After months of tense political wrangling and a few moments worthy of Malcolm Tucker himself, the Spending Review has finally landed.
In the latest version of our newsletter, AMION’s spending review veteran, Graham Russell, cuts through the noise to explain what it really means for economic development. Essential reading for anyone working in place-based growth, regeneration or regional growth.
Read Graham’s take below. Contact us to ask about future newsletters.
AMION’s spending review veteran Graham Russell shares his thoughts on today’s news
After
months of tense political negotiations and shenanigans worthy of
Malcolm Tucker,
the Spending Review has finally landed. And though it might not set the
temperature raising, it certainly sets the economic climate. Today’s SR
outlined day-to-day spending totals for all departments from 26/27 to 28/29,
and investment spending plans for a further year (26/27 to 29/30). The SR
matters because it shapes where public money goes and why.
Whilst
much of the chatter before today was on winter fuel payments and fiscal blackholes, in
this article Graham explains what the SR means for economic development
professionals.
Social housing wins big
Trailed
in advance, the big marquee statement was the Chancellor announcing the biggest
boost to social housing investment in a generation. The £39 billion
investment in affordable and social housing is a big number, and it’s being
badged by ministers as a way of hitting their target of building 1.5 million
new homes. Interestingly, the dog that didn’t bark was new towns, or the
New Towns Taskforce. If government are to hit 1.5 million homes, new
towns are a major policy lever.
Local Growth Fund – back to the future?
Seasoned practitioners will recall the local growth fund from bygone
days. This is being revamped as a 10-year capital settlement, for
“specific” mayoral city regions in the North and Midlands with the highest
productivity catch-up and agglomeration potential. Rather cryptically,
they also referenced investing in up to 350 deprived communities ‘to fund
interventions including community cohesion, regeneration and improving the
public realm.’
Mission: growth
The government stated that it is establishing a Growth Mission Fund to
directly support local economic growth. This fund will invest £240 million in
projects that enable local job creation and the economic regeneration of local
communities. Further detail on this fund and the criteria that will be
applied for project selection will be set out later this summer. Watch
this space!
Big STEP for AMION – Giant Leap for Clean Energy
The government confirmed investment of over £2.5 billion in nuclear fusion including progressing with the STEP programme, the world-leading fusion plant in Nottinghamshire, creating thousands of new jobs and with the potential to unlock limitless clean power. We don’t often “hit the nuclear button” at AMION but we made an exception when asked to undertake an Economic and Wider Impact Assessment of STEP.
Green means Go: what’s next for the Green Book?
In the run-up to the SR, AMION were asked by HM Treasury to contribute to an expert roundtable discussion on the Green Book review, so this was of particular interest (not least because AMION sneaks a quiet mention in the review published today). The main takeaway was that HMT had ‘not found conclusive evidence that the methodology set out in the Green Book is biased towards certain regions’.
However, HMT did flag six key issues that need to be addressed:
- Insufficient emphasis on place-based objectives
- Ineffectiveness at assessing transformational change
- Continued over-emphasis on BCRs
- Long and complicated guidance
- Inadequate capacity and capability across the public sector
- Poor transparency of government business case
Rabbits out of the hat?
From
today, all big projects that land on HMT desks will be required to publish on
the internet a Summary Business Case, Full Business Case or Programme Business
Case within four months of approval. The rationale is simple – greater
transparency and helps share best practice.
Can we help?
We are currently supporting some of the country’s biggest regeneration projects including the £3.9 billion Ebbsfleet Garden City in Kent, the £2.5 billion Smithfield development in Birmingham and the £500 million Central Docks scheme, Liverpool. We are also working on the business case for the first phase of the £300 million Hind Street Urban Village, which aims to bring 1,500 new homes to Birkenhead.
