March 2018, up to three-quarters of funds allocated under Homes England’s £2bn infrastructure loans fund have also been awarded to projects in London and the South East.
That’s not to say that there is not an acute need for housing and infrastructure in these areas, but a rulebook skewed in their favour risks perpetuating social divisions and imbalances in the UK economy. To be clear, I am not arguing that there should not be rigorous tests applied to public investment at national or indeed local level through best consideration. Rather, that the chancellor has an opportunity to reset the rules so that they deliver wider economic, social and environmental benefits and do so in an inclusive way across the whole country.
Unlock the planning system
One of the big contradictions in government policy since 2010 is that spending on the English planning system has been cut by 55% – the greatest fall across all council activity – while housing targets over the same period have increased by 50% to 300,000.
While I hope to see this issue addressed in the forthcoming Planning White Paper, I would also like the chancellor to recognise the importance of resourcing local authorities to deliver his ambitious investment plans. The UK’s planning system is in desperate need of reform – and in its current state, it is undermining our shared ambitions for creating a more productive economy and maximising our positive impact on businesses and quality of life across the country.
Finally, the chancellor must bite the bullet and deliver the fundamental review of business rates all business sectors are demanding, in a way that is equitable and sustainable across the economically active parts of our economy.
The government is increasingly championing investment in UK property and infrastructure. Let’s hope that the Budget complements this message by delivering the bold fiscal policy decisions that will ensure the UK is on track to deliver a positive future for all parts of society.
Melanie Leech is chief executive of the British Property Federation
