Chinks of light in Spending Review – BPF
It’s the day after the Spending Review and the analysis is beginning to emerge. The British Property Federation is among those noting that the forecast loss of 490,000 public-sector jobs will reduce demand for office space considerably in some areas. It points out that whereas the impact may be partly offset by growth in private-sector jobs as the economy recovers, private-sector job growth is more likely to take place in areas such as the South East, which are already much less dependent on the public sector.
Liz Peace, BPF chief executive, says the Review was as gloomy as expected overall, but she sees some chinks of light, such as the support for Crossrail, the presumption in favour of sustainable development, and the commitment to introducing tax increment financing (TIF).
The BPF is concerned at the announced reforms to the Carbon Reduction Commitment, and will be asking for greater clarity regarding plans for the Scheme after Review documents revealed that £3.5bn due to be recycled to participants in the scheme would instead be kept by government. Liz Peace said: “The coalition said they wanted to simplify the complexities of the CRC and they have certainly found a novel way to do that. This will not however ‘remove the burden on businesses’ as they claim, but ensure that the CRC will cost the wider business community almost £3.5bn more than it would have.”
“We urge the government to clarify urgently how the revised Scheme will function, as people are making decisions today upon it.”
The BPF says property owners across London will be relieved to see the government continuing its commitment to Crossrail (apart from the initial disruption the project will cause) and the efficiency of the London Underground network. It also welcomes the Chancellor’s commitment to TIF, saying it has the support of many large local authorities and major development companies. The BPF says TIF “can provide the upfront funding to pay for transport and other infrastructure improvements that are needed to make many regeneration schemes economically viable, and so help bolster economic growth.” If the legislation is introduced rapidly and is sufficiently flexible, the BPF thinks a number of TIF schemes could be quickly up and running.
