How will The Budget affect Gloucestershire businesses?

Ian Mean
Director of Business West Gloucestershire | Business West
20th November 2017

Businesses here in Gloucestershire are desperate to see a new face of our rather grey Chancellor Philip Hammond when he presents his make or break Budget on Wednesday.

That new face must be one of boldness in an atmosphere of Brexit uncertainty being felt by our businesses who need some innovative help and support. My feeling is that many see the Brexit negotiations as important to their future investment plans, but they want to see some real progress on the government’s overall industrial strategy and tax regime.

With all the lobbying from the Treasury over the weekend, housing will obviously be at the heart of what could well be his last budget as Chancellor with prominent Tories openly wanting the Brexit remainer to be sacked in what appears to be a very febrile Cabinet atmosphere. Of all the issues in Gloucestershire, housing and the lack of it - particularly affordable for young people - is perhaps the most important.

We are a county that must hold onto its best young people. We train them as apprentices at great companies like Renishaw, Delphi and Messier Dowty but they often cannot afford to buy homes and make their future here. Added to that many of these young people are actually being forced to travel from as far away as Birmingham and Cardiff every day. So, the need for more affordable housing for first time buyers especially is vital to develop the county’s economy.

Growing up in South London, my family always lived in council flats and houses. But where are those council homes now? 

Well, Stroud District Council have a housing model that should be adopted nationally. I can reveal that the leader of the council, Stephen Lydon and chief executive, David Hagg, have just written a personal letter to the Prime Minister asking for the council’s Housing Revenue Account cap to be lifted to be lifted on the amount they are allowed to spend on building homes.

In the letter to Mrs May, they say:

“We have invested wisely in a 230 new council homes programme over the past four years. This has provided much needed social rent homes as part of our affordable homes strategy. Local businesses have welcomed this provision as they seek to ensure they have a workforce able to live and work locally in an area of high housing demand”.

They point out to Mrs May that Stroud is a “jobs and growth” led local authority and “are currently the only local authority in Gloucestershire with a local plan approved under the National Planning Policy framework.

“We have extant planning permission for over 5,100 homes but the private sector is not responding by building them. We continue to be frustrated by the performance of major housebuilders in the district”.

As in Stroud, I fear we are seeing landbanking by developers to control supply and price. We have seen the Communities Secretary Sajid Javid urging the Chancellor to borrow up to £50 billion to fund a major homes building programme to try and reach what seems to be a totally unrealistic target to build 300 000 new homes every year.

But I am not holding my breath. I do not see Philip Hammond taking this sort of bold step to give home building the enormous boost it must have to develop the economy  and restore confidence in the government.

Here in Gloucestershire, the target for future new homes building, including Gloucester, Cheltenham and Tewkesbury, as part of the so-called Joint Core Strategy by 2031 is almost stratospheric at 60,000. Something like 35,000 of those new homes are due to be built in Gloucester, Cheltenham and Tewkesbury. And over half of these homes are scheduled to be built in Tewkesbury.

If these figures are to be met, it will require over 4,000 completions every year - a far cry from recent years. There are only about 2,500 homes being built with 3,000 in a good year.

So, this is why the Chancellor must be very bold indeed if he is to put housing at the forefront of his budget. Tinkering with housing will have no affect at all to a problem in this county which will grow and grow and result in harming Gloucestershire’s economic future.

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