£100m boost for housing in West Midlands
A £100m grant to boost housing schemes in the West Midlands was a key announcement in Chancellor Philip Hammond’s spring statement.
The 26-minute statement had plenty of the usual politics but much fewer of the policy announcements that fiscal statements of the past have had and the money for the West Midlands was one of the few concrete announcements that hadn’t been made previously.
Hammond said: “I can announce today that we have just agreed a deal with the West Midlands who have committed to deliver 215,000 homes by 2030-31, facilitated by a £100m grant from the land remediation fund.”
The money is being combined with £250m from the Housing Infrastructure Fund to help fund the development of priority sites across the West Midlands, including the Commonwealth Games athletes’ village in Perry Barr. Other areas to benefit include Greater Icknield, Smethwick, Kings Hill, Westwood Heath and Coventry Ring Road Junction 7, and the UK Central development at Balsall Common in Solihull.
Andy Street, Mayor of the West Midlands, said: “Everybody acknowledges the housing challenges we face in this country. We have been clear with Government that here in the West Midlands we are a key part of the solution.
“This funding will see tens of millions of pounds invested to remediate brownfield sites, of which our region has many, to build homes and install the infrastructure required to accommodate growth, helping to relieve pressure on our Green Belt.”
Karl Edge, Midlands Regional Chairman at KPMG, described the news as “a real boon” for the region. He added: “It’s no secret that the housing shortage is a major issue in our local community, and in our recent productivity report, it was one of the top four priorities in need of addressing to help boost productivity.”
The latest update to economic forecasts, by the Office for Budget Responsibility (OBR), estimate that while 2018 is now expected to be slightly better than forecast in November, it has slightly downgraded its forecasts for 2021 and 2022.
The annual GDP growth forecasts of 1.5%, 1.3%, 1.3%, 1.4% and 1.5% remain weak, with Hammond left to say that “forecasts are there to be beaten”.
The OBR expects inflation to return to its 2% target over the next year, which would result in real wage growth, said Hammond.
The Government is bringing forward its business rates revaluation by a year to 2021, when it will then start its three-year review cycle.
John Webber, head of business rates at Colliers International said: “It does nothing to help those businesses, particularly the retailers who are struggling with the system today.
“The change from a seven year to a five year, then a four year and finally a three-year revaluation system, only underlines how the Government has finally realised how disastrous the seven-year 2017 revaluation was.”
Hammond also launched consultations on productivity and late payments, claiming “we are the party of small business and the champion of the entrepreneur”. £80m will be released to address the “challenges” that have resulted from the apprenticeship levy, which has caused disruption and disengagement from business.
David Hillan, head of corporate tax and practice leader at Grant Thornton in Birmingham, said: “This was not an occasion for tax measures – but there was much announced outside of the speech on consultation.
“Big conversations will take place on how online trading can be taxed (a tax based on turnover is a possibility) and on the VAT threshold – high at roughly three times UK average earnings and seen by many as a disincentive to growth – although any change would impact small traders and when Hammond suggested very modest National Insurance increases last year, he succumbed to the small business lobbying groups.”
