The George Osborne has delivered his to the , which includes the Government’s Growth Review Phase II and the National Infrastructure Plan.
The statement confirmed the plan to unlock up to £20 billion of private investment through signing a Memorandum of Understanding with two groups of UK pension funds, an additional £5 billion of infrastructure spending in this Spending Review period, and commitments to £5 billion of capital projects in the next Spending Review period. In addition, the Government is supporting around a further £1 billion of investment by Network Rail.
To make the UK’s infrastructure fit for the 21st century, the Government has published its National Infrastructure Plan 2011. The plan sets out a critical analysis of the state of the UK’s infrastructure and sets out a pipeline of over 500 infrastructure projects.
The key measures in the National Infrastructure Plan include:
- introducing a new approach to financing infrastructure, by leveraging £20 billion of private investment from pension funds;
- giving local authorities more flexibility to support major infrastructure by considering local borrowing to fund the Northern Line extension to Battersea, and exploring new sources of revenue, such as options for tolling on the A14.
- investing over £1 billion to tackle areas of congestion and improve the national road network, including £270 million for two new managed motorway schemes at congested times on the M3 and M6.
- investing more than £1.4 billion in railway infrastructure and commuter links, including £270 million for a rail link between Oxford and Bedford and £390 million on enhancement and renewal works to improve stations and infrastructure.
- investing £100 million to create up to ten ‘super-connected cities’ across the UK, with 80-100 megabits per second broadband and city-wide high-speed mobile coverage.
The Chief Secretary to the Treasury, Danny Alexander, will chair a new cabinet committee on infrastructure, to push through the delivery of the top 40 priority projects and programmes that are critical for growth.
The second phase of the Government’s Growth Review includes the following 'reforms':
- creating a £20 billion National Loan Guarantee Scheme, to lower the cost of loans to small businesses, and a £1 billion Business Finance Partnership, which will lend to mid-sized businesses and small and medium sized businesses in the UK through non-bank channels.
- increasing the Regional Growth Fund by £1 billion to provide ongoing support to grow the private sector in areas currently dependent on the public sector.
- an extra £600 million to fund 100 additional Free Schools, and an additional £600 million to deliver an additional 40,000 school places.
- introducing a new build mortgage indemnity scheme which will help up to 100,000 families to buy their own home, and launching a new £400 million Get Britain Building investment fund to progress stalled developments.
- providing £45 million of support to UK firms wishing to export, doubling from 25,000 to 50,000 the number of SMEs supported, and making similar support available to 500 mid-sized businesses.
- making 100 per cent capital allowances available in six Enterprise Zones (Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley).
- making available around £250 million from 2013 to support energy intensive industries manage the costs of electricity, including increasing the relief from the climate change levy on electricity for Climate Change Agreement participants to 90 per cent.
- an additional £200 million for science capital investment.
- investing £55m into the Strategic Rail Freight Network to help deliver schemes that remove bottlenecks and improve capability and longer term connectivity to the UK’s major ports.
- giving a bigger role to businesses in purchasing vocational training programmes. In the New Year employers will be invited to bid for a share of a new £250 million government fund. This will route public investment directly to employers.
- taking decisive action to remove barriers to hiring by making reforms to streamline employment law.
- investing £10 million over five years from 2013-14 in Project Enthuse, matched by investment from the Wellcome Trust, to improve the quality of science teaching in schools
- announcing how the Government will maximise the value of public sector data.
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US billings bounce back but market remains unstable.
The American Institute of Architects monthly billings index, created by surveying AIA member practices, jumped up three points in October following a sharp dip in September.
Over the past three months billing levels have jumped up and down creating a confusing picture for financial analysts, who view the index as an economic indicator of future construction activity, with spending on architectural services taking place between nine and twelve months before further construction spending.
The index, which records positive growth as any score over 50, reported its first positive results in four months in August, before dropping from 51.4 to 46.9 in September. In October the score was 49.4.
New project inquiries also jumped up, from a reading of 54.3 in September to 57.3 in October.
“An increase in the billings index is always an encouraging sign,” said AIA chief economist, Kermit Baker.
“We’re seeing some regions and some construction sectors move into positive territory. But there continues to be a high level of volatility in the marketplace, with architecture firms reporting a wide range of conditions from improving to uncertain to poor. It’s likely we will see a similar state of affairs in the coming months.”
Latest figures from Office of National Statistics see output down 0.2%.
The construction industry is continuing to feel the squeeze after posting disappointing figures for Q3 output, according to the latest report from the Office of National Statistics (ONS).
Total volume of construction output was 0.2% lower than Q2, with all new work falling by 0.6% in Q3 compared to a 1.1% rise in the previous quarter.
The total volume of construction output in Q3 fell by 1% year-on-year with new work falling by 1.8% and maintenance rising by 0.9%.
Housing suffered the most dramatic falls, with new public housing dropping 8.2% compared to Q2 and a year-on-year fall of 8.9%.
The volume of new private housing work in the third quarter of 2011 fell by 2.5% compared to the previous quarter but was still 0.7% year-on-year.
New infrastructure output was 0.3% lower compared than the previous quarter but still 13.4% higher year-on-year.
Andrew Duncan, managing director of property at Turner & Townsend, said: “These figures are further evidence of the strength of the bad economic headwinds buffeting the construction sector.
“As the Eurozone debt crisis goes from bad to worse, a tidal wave of uncertainty is washing across the Channel, swamping any green shoots that may have sprouted in the second quarter.
“The omens for next year are not good, as the Eurozone saga shows little sign of abating, and the doubt it is sowing risks undermining the fragile progress made by the industry in 2011.”