Alex Ferguson developed a curious phrase during the final stages of the 2003 season saying it was ‘squeaky bum time’ in the run up to a crunch match against arsenal. That certainly must have felt like the case for Rishi Sunak in the run up to the budget today. It’s high stakes and difficult times for the Chancellor when it comes to a whole load of fiscal issues in the run up to today.
Well in terms of bullshit bingo today, Rishi certainly could have shouted HOUSE quite a few times.
There was no shortage of promises of more money to a whole host of areas not least housing. But what do some of the announcements mean and will they work?
Of course many of them were no surprise. It seems to be the norm now that most of the budget gets leaked to the media in the days running up to the budget anyway. Kind of makes me wonder what the point is in having all the pomp and circumstance on the day itself? At least it gives the government a few days away from soaring Covid figures, more supply chain issues and people gluing themselves to motorways.
I personally always find it hard to envisage the scale of what is being said when it comes to the figures being trotted out on budget day. Think about it like this. A million seconds is about 11 and a half days. A billion seconds is 31 years!
Firstly, the chancellor reiterated the promise of £11.5bn to build up to 180,000 affordable homes. Pretty punchy figures. But that is actually only £63,888.88 per home. Others know that market way better than me, but that money will just go into grant funding rather than actually building the homes themselves. About 5 or so years ago the government wanted to push local authorities back to building their own houses. Apart from a few successful examples it seems that the government is still highly reliant on the private sector to deliver on this promise.
Next, a further £1.8bn to bring 15,000 hectares of brownfield land into use. That’s the equivalent of 106 Hyde Parks for those of you who like such stats. Again punchy stuff from Rishi. But again, when you work it out that is £120,000 per hectare. When he says it is going to bring the land into use – use as what? – a surface car park?. You certainly aren’t going to build many houses with that sort of money.
More news on cladding with £5 billion towards removing it from the highest risk buildings. This to be partly funded by the residential developers property tax which he has confirmed will be levied on developers with profits over £25m at rate of 4%. The cynic in me wonders how many this will actually apply to in the way that large developers run subsidiaries and SPVs for individual developments (partly what caused the issues of replacing the dangerous cladding in the first place?)
And finally a familiar statistic once again trotted out of building 1 million new homes. But where? In the South? No – we’re levelling up remember? On green fields? No – we’re not doing that anymore according to Boris. On Brownfield? Maybe. But Lichfields previously identified that total capacity for all brownfield was 1 million total but pretty much half of that capacity was in London and the South East.
So there just simply enough land to build the amount of housing the government wants to, on the land they want it to be, in the places they would like it.
As Fergie once said, “all good leaders will find a solution”. I guess you just have to find a good leader to start with.
AB - My own thoughts.