New Levelling-up funding for the North while Mayor of London warns of house building slow down

Sheffield - Fargate public realm improvements (CGI from Sheffield City Council)

Future Cities Forum will be discussing the proposed investment in Sheffield and Wolverhampton - part of the UK government's levelling up programme, which involves 20 places in England being transformed through regeneration with £120 million for Mayoral Combined Authorities to deliver 7,800 homes in the North and Midlands on disused brownfield land.

The announcement stated that in Sheffield, new regeneration opportunities will capitalise on the government's £37 million Levelling Up Fund and the upcoming Integrated Rail Plan electrification and upgrades. These will cut journey times between the Yorkshire city and London to just 87 minutes.

Sheffield City Council's former Head of Inner City Development, Nalin Seneviratne joined Future Cities Forum's 'Healthy Cities' event at the Apothecaries Hall. On the city centre he said that the focus on retail as a basis for regeneration has moved on:

'There was a time, when people thought more shopping centres were the answer, but retail is changing. We were saved by economic recession and the market failure of earlier schemes. In 2012 the city council took back control from developers and it now leads on making a 21 acre central site work for the city, bringing back more businesses and creating new homes in the centre. Our first tenant HSBC, has taken 140,000 square feet for the UK bank. People now want to be in the city centre where they have easy, walk-able access to shops, bars and restaurants.'

The Government says that the 20 areas will be prioritised within the new £1.5 billion Brownfield Fund. In addition, it promises that £28 million will be allocated to the West Midlands Combined Authority, to fund the projects most needed to support local levelling up ambitions.

Local authorities will be helped to ensure that the government investment in infrastructure worth over £96 billion is used to its full potential. This includes £12 billion in affordable housing, the £4.8 billion Levelling Up Fund and a £2.6 billion Shared Prosperity Fund as well as access to DLHUC's £1.5 billion Brownfield and Land Fund.

The National Brownfield Institute (NBI) which has been built at the University of Wolverhampton's flagship £120 million Springfield Campus, will focus on the research and development of Modern Methods of Construction, such as homes built off-site in factories as well as ways to clean up brownfield land so it is suitable for building on. The Institute will help secure the City of Wolverhampton and the wider West Midlands' position as a leader internationally in sustainable construction, circular economy and brownfield development and will deliver new skills, jobs and opportunities for local people.

The government will also be launching, its says, a £1.5 billion Levelling up Home Building Fund this week, providing loans to small and medium sized builders and developers to deliver 42,000 homes with the vast majority going outside London and the South East - helping to rebalance the economy and spread prosperity and opportunity more equally.

Meanwhile, the Mayor of London, Sadiq Khan, is warning that the double impact of the pandemic and Brexit is forcing up the cost of building materials and causing workforce shortages, which is slowing house-building progress in London.

The UK government's own data the Mayor's office says shows that the cost of construction materials, such as steel, timber and concrete for all types of work rose by 23% last year. This increase is roughly equal to the rise that was seen across the previous 12 years in total. Meanwhile, separate industry data suggests the inflation of construction materials reached a 40-year high in the third quarter of 2021. The rising cost of materials, it says, is not only hampering new builds, it's also having an impact on families wanting to add extensions to their homes and holding back successful businesses wanting to expand their premises.

A new survey by the Federation of Master builders (FMB) State of Trade Survey echoed this it suggests, with 95 per cent of builders seeing a rise in material costs and 74 per cent feeling under pressure to pass these increased costs onto the consumer. Meanwhile, 74 per cent of builders have put up their prices for work and 91 per cent of survey respondents expect material costs to increase in the first part of 2022.

The Mayor has warned that these issues are likely to have a significant impact on the delivery of much-needed homes in the capital. He has also repeated his call for the Government to provide additional grant funding for affordable housing in London to reflect the growing financial pressures on councils and housing associations. Workforce shortages and added costs in the wake of Brexit are placing further strain on the industry, with ONS data revealing almost a quarter of construction firms reported a shortage of workers in December, compared to the all-industry average of 14.6 per cent.

Earlier this month, the Mayor revealed that the UK-wide vacancy rate in construction has risen to its highest recorded level since 2001 and vacancies in construction were 40 per cent higher in summer 2021 than in the three months before the pandemic.

Due to these shortages, the Mayor has called on the Government to create a Coronavirus Recovery Visa to help sectors that are struggling with shortages of workers, including construction. The visa should offer at least 12 months to work in the UK and be appropriately tailored to sectors like construction where many workers prefer to work on a self-employed basis.

The Mayor of London, Sadiq Khan said:

'I am also calling on ministers to provide the increased funding for genuinely affordable housing in London that I have long called for and which is needed now more than ever. Without bricks and mortar, and enough skilled workers, the excellent progress we have made in delivering the good quality and genuinely affordable homes that Londoners need is at risk of stalling.'

Join us at our February forum where we will be discussing the investment in joined up infrastructure and homes as well as green energy networks.