Autumn Statement: Housing and infrastructure spending increased to boost productivity

23 Nov 16

Philip Hammond has pledged a real terms doubling of the government’s annual spending on housing through a £2.3bn fund unveiled in the Autumn Statement today.

In a statement where he pledged to boost the UK’s investment in economic infrastructure in order to improve the country’s productivity, he also set out a £23bn National Productivity Investment Fund.

Hammond said Britain’s relatively low national productivity was one of the country’s main barriers to growth and acknowledged that he planned to borrow money to help tackle the problem.

The new housing fund will pay for up to 100,000 new homes in areas of high demand, and earmarks £1.4bn for 40,000 new affordable homes, and will cover shared ownership and affordable rent. Another £1.7bn will be used to speed up the construction of new homes on public sector land.

Also, the government will relax restrictions on government grants to allow a wider range of housing types, while a large-scale regional pilot of the Right to Buy scheme for housing association tenants will also be rolled out.

Communities secretary Sajid Javid would shortly bring forward a housing white paper to address the issues facing the sector, he added.

Terrie Alafat, the chief executive of the Chartered Institute of Housing, welcomed the chancellor’s new commitments. She said: “Given the scale of our housing crisis the central focus on housing in the government’s Autumn Statement today is a significant step in the right direction.”

She continued: “The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures… are particularly welcome. It is also pleasing to see large-scale investment in infrastructure to support new house building.”

However, Ed Cox, director of IPPR North, claimed that only devolution could tackle the endemic housing shortage.

“Plans to build more affordable homes are welcome but we need housing policies that recognise that England has not one housing market but many,” he stated.

“We need to see a new devolution deal on housing where mayors and combined authorities commit to ambitious long-term housebuilding targets in return for an expanded menu of powers and resources transferred down from central government.”

Hammond also announced a new commitment to infrastructure spending. Guidance issued to the National Infrastructure Commission will ask it to make recommendations on the future infrastructure needs of the country under the assumption that the government will invest between 1% and 1.2% of gross domestic products every year from 2020. This would be an increase from the estimated 0.8% this year.

Ministers remained committed to closing the gap between London and the rest of the country, in terms of productivity and economic performance. He said a programme of major roads schemes in the North would be given the go-ahead, while the government’s Midlands Engine strategy would follow “shortly”. Funding was also confirmed for an evaluation study for the Midlands Rail hub project to improve connectivity across the region.

Did you enjoy this article?