Budget 2016

The Freshwater public affairs team looks at Budget 2016 and what it held for transport and infrastructure.

Many have likened George Osborne’s 2016 Budget to his ‘omnishambles’ of 2012. Indeed, the controversy around changes to disability benefit payments, which spurred the resignation of Iain Duncan Smith, entirely dominated the news agenda for the week after 16 March. Arguably the major announcement on the day was the introduction of a ‘sugar tax’ on soft drinks, to be introduced in 2018. Keen to prove that this is not simply a revenue-raising stealth tax, the chancellor told us that proceeds would be invested in facilities to improve the health of Britain’s children.

When it came to transport, infrastructure and related sectors, Budget 2016 served as further evidence of the government’s commitment to investing in nationally significant projects which support its agenda of economic growth, rebalancing the nation’s wealth and boosting the UK’s skills base. It was also striking how Budget 2016 picked up on all of the first tranche of recommendations made by the new National Infrastructure Commission (NIC). While the government would have been lambasted if it had ignored the NIC, an organisation that it set up, it is a testament to the work of the commission and its importance in the policy-making process that its key recommendations were included in Budget 2016.

The Lord Adonis-chaired Commission had advised the chancellor that he should press ahead with ‘HS3’ east-west rail connectivity and London’s north-south Crossrail 2 line to provide much needed connectivity in the north of England ‘powerhouse’ economy and ensure London is furnished with the transport capacity it needs to meet the demands of a fast-growing population.

The chancellor accepted this advice and provided £80 million to help develop Crossrail 2, while asking Transport for London to match this contribution. He also lit the green light for HS3 with funding to develop detailed plans by 2018.

News on smaller transport developments across the country included a further £4 million to improve Manchester Piccadilly, Manchester Airport and Leeds stations. Consistent with this government’s pursuit of further regional and metropolitan devolution, Midlands Connect, the new transport authority for the ‘Midlands Engine’ will be put on a statutory footing to place it as a sub-national transport body along the lines of Transport for London and Transport for Greater Manchester. Prior to the budget, a £1.3bn City Deal was announced for the Cardiff City Region, providing funding for new infrastructure projects such as the South Wales Metro. Further deals were announced for East Anglia, the west of England and Greater Lincolnshire meaning powers being transferred to the local authorities in these areas and plans put in place for directly-elected mayors.

The budget reportedly accelerates the commitments delivered in last year’s spending review to invest £100 billion in infrastructure by 2020-21. Another of the National Infrastructure Commission’s recommendations has included a proposal to develop the case for a Trans-Pennine road tunnel underneath the Peak District. The chancellor has provided funding for scoping work to be carried out on this.

Mr Osborne has also commissioned the NIC to look into two further studies: 5G internet connectivity and how Britain can best take advantage of it; and strategic infrastructure in the Cambridge-Milton Keynes-Oxford corridor.

Much of the coverage around the budget has centred on controversies around cuts, however, the chancellor has validated his creation of the National Infrastructure Commission last year with all its recommendations being taken forward. This makes clear the importance of the Commission’s role for shaping government decision-making, and the investments announced in Budget 2016 appear to be good news, even if additional pressures on departmental budgets may see cuts further down the line for Department for Transport - funded schemes lying on the periphery of the government’s vision for transport.

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Impact Report 2017

Impact report 2017