Budget 2020 – the British Property Federation response

Melanie Leech, the Chief Executive of the British Property Federation (BPF), responds and comments on the details of the Budget 2020 announced today.

“The Budget today was always going to be more difficult than the Chancellor would have liked, given the immediate threat of coronavirus, but he has rightly balanced short-term interventions in response to the global health emergency and the Government’s long-term ambitions to level up the UK’s regions. Tripling the average net investment made over the last 40 years into rail and road, affordable housing, broadband and research is a necessary and serious statement of intent – to delivering improvements in productivity, economic and social wellbeing, unlocking private sector investment into the places where we all live, work and spend our free time, improving quality of life and enabling businesses to grow across the country.”

Business rates:

“While all the short-term measures to manage the fallout from coronavirus  are welcome, the Chancellor has missed a trick. Our town and city centres, and businesses of all sizes, need more support today. It is not enough to just offer more relief to small businesses and ignore the UK’s bigger high street stores, who are some of the country’s largest employers. Downwards phasing, where businesses given a lower rates bill following an evaluation go through a staggered process of reducing their bill over a period of time, means businesses today are still paying rate liabilities related to their property valuations in 2010, while many retailers’ rents have fallen by about 30 per cent in this time. This process is unfair and should have been abolished – businesses should be paying a business rates bill that is based on current rental values.

“It is positive, however, that the Treasury’s business rates review is to begin imminently. We urgently need more frequent revaluations and the Government must move away from the outdated notion that business rates should raise the same amount of money every year regardless of the health of the economy.”

Housing:

“We fully support the Government’s ambitions to end homelessness and increase affordable housing, but the key to solving the challenge is to build more homes and overseas investment plays a key role in increasing housing supply across the country. The new Stamp Duty Land Tax surcharge for foreign buyers must not make it more expensive for responsible, long-term investors to invest in and develop more much-needed homes around the UK.

“Communities wherever they are should expect housing development to be supported with excellent infrastructure. The new allocations of the Housing Infrastructure Fund are therefore welcome, and we are pleased to see those spread around the country. It is particularly important that we recognise different land values across the country and support the provision of infrastructure where land value may not support planning contributions.”

Building safety:

“It is great to see the Government prioritising the remediation of high-rise residential buildings. A dedicated fund is much-needed support, though it will probably need further funding in future years if it is to meet the scale of interventions required.  It is clear that the wider issue of building safety will take years to resolve and require a collaborative approach between all parties affected. How Government therefore plans its long-term policy approach on this issue is very important, with funding going hand-in-hand with what is in scope.”

Green Book:

“The Chancellor’s commitment to review the Treasury Green Book – the rulebook that the government uses to appraise and evaluate spending decisions – is a significant opportunity. 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. 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. This review gives the Chancellor the chance to reset the rules so that public investment delivers wider economic, social and environmental benefits and do so in an inclusive way across the whole country.”

Environment:

“The Chancellor’s Budget announcements today do not go far enough to ensure a green transition for the economy. The built environment accounts for approximately 40% of the UK’s carbon emissions – and therefore has a crucial part to play in meeting our net zero emissions targets by 2050. From tackling issues such as the energy efficiency of owner-occupied homes, to incentivising the retrofit and renovation of existing buildings, the Chancellor’s funding ambitions are some way off the mark.

“While the Treasury’s Net Zero Review will determine the likely costs of a green transition, it will not provide the UK and industries with the necessary roadmap for how we will work together to deliver the necessary change. We welcome the increased focus on enabling consumers to switch to cleaner modes of transport by incentivising the purchase of electric vehicles, but even this does not go far enough to address the shortfall in available charging infrastructure and the likely pressures this will have on the UK’s electricity grid.

“Real estate of all types including private homes is a major contributor to carbon emissions and user of natural resources, and the Chancellor must therefore ensure that the important announcement on amplified R&D spending prioritises the decarbonisation of the built environment.”

Devolution:

“The Government’s continued commitment to further devolution of power to the UK’s regions will underpin the success of its levelling up agenda. The announcement of a new combined authority in West Yorkshire as well as the new £4.2 billion 5-year funding settlements for the eight mayoral combined authorities will allow the respective administrations better to plan and deliver for their communities.

“We support greater devolution of powers to local government. Local authorities need to be properly empowered and resourced to lead and deliver a compelling vision for the future. This requires not only the allocation of powers but also continued support and engagement from central government.”

Healthcare:

“While the Chancellor’s announcement of £6 billion worth of new funding for the NHS is welcome, there remains a great deal of uncertainty around the measures that will be taken to ensure that the wider NHS estate is fit for purpose in years to come.

“With significant backlog maintenance bills within the NHS estate, clarity is needed on the steps that government will take to address these issues, and crucially, how improvements to vital buildings and infrastructure will be funded.”

Kindly shared by British Property Federation (BPF)