Dominic Browne 16 March 2016

Budget 2016: Funding boost for flood defences

Budget 2016: Funding boost for flood defences image

Chancellor George Osborne has given a boost to infrastructure in today’s Budget with investment plans flood defences, energy, housing and major projects.

Flood resilience was a keynote winner in today’s Budget, with the chancellor raising the potential for spending to put be on a secure footing similar to Highways England's under the planned ringfencing of vehicle excise duty by 2020-2021.

Mr Osborne revealed to the House: ‘I am going to increase the standard rate of Insurance Premium Tax by just half a percentage point – [from 9.5% to 10%] and commit all the extra money we raise to flood defence spending. That’s a £700m boost to our resilience and flood defences.’

Treasury officials state that while IPT is a tax on insurers if they pass the costs on to customers, ‘the average combined home and contents insurance would only increase by £1, and the average motor insurance premium by £2 per year’.

The Government will also provide a further £130m to repair roads and bridges damaged by Storms Desmond and Eva, the Treasury revealed, and £5m additional development funding to improve resilience on the Dawlish rail line.

Officials announced the Government would ‘shortly publish a National Infrastructure Delivery Plan, setting out details of over £100bn of public sector investment in infrastructure across this Parliament’.

In his speech, Mr Osborne accepted the recent recommendations from the National Infrastructure Commission, led by Lord Adonis, on energy and on transport.

He added that the Government would ‘now commission Crossrail 2’, supported by £80m to help fund development and also gave the green light to High Speed 3 between Manchester and Leeds, with £60m of initial investment.

Energy

On energy, The Budget document states: ‘The government will lay the foundations for a smart power revolution, with support for innovation in storage and other smart technologies, and an increased level of ambition on interconnection, which the NIC estimates could unlock benefits to UK consumers of up to £8bn per year.'

This includes at least ‘£50m for innovation in energy storage, demand-side response and other smart technologies over the next five years to help new technologies and business models access the market’.

And Ofgem will consult later this year on the future of the £100m Network Innovation Competition to maximise the delivery of innovative projects and technologies.

Planning and Housing

In planning and housing, the Treasury revealed it intends to bring in new ‘measures to enable a more zonal and “red line” planning system’. The Government will also set out plans later this year to encourage the production of Local Plans.

In order to minimise delays caused by planning conditions the Government intends to:
• legislate to ensure that pre-commencement planning conditions can only be used with the agreement of the developer
• review the process of deemed discharge for conditions, to ensure it is effective and its use maximised

And to help boost garden villages and towns, the government will:
• provide capacity support for Local Authorities
• introduce new legislation that will speed up and simplify the process for delivering new settlements
• announce planning incentives to support areas seeking to bring forward new settlements, in return for commitments to significant housing delivery

Devolution

Major devolution announcements that will see a boost to local infrastructure investment include:

• West of England agreement, including £900m gainshare pot, devolved transport budget and powers over adult skills
• £500m over 20 years for the Cardiff Capital Region City Deal
• Deal with East Anglia, including £900m gainshare pot, £175m ring-fenced housing fund and devolved transport and adult skills budgets
• Moving towards 100% business rates retention with the Greater London Authority

The Budget also saw announcements on the Thames Estuary 2050 Growth Commission, chaired by Lord Heseltine, which will report in 2017 and confirmation the National Infrastructure Commission will make proposals on developing the Cambridge-Milton Keynes-Oxford corridor.

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