Spring Budget 2017: No 'rabbits out of the hat' for infrastructure, says expert

Jonathan Hart of Pinsent Masons, the law firm behind Out-Law.com, said that despite targeted investment in technology and transport, there was little in the way of capital spending announcements to address the UK's infrastructure gap in the chancellor's speech.

"Back in autumn, there was talk of a 'pipeline' of PF2 [private finance investment] opportunities due to come to the market early in 2017," he said. "There was no mention of that in the speech, or indeed any major capital investments coming to market which could even remotely be said to constitute a pipeline. No rabbits out of the hat - but then again, given the length of time needed to prepare and develop a project to a state where it might be ready to start a lengthy procurement process, no surprises either."

"There may be some hidden surprises in the comments made by the chancellor about increased devolution to London and extra funds going to the devolved governments. However, based upon this rate of progress, the gap may take some time to close," he said.

In his Budget speech, chancellor of the exchequer Philip Hammond again highlighted the 'productivity gap' between the UK economy and those elsewhere in the G7 group of leading economies. UK productivity is currently 18% behind the G7 average and 35% behind that of Germany, and the gap is "not closing", according to the chancellor.

The government intends to close the productivity gap through "investment in training, and investment in infrastructure", Hammond said. He made a number of announcements on training and skills, particularly around technical qualifications in England, but limited infrastructure investments to the first disbursements from the £23 billion National Productivity Investment Fund announced as part of the Autumn Statement in November.

The first £300 million from the fund will be used to support 1,000 new PhD places and fellowships within STEM [science, technology, engineering and maths] subjects, while £270m will be spent on research into "disruptive" technologies, such as biotech, robotics and driverless vehicles. The announcements also include £16m for a new 5G mobile technology hub, and £200m to encourage private sector investment at a local level in full-fibre broadband networks.

The chancellor also announced the first awards from a £220m fund announced at the Autumn Statement to address 'pinch-points' on the national road network: £90m for the north of England, and £23m for the Midlands. A further £690m will be made available on a competitive basis to English local authorities for projects which tackle urban congestion, and full details will be published by the Department for Transport shortly.

A 'Midlands Engine Strategy' document will be published on Thursday, setting out options to address particular productivity barriers in the Midlands of England. This follows a similar document addressing productivity barriers in the 'Northern Powerhouse' region, which was published alongside the Autumn Statement.