°ÄÃÅÍõÖÐÍõ

Yesterday (Wednesday 6 March) saw Chancellor of the Exchequer Jeremy Hunt deliver the Spring Budget, laying out the government’s fiscal approach potentially for the last time before a General Election. This was a key opportunity for the government to court voters, and as such it was no surprise that measures to appeal to the electorate – such as cuts to personal tax – were included.

Several areas of interest to members were included, with some funding announced for increased investment in the planning system and to help boost housing supply. Detail on investment for towns and furthering devolution were also featured. Read °ÄÃÅÍõÖÐÍõ President Muyiwa Oki’s initial reaction to the Budget and find out more about what it means for members below.

National Insurance (NI) cuts

The Chancellor took the opportunity to slash NI by 2%, cutting contributions from 10% to 8% for employees, and from 8% to 6% for self-employed people. While a cut to income tax could also have been a popular choice, a cut to NI is cheaper and less inflationary – allowing the Chancellor to demonstrate fiscal responsibility, while aiming to boost popularity ahead of the next election.

Changes to VAT thresholds

The Budget also included support for small and medium businesses (SMEs) in the form of increasing the VAT registration threshold from a turnover of £85,000 to £90,000. This change will come in from 1 April 2024, and we hope to see some of our small practices benefit.

Planning education and digitisation

A long-term policy priority for °ÄÃÅÍõÖÐÍõ is increasing resource in the planning system, and yesterday saw the allocation of two small measures which may have a positive impact in this space. The first of these was £3 million pledged to match industry-led funding for skills and education programmes, which are designed to attract more people to become local planners in planning authorities.

Alongside this, measures were announced to digitise the planning system. A new pilot will use artificial intelligence (AI) to help speed up the development of local plans, while new software will be explored to streamline key processes for planning officers.

While any new funding for local planning authorities is welcome, we know that £3 million of funding and the introduction of new technology will not meet the skills and capacity challenges faced. We will continue to monitor the impact of digitisation on reducing planning delays, but are clear that this alone is not enough to fix the complex issues in the wider planning system.

A boost to housing and infrastructure

There was support on offer in the Budget for regions up and down the country, but when it came to house-building the focus was squarely on London – with the Chancellor announcing £240 million to build nearly 8,000 homes in Barking Riverside and Canary Wharf.

This is comprised of £124 million at Barking Riverside to unlock 7,200 homes, and £118 million of investment into Canary Wharf to deliver up to 750 homes alongside a life sciences hub, commercial and retail floor space, and a healthcare diagnostic facility.

Investment in high-quality housing provision, especially in areas with existing infrastructure such as these East London locations, is particularly welcome. However, we would be keen to see measures to ensure that a proportion of these homes will be genuinely affordable – especially given rising property prices in and around the capital. With the scale of the housing crisis requiring urgent action, we must see much more ambitious measures to build homes, including a significant increase in social housing provision.

The Budget also saw the announcement of round two of the Local Nutrient Mitigation Fund, which will support delivery of 30,000 homes by 2030 that would otherwise be stalled due to high levels of nutrient pollution. We know nutrient neutrality is an issue for members across the country, and this funding is likely to provide some welcome news.

Towns, towns, towns

Levelling up across the country is of particular importance for the government this close to an election. With this in mind, it’s little surprise to see that the Long-Term Plan for Towns, which was first unveiled in October 2023, will be extended to 20 new places.

Each location will receive £20 million for community regeneration over the next decade, and while this investment is positive, in light of already significant local authority budget cuts, it is unclear how much this funding will meet the existing and future scale of need.

AI skills for the future

To help SMEs develop AI skills needed for the future, the Budget included a new £7.4 million up-skilling fund pilot. Our recent showed that 41% of practices surveyed have adopted the use of AI, and 54% respondents expected their practice to use AI in the next two years. We will continue to closely monitor government developments in this area and promote the fund to members when it opens to applicants.

Devolution

The government also announced a new 'trailblazer' devolution deal with the North East Mayoral Combined Authority, providing new funding worth up to £100 million. This includes a new Growth Zone, which will allow the local authority to retain 100% of business rates above an agreed baseline for 25 years.

New devolution agreements have been made with Buckinghamshire Council, Surrey County Council, and Warwickshire County Council. It has also confirmed deeper devolution deals with West Yorkshire, Liverpool City Region, and South Yorkshire Combined Authorities, as well as granting additional powers to the West Midlands Combined Authority. Once enacted, these deals will increase the proportion of the population of England benefitting from devolved powers to almost two-thirds.

What’s missing?

A disappointing omission was a long-term plan to retrofit our existing housing stock - a crucial piece of the puzzle to decarbonise our built environment, while creating jobs and helping level up across the country.

We continue to advocate for a reclassification of architecture courses, which would see them qualify for funding alongside comparable disciplines such as civil and structural engineering. This would highlight the close links between the two subjects and more accurately reflect the costs of delivering a highly facilities-based course.

And with an election on the horizon…

Time will tell if the contents of the Budget will win the public over in time for the upcoming General Election. In the meantime, °ÄÃÅÍõÖÐÍõ will continue our work with the government to create a better built environment for everyone.

To find out our key priorities going into an election year, you can read our °ÄÃÅÍõÖÐÍõ manifesto for a better built environment.