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Five Key Takeaways for London from the Spending Review

Rishi Sunak led yesterday’s Spending Review with a sobering analysis on the UK’s economic future, stating that ‘our economic emergency has only just begun’ and projecting an unemployment rate of 7.5% by the second quarter of next year.

The Chancellor announced a new £4 billion levelling up fund across England from which local communities can bid for up to £20 million in visible infrastructure projects, in Sunak’s words, the aim of this new fund is to fund projects that make people think ‘This place is better off than it was five years ago’.

Whilst this new fund had been trailed as a boon to the ‘Red Wall’ seats the Tories won in December 2019, the fund does not appear to be targeted solely at the ‘left behind communities’ in the North and Midlands that form the backbone of the Conservatives’ majority, meaning that local councils and community groups in London and the South East will be able to bid. More details on the kinds of projects that can be funded and the criteria that local areas must meet will be available in the New Year.

Bids to the fund must have the support of local MPs, something Labour’s Shadow Chancellor Anneliese Dodds has argued will lead to the scheme being hi-jacked by ambitious MPs lobbying ministers rather than empowering local communities.

For housebuilders, the Chancellor maintained £7.1 billion for a National Home Building Fund and £12 billion for the affordable homes programme, but the main focus of the Spending Review was on short term infrastructure schemes with a focus on job creation which can be completed over the next year, this includes £19 billion on transport investment and investment in health and vaccine research.

The news for local councils is mixed picture, with an additional £3 billion to be spent nationally and the ability to raise council tax by an additional 3% to pay for investment in social care. This falls short of the £1.1 billion investment that London Councils have been calling for to manage their response to COVID 19.

Sam Foulder-Hughes – Account Executive