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PM Johnson announces Rooseveltian "new deal"

02 July 2020
UK Prime Minister, Boris Johnson, has announced over £5bn worth of projects, which together with a taskforce named “Project Speed” are intended to bring the UK out of the COVID-19 pandemic by putting infrastructure at the heart of the recovery plan and in so doing, building back better, greener and faster.

The UK Government has set out its new plan for economic recovery from the effects of COVID-19, to build back "better", "greener" and "faster". Speaking at Dudley College on 30 June, Boris Johnson set out the Government's intention to "invest in and accelerate" infrastructure projects worth £5bn, including improvements to schools, further education colleges and hospitals, and “shovel ready” local schemes. The plan will allocate money that was set out in the Chancellor's Spring Budget for capital projects over the next five years. The precise plan for economic recovery will be set out in a speech by the Chancellor next week.

Projects included in the UK's "new deal" include:

  • £1.5bn for hospital maintenance, eradicating mental health dormitories, enabling hospital building and improving A&E capacity.
  • £100m for 29 road network projects including bridge repairs in Sandwell and improving the A15 in the Humber region.
  • £900m for "shovel ready" local growth projects in England this year and in 2021.
  • Over £1bn to fund a schools building project, announced on Monday 29 June.
  • £560m and £200m for repairs and upgrades to schools and FE colleges respectively this year.
  • £83m for maintenance of prisons and youth offender facilities, and £60m for temporary prison places.
  • £96m to accelerate investment in town centres and high streets through the Towns Fund this year, providing £500,000 - £1m for each of the 101 towns selected for town deals in the Towns Fund to spend on improvements to parks, high street and transport.

The Prime Minister said that the plans were intended to "level up" areas of the country which had been "left behind", including new academy schools, new zero carbon buses and more broadband for these areas. The Government says it will bring forward funding to accelerate infrastructure projects in Scotland, Wales and Northern Ireland by working with the devolved administrations to allocate the capital funding given through the Barnett formula. 

The Government has also highlighted its intention to promote a green recovery, including additional funding for "gigafactories" to mass produce electric vehicle components and £10m of funding to be made available immediately for the first wave of innovative R&D projects to scale-up manufacturing of the latest technology in batteries, motors, electronics and fuel cells, as part of its commitment to spend up to £1bn to attract investment in electric vehicle supply chains and R&D to the UK. 

In the Autumn, the government will publish a National Infrastructure Strategy to set direction for Parliament on core economic infrastructure, including energy networks, road and rail, flood defences and waste.

Project Speed

Johnson also announced a new Infrastructure Delivery Taskforce, "Project Speed" to ensure the delivery of public investment projects more strategically and efficiently including "the most radical reforms of our planning systems since the end of the Second World War", claiming that COVID has taught us the cost of delay. Project Speed will look at how it can "address outdated practices and identify blocks to progress". Projects to be delivered under Project Speed include the Government's commitment to build 40 new hospitals and the school rebuilding programme.

The government will launch a Policy Paper in July setting out their plan for a "comprehensive" reform of England’s planning system. It was emphasised at the PM's speech that the plan would reform laws to cut "red tape", ensuring that projects are delivered speedily as, according to the PM, procurement projects in the UK take 50% longer than in Germany. The Government has so far confirmed that new regulations, which are to come into effect from September, will mean that existing commercial properties, including newly vacant shops, can be converted into residential housing or repurposed for other uses, such as cafés or offices, without planning permission through a reform to the Use Classes Order. Furthermore, builders will no longer need a planning application to demolish and rebuild vacant residential and commercial buildings if they are rebuilt as homes. The Prime Minister also announced a new cross-government strategy to look at how public sector land can be managed and released to be used for building new homes.

Conclusion

The announcement that the government is bringing forward spending for a range of infrastructure projects as part of a national drive to "build build build" and put infrastructure at the heart of the Government's strategy for economic growth after COVID-19, will be welcome news to many UK businesses who could see the previously announced funding made available to them in the next few years. Reforms to planning laws will expedite the process further and when the relevant regulations are laid, businesses across the sector will be paying close attention to their detail. 

DWF has exceptional expertise in public funding matters. Our team has extensive experience of working within Central and Local Government and related partners such as developers and other investors on high profile grant, loans and equity investments, together with all related state aid, procurement and commercial contracts issues. Please get in touch if we can be of assistance to you.

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