Analysis

Osborne tells Tories: “We are the builders” as he devolves £26bn to councils

Plans for National Infrastructure Commission underpinned by £26bn of local spending devolved for local councils to invest in infrastructure plus a promise to “sweep away planning rules” to allow more homes to be built. 

George Osborne

Chancellor George Osborne has promised the “biggest transfer of power to our local government in living memory” by allowing local councils to keep control of all £26bn of business rates collected rather than having to pass passing revenues to Treasury. 

“We are the builders,” he declared in a triumphant post general election victory speech, Osborne also set out his plans for a new National Infrastructure Commission to be led by former Labour minister Lord Adonis, as key to driving forward investment in critical national infrastructure. 

“That’s right, all £26bn of business rates will be kept by councils instead of being sent up to Whitehall. We will also give councils extra power and responsibilities for running their communities." George Osborne

“We’re going to allow local government to keep the rates they collect from business,” he said.  

“That’s right, all £26bn of business rates will be kept by councils instead of being sent up to Whitehall. We will also give councils extra power and responsibilities for running their communities.

Osborne also set out his much trailed plans for a new independent National Infrastructure Commission – “an idea, put forward by many people, including some Labour politicians, and its time has come” he explained

The Commission, he said would be “set up in law, free from party arguments, which works out calmly and dispassionately what the country needs to build for its future, and holds any Government’s feet to the fire if it fails to deliver”.

The commission’s work starts today he said,  to examine projects such as High Speed 3 the new link we want across the Northern Powerhouse and in London for the next big public transport projects after Crossrail,  and how the UK will secure the energy supplies it needs.

“And I am delighted that the former Labour Cabinet Minister and Transport Secretary Andrew Adonis has agreed to be the Commission’s first Chair,” he added. “He’ll now sit as a cross bench peer and help us create Britain’s plan for the future. Working together in the national interest.”

"We’ve had enough of people who own their own home lecturing others why they can’t own one too.” George Osborne

Osborne also promised to kick start the construction of more affordable home by promising to continue “sweeping away planning rules on brownfield sites”. 

“This autumn we’ll direct our housing budget towards new homes for sale,” he said. “And we’ll give housing association tenants the right to buy. We’ve had enough of people who own their own home lecturing others why they can’t own one too.”

In his speech to the party conference in Manchester Osborne also promised to take action to find new ways to fund the construction of infrastructure through a plan sell off government assets and by stream lining government pension funds. Some £5bn could be raised, he estimated, over eh next five years.

“We’re going to work with councils to create instead half a dozen British Wealth Funds spread across the country,” he said. “It will save hundreds of millions in costs, and crucially they’ll invest billions in the infrastructure of their regions."

If you would like to contact Antony Oliver about this, or any other story, please email antony.oliver@infrastructure-intelligence.com.