PwC comments on the Spending Review - Infrastructure, housing & energy

Chris Scudamore, leader for capital projects and infrastructure at PwC UK, said:

“The chancellor’s announcements today, of an extensive package of infrastructure spending, underlines this Government’s commitment to improving the nation's infrastructure as a key enabler of economic growth. Infrastructure related commitments across energy, defence, housing, transport, education, health and digital are welcomed and reinforce the critical role infrastructure plays in enabling a modern economy to grow and thrive. 

“All eyes will now be on delivery with the 10 Year Infrastructure Strategy to follow next week. As a nation we have a proud history of delivering major infrastructure projects, but recent challenges have shown there is a real need to enhance the efficiency and effectiveness of delivery. Developing our young people to have the right skills to participate in these projects – and increasing the levels of innovation and AI adoption will be crucial enablers of improved delivery across the sector. 

“Some projects, despite having central funding allocated, will require an overall financing solution, including with private finance, to enable delivery. Whilst the Chancellor gave a nod to attracting private finance, specifically for delivery of housing and energy projects announced today, it’s time to reignite the conversation around the future use of public-private finance models.” 

James Bailey, housing leader for PwC, said:

“While the sector may not have received all that it might have wanted, housing is emerging as one of the winners in today’s Spending Review, as the Government continues to demonstrate its commitment to the sector as both a political and social priority and a key enabler of economic growth.  

“The new Affordable Homes Programme was the flagship announcement made by the Chancellor and will see £39bn of investment into new social and affordable housing over the next decade. This represents a significant uplift on the previous funding programme and will provide a much-needed boost to the affordable housing sector, which retains an appetite to develop but has found itself constrained by tight finances and the need to prioritise investment in existing stock improvements.  

“Similarly, the commitment to a long-term CPI + 1% rent settlement will provide confidence to the sector and institutional investors to invest in new affordable housing. The anticipation of potential further upside through social rent convergence, subject to the consultation announced, will provide further optimism for the sector. Taken together, these measures will support the restructuring of housing association balance sheets, following a difficult and uncertain period and – importantly - allow for the delivery of much-needed new affordable housing.  

“While there were no demand-side announcements in the form of a rejuvenated Help to Buy or equivalent, the combined effect of the announced measures alongside the commitment to a UK-wide mortgage guarantee scheme will help to unlock many stalled sites currently held by SMEs and volume housebuilders. This is critical to delivering a material uplift on current build-out rates.  

“Panning out, when set against a backdrop of recent housing ministry announcements around streamlining (and digitising) the planning process, through changes to the National Planning Policy Framework and the proposed Planning and Infrastructure Bill, the push towards incentivising large scale mixed-tenure models, and introducing measures to improve access to public land and low cost financing for SMEs, then you can begin to see the hallmarks of Labour’s housing strategy coming together.” 

Vicky Parker, leader of industry for energy, utilities and resources at PwC UK:

“Energy security is national security” said the Chancellor, as a package of measures were announced in today’s spending review. The objective was clear: provide long-term, resilient energy supply with a focus on domestic and secure energy production, as well as creating a stimulus to drive growth and jobs.  

“These measures included a commitment to a nuclear future to reinvigorate Britain as the home of nuclear. The long-awaited confirmation that funding of £14.2 billion for Sizewell C will go ahead gives a much-needed boost to energy security, as well as providing a pathway for the creation of 10,000 jobs and enough power for six million homes. This is in addition to a £2.5bn programme to construct small modular reactors as well as investment of £2.5bn into the research and development of nuclear fusion. The Government also confirmed it will explore the potential for clean energy development on land adjacent to the Sellafield nuclear site, to support further investment in nuclear technologies, as well as confirming funding support for the Acorn and Viking carbon capture projects, located in Aberdeenshire and Humberside respectively. 

“These are welcome initiatives, as the Government takes the necessary steps to help invest to build a balanced portfolio of technologies. Focus now urgently needs to turn to making sure the pledged investment in core skills, apprenticeships and the supply chain can be delivered at pace to support these projects, to ensure that these projects can come online to meet the future energy requirements of the UK, as well as providing a pathway for future projects.”