Summer Economic Update - Business Support Measures
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Jon Hickman - Corporate Tax Partner
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As part of the commitment to support a number of policy areas including job creation and retention, housing and the green agenda, a variety of measures have been announced including planning reforms and government subsidies intended to encourage the building of new homes and the improvement of existing homes.
Reform of the planning system has been long promised but the Government proposes to legislate over the summer to make it easier to convert buildings for different uses, including housing, without a need for planning permission and to facilitate the release of land for housing in areas where it is needed. A policy paper setting out the proposals will be published before the end of July 2020.
- £12.2bn of proposed investment to support the development of up to 180,000 affordable homes over five years announced at Budget 2020 has been confirmed
- £400m will be allocated to seven Mayoral Combined Authorities to unlock the development of 24,000 homes in England.
- £450m will be provided through the existing short-term home building fund as development finance to small and medium sized housebuilders, especially those using innovative approaches to housebuilding, who are unable to obtain access to private finance.
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The Government intends to provide funding of £50m to a new social housing decarbonisation fund to encourage social landlords to improve the energy efficiency of rented properties. The Government will lead by example through the investment of £40m to carry out similar improvements of court building and making a further £1bn available to the public sector for similar projects in schools and hospitals. £100m will also be allocated as new funding for the research and development of Direct Air Capture technology which removes CO2 from the air.
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Construction and infrastructure employment
The Government will fund a Construction Talent Retention Scheme to support the redeployment of construction workers at risk of redundancy to enable their skills to be matched to work opportunities across the UK.
£40m will also be allocated as funding for environmental charities and public authorities supporting 5,000 jobs in improving the urban landscape through the planting of trees, restoration of wildlife habitats and the clearance of waterways.
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Energy-saving and carbon emission-reducing measures
The Chancellor has announced a £2bn home insulation scheme in England, as part of a £3bn plus plan to improve energy efficiencies and cut CO2 emissions.
Homeowners and landlords will receive vouchers worth up to £5,000 towards covering at least two thirds of the cost of energy-saving home improvements such as cavity wall and floor insulation and double glazing. For those on the lowest incomes, the scheme will fully fund energy efficiency measures of up to £10,000 per household.
The scheme will open for applications for recommended energy-saving measures in September, when details of accredited local suppliers will be made available.
Part of the plan will be to fund improvements to insulation in public buildings and fit low-carbon heating technology in social housing as well as a number of other energy saving projects.
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Funding for Culture, arts and heritage organisations
During the countdown to the Chancellor’s economic statement, the Government announced a package of support for organisations in the culture, arts and heritage sectors: this is intended to help fund cultural organisations from theatres to museums and art galleries through the continued lockdown.
While the total package amounted to £1.57bn, not all of this will be in the form of direct grants as there will be £270m of loans funding (which, it is noted in the government press release, will be provided on generous terms to ensure the loans are affordable). The £1.57bn total also includes amounts allocated to the devolved administrations in Northern Ireland, Scotland and Wales.
As this funding will be shared across a wide sector of the economy, allocation decisions will be carried out in conjunction with sector bodies such as Arts Council England Historic England, National Lottery Heritage Fund and the British Film Institute. Further details are to be provided once the scheme opens for applications in the coming weeks.
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Infrastructure Round Up
The Chancellor announced a £3 billion accelerated capital spending programme. This is in addition to that previously announced by the Prime Minister to accelerate £5.6 billion of spending on infrastructure projects.
The plans to accelerate investment spending cover a number of areas. These include £1.5 billion on the NHS, around £1.75 billion on educations projects and just over £240 million on the courts and prison services. There will also be over £1 billon of expenditure with a more local focus including £900 million on so-called shovel ready local infrastructure projects. Lastly, in the context of a Covid-19 crisis, the government plans to spend £300 million in 2020-21 to enable the UK to develop world class laboratories.
Details on how these various schemes will be rolled out are limited but they will broadly fall under the umbrella of the new Infrastructure Delivery Taskforce (named ‘Project Speed’) which is intended to “promote a clean, green recovery; reform our planning system; and strengthen the Union and local government”.
We anticipate that these measures should create significant numbers of new jobs in the construction industry.
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