Policy & Politics Update

Property, Transport, Environment and Infrastructure

12th November 2012

Property, planning and regeneration

Plans announced for pension fund investment in infrastructure The Secretary of State for Communities and Local Government, the Rt Hon Eric Pickles MP, announced proposals that could allow local authorities to use 22 billion of pension funds to invest in infrastructure. The plans, announced on 6 November, would allow councils to use their pension funds to support the Government in its ambition to build more homes, roads and high speed railway. (Source:DCLG) Government advocates self-built homes The Minister of State for Housing and Local Government, Mark Prisk MP, has encouraged homeowners to consider building their own home as a way to boost the UK housing market. In a speech to mortgage lenders on 8 November, the minister highlighted that only 10 per cent of new UK homes were self-built compared to 60 per cent in Germany and France. (Source: BBC) NHS unlikely to procure construction work until 2014 Simon Holden, the chief executive of NHS Property Services, told Building magazine on 9 November that it was unlikely to undertake large-scale procurement until the 2014/15 financial year at the earliest. (Source: Building) Commercial real estate investment falls cross Western Europe BNP Paribas Real Estate has published figures that show the turnover from commercial real estate investment in Western Europe has fallen by 9 per cent in the first nine months of 2012 in comparison to the first nine months of 2011. The figures, published on 7 November, showed that the UK and Germany would experience declines in investment volume in 2012 of 5 per cent compared to 2011, but the rest of Western Europe would experience much larger declines. (Source: BNP Paribas Real Estate) Construction sector activity declines The Construction Trade Survey, published on 5 November by The Construction Products Association, detailed that construction activity fell sharply in Q3, despite the economy returning to growth. The survey also said that the forward looking indicators of orders and enquiries were negative, leading to speculation that the sector is unlikely to experience growth until 2014. The Office for National Statistics (ONS) UK Trade Statistical Bulletin for September 2012, published on 9 November, corroborates the outlook, highlighting that UK construction activity fell 13.1 per cent compared with September 2011. (Source: CPA) Average house prices fall The Halifax House Price Index, published on 6 November, found that the average house price in the UK fell by 0.7 per cent in October 2012 to an average of 158,426. The latest decline leaves house prices 1.7 per cent lower than they were in October 2011. (Source: Halifax) House prices unlikely to peak until 2019 Knight Frank has warned that the recovery in house prices is set to be the longest on record, with prices not set to reach the 2007 peak until 2019. The prediction, issued online on 6 November, warns that the housing sector continues to operate below peak levels, despite an expected two per cent rise in transactions in 2013. (Source: Knight Frank)

Transport
Additional funding for Green Bus Fund announced On 6 November, the Parliamentary Under-Secretary of State for Transport, Norman Baker MP, announced that an extra 20 million is being made available for the Green Bus Fund which will allow bus companies and local authorities the opportunity to purchase low carbon buses. The announcement brings the total investment in the fund to 95 million. (Source: DfT) Potential increase in HGV speed announced In a bid to boost economic growth, the Parliamentary Under-Secretary of State for Transport, Stephen Hammond MP, announced proposals to potentially increase speed limits for some HGVs. The plans, announced on 9 November, could increase the speed limit on single carriageways for HGVs over 7.5t from 40mph to 45mph or 50mph. (Source: DfT) Thames estuary airport to cost twice 50 billion estimate The former Secretary of State for Transport, the Rt Hon Lord Adonis PC, has warned that a Thames estuary airport would cost significantly more than the 50 billion currently estimated, if it were to go ahead. (Source: Buying Business Travel)

Energy and environment

Government funding announced to reduce vehicle emissions The Secretary of State for Business, Innovation and Skills, the Rt Hon Vince Cable MP, announced on 5 November, a competition for up to 16.5 million of government funding for projects aimed to slash vehicle emissions. The competition, set to open in February 2013, will be run by the Technology Strategy Board, the Office of Low Emission Vehicles and the Engineering and Physical Sciences Research Council. (Source: Business Green) Competition to reduce cost of offshore wind energy launched The Department for Energy and Climate Change (DECC) announced on 5 November a competition inviting innovators to submit ideas on ways to reduce the cost of offshore wind energy. The competition will award up to 10 million of funding to successful applicants to put their plans into action on wind turbines out at sea. (Source: DECC) Energy industry outlines support for Energy Bill On 5 November, the Carbon Capture and Storage Association, the Nuclear Industry Association and RenewableUK wrote a joint letter to the Secretary of State for Energy and Climate Change, the Rt Hon Ed Davey MP, in support of the Energy Bill. The three associations, who have 1,000 members between them, also called for its swift progression and the fostering of a low-carbon electricity generation mix, in order to ensure the investment is realised. (Source: RenewableUK) Mayor of London calls for investment in capitals power network The Mayor of London, Boris Johnson, told industry leaders at the first Electricity Summit that investment in Londons power network was crucial in helping boost jobs and growth. The Mayors speech, given on 6 November, identified efficient delivery of electricity as a vital part of the citys ability to attract investment from developers and new businesses. (Source: GLA) Vehicles to be converted into plastics and electricity The Environment Agency and the Department for Environment, Food and Rural Affairs (Defra) have announced that non-recyclable materials from cars will be diverted from landfill and converted into high quality plastics and electricity. The decision, announced on 6 November and welcomed by the British Metals Recycling Association, could see up to 800,000 tonnes of material converted. (Source: Edie)

Record amount of waste recycled in 2011/12 Figures released on 8 November by Defra showed that more waste was being recycled by local councils in 2011/12 England than at any time since records began. Analysis of the data warned that a levelling off of the rate of recycling showed that local authorities were facing future challenges in maintaining the increase. (Source: Letsrecycle) Reducing waste and reusing resources could drive UK economic recovery At a conference of senior business leaders, policymakers and local authority managers, the chief executive of Wrap, Liz Goodwin, claimed that reducing waste and reusing resources could help drive the UKs economic recovery as well as benefit the environment. The speech, given on 6 November, highlighted that efficient use of resources was critical to the UKs future economic resilience and competiveness. (Source: The Guardian) Biomass industry to deliver significant renewable energy by 2020 A report by Deloitte LLP, entitled Knock on wood: Is Biomass the answer to 2020?, has predicted that the biomass industry can contribute significantly more than the 21 percent renewable energy projected by the UK Government by 2020. The report, released on 6 November, claims that converting old fossil fuel power plants to biomass could provide a reliable, affordable source of low-carbon energy. (Source: Biomass Magazine) 330 billion of investment needed in UKs energy infrastructure A report by The London School of Economics and Political Science, published on 8 November and entitled Energy and the Economy: The 2030 Outlook for UK Businesses, estimates that 330 billion of investment is needed in the UKs energy infrastructure in order to keep electricity running, meet the countrys mandatory carbon targets and protect the UK economy. (Source: Business Green)

Other news
Eurozone growth prediction revised down The latest global forecast by the Centre for Economics and Business Research (CEBR), released on 5 November, predicts that the Eurozone recession will continue through 2013 and that only marginal growth was expected in 2014. It also forecasts that, while this will affect the UKs economic growth, the increase in UK GDP is likely to be faster than in any other major European country. (Source: CEBR) CBI calls for joined up industrial strategy A new report, published on 8 November, by the Confederation of British Industry (CBI), entitled Playing Our Strongest Hand: Maximising the UKs Industrial Opportunities, has called for a joined-up approach to industrial strategy in order to make efficient use of substantial opportunities for growth in the sector. (Source: CBI)

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