Crystal ball time: What’s lined up in the Autumn Statement for transport and infrastructure?
Infrastructure has become a bit of a theme ahead of Philip Hammond's first Autumn Statement.
He has already announced the National Infrastructure Commission (NIC) is to become an executive agency with a budget, and apparently autonomy too.
Rumour has it he's planning to invest up to £15bn in Britain's transport network and back dozens of small-scale infrastructure projects across the UK.
So, where are businesses expecting him to focus – and what's going to take a back seat?
The big
Heathrow Airport's third runway was given the initial go-ahead by government last month as the choice for airport expansion in the capital. But Nick Gross, chairman and head of transport and logistics at Coffin Mew, said: "The time lag and groundwork involved in getting this project up and running suggests that it is unlikely to feature heavily in the Autumn Statement."
The much-discussed (and arguably at times a bit maligned) Northern Powerhouse and Midlands Engine will need a plug, according to Cubic Transportation Systems. Additional investment will boost transport links between the two and the South East, and "create greater economics growth for Britain and provide businesses with the vital skills they need to build these economic hubs".
The bad
ICE makes a point of emphasising in its wish list to the chancellor that the UK sits just 25th in the WEF global competitiveness rankings "behind a number of our economic competitors including Japan (6th), France (8th) and Germany (13th)".
And inadequate supply of infrastructure is the second most problematic factor for doing business in the UK. Ouch.
So it wants some accountability, including the government to provide response to reports from the NIC within six months, as well as accelerating projects in the National Infrastructure Pipeline.
The local
Bar HS2, much of the government's spending commitments are expected to be delivered via local bodies, such as the Local Enterprise Partnerships or via the Local Transport Majors for bigger projects. "Money won't be easy to come by," warned Gross. The current Local Growth Fund is oversubscribed by five times.
Gross suggests it might be "those who shout loudest" – and in relation to the Local Growth Fund, those pushing on with local devolution – getting priority. "A patchwork solution seems to await," Gross said.
Duncan Green, managing partner at property and construction consultancy Pick Everard, agrees on where increased investment in infrastructure will go. "This will include smaller scale schemes which will give a much-needed boost to the UK economy and construction industry, in light of the recent announcement that construction suffered its worst quarter for four years after the Brexit vote," he said.
Meanwhile, the Institution of Civil Engineers (ICE) wants devolution granted through the creation of regional infrastructure strategies and suggests giving "greater fiscal powers to combined authorities".
The… bonds?
Hammond may raise billions through new infrastructure bonds, according to the FT. The policy would be a way to match private investors and pension funds with new transport and energy schemes.
Stephen West, partner at Gravis Capital Partners, says: "Excellent investment opportunities will be created for long-term investors requiring steady, inflation protected returns as a compelling alternative to mainstream bonds, with the small sacrifice in liquidity amply compensated by additional yield."
The now
Marshalls is demanding "shovel ready projects" rather than long-term plans that are outside this parliament. Hear that, chancellor?