Chancellor delivers budget with funding boost for cladding repairs and plans to improve housing supply

Chancellor Rishi Sunak has announced a more generous than expected budget to build a more robust economy following Brexit and hopefully the worst of the pandemic.  

The budget had mixed reviews, with many saying there is not enough to support the environment or those struggling with the cost of living crisis.  

The risk of high inflation was mentioned many times, and while the chancellor said that it is a global issue, it needs to be controlled. Following the budget, the chair of The Treasury select committee stressed his concern about rising costs and the damage it could do over the longer term. With inflation rising to 3.1% in September and set to increase, the chancellor said he has written to the Bank of England governor to ensure he does more to bring it under control.  

There were some positive signs for the economy, with the office for budget responsibility saying growth is set to rise from 4 to 6.5% this year – although this is from a low level. Rishi Sunak also announced the government is on track to return to the 0.7% to overseas aid in 2024 and 2025. 

What was announced for housing in the budget? 

Homeowners living in unsafe flats will receive more help with £5 billion funding (£3 billion of which is over the spending review period) for remediation of the highest risk buildings with unsafe cladding. This will, in part, be paid for by a 4% levy on property developers with profits over £25m. 

There was also an announcement of an additional £1.8 billion for housing supply, to deliver £10 billion investment since the start of this Parliament and unlock over 1 million new homes over the spending review 21 period and beyond. This includes £300 million locally-led grant funding distributed to Mayoral Combined Authorities and Local Authorities to unlock smaller brownfield sites for housing and improve communities in line with their priorities, and £1.5 billion to regenerate underused land and deliver transport links and community facilities, unlocking 160,000 homes. 

There was funding to reduce rough sleeping numbers with £639 million resource funding by 2024-25, a cash increase of 85% compared to 2019-20.  

What other announcements were there? 

Over £35 billion of rail investment over the spending review period, including High Speed Two, rail enhancements and vital renewals to improve passenger journeys and connectivity across the country – focusing on the Midlands and the North. 

£24 billion of strategic roads investment from 2020 to 2025, delivering over 60 upgrades, including the most extensive scheme in a generation – the Lower Thames Crossing – and upgrades to the A66, A428, A417 and A12.  

The government will invest over £5 billion in buses and cycling during this Parliament. Plus, investment of £1.2 billion (from 2021-22 to 2024-25) of the £5 billion Project Gigabit commitment to level up all parts of the UK with a target of 85% high-quality, gigabit-capable broadband coverage by 2025. 

Funding for HMRC 

HMRC’s settlement also continues the government’s ambition to build a modern, digital tax system fit for the 21st century by extending Making Tax Digital, as previously announced, helping simplify tax for businesses and reducing the scope for errors. This is forecast to generate up to £1.6 billion in additional tax revenues by 2026-27, providing a further £136 million investment over the spending review 2021 period to deliver the Single Customer Record and Account.