Pagabo Live: October Budget Special – What This Means for the Public Sector
As Chancellor of the Exchequer Rachel Reeves delivered her first Budget in Parliament this October, many people watched closely to understand what the UK’s new Labour Government’s plans might mean for their industries.
As the first fiscal event delivered under new administration, with a reported “£22bn black hole in the nation’s finances” to account for, many anticipated strong measures with plenty of changes in direction to current policies and targets. But beyond the initial headlines, what does it all actually mean for the public sector? Our latest episode of Pagabo Live gathered together a number of industry leaders to answer just that.
In our October Budget special, our panel of experts included Julia Goldsworthy, head of social investment at Legal & General, Rob Turner, director at Grant Thornton UK LLP, and Amman Boughan, our CFO at Pagabo Group.
The webinar was presented by regular host, Tom Snee of Cartwright Communications, who started things off in the usual way by polling our audience. After asking how aware people were of the key changes facing the public sector, we found that for 66% of people, there still remained a lot of uncertainty.
Overall, our panellists agreed that while the initial announcement in October gave the headlines and indications of the direction where public sector spending may go, there’s still a lot of detail yet to come. For example, it’s only in the past week that more details have been released on what funding for the Warm Homes Plan covers.
Until those details become clearer, there are some of the important elements that our experts think the public sector needs to know and, after raising them in the webinar, shifted the audience poll to give 77% of people a much better understanding of the key changes.
The devolution agenda will be key for unlocking local projects
This could affect how and where funding gets allocated, and could be the biggest policy to help solve regional disparity as the government moves away from ‘levelling up’ as official terminology. Investors, said Julia, will be looking to trailblazing combined authorities to find examples of innovation towards place-based funding and outcomes. Rob agreed in the importance of this, underpinned with a strong industrial strategy to help define each region and guide it towards targeted, intention-led growth. Although used by the private sector, the National Wealth Fund could also help to drive this regional growth, bolstered by public partnerships.
Public and private sector partnerships could become more common
Ahead of the upcoming spending review that could offer more insight and detail into the budget, Julia predicts that ambitions to run a ‘mission-based government’ may see more cross departmental collaborations, as well as public and private partnerships. Doing so could tackle some of the bigger societal needs that need addressing in each local area, driven by support from regional mayors with real expertise in their region. Rob agreed that some of the more complex challenges and delivery of programmes could be made possible by these two sectors working closer together.
As The Office for Value for Money is formed, demonstrating the real social value of every project will become ever more crucial for securing access to funding – as well as compliance with the upcoming changes to the Procurement Act and driving towards ‘Most Advantageous Tender’ approaches. Working in close partnerships with places to learn where the real societal need for investment is will help to unlock institutional investment to make a difference to the local community.
However, Julia urged people not to overlook the power of having a mindset that sees ‘the art of the possible’ and working with partners that share key values to help projects get off the ground, independently of central government intervention. Partnerships between the public and private sector will underpin this – bringing together the delivery partners and vehicles – like our Developer-led Framework – that will enact positive change.
Commitment to measures like planning reform are reassuring – but action needs to be done to support the practical delivery of this
Whether appointing more regional mayors to increase access to funding to get projects off the ground or undertaking huge planning reform to unblock construction projects, several ambitious measures have been well received. But there remains a keenness to find more information on the practical steps that will be put in place to support each scheme’s delivery, and remove any existing barriers.
Amman raised the point of ensuring that each new combined authority was ‘tender ready’ to help them deploy the funding in a timely manner once received – something that experienced procurement partners can help with, beyond joining the dots between project and contractor. Other ongoing challenges like the construction skills and labour market are still to be addressed – impacting planning reform too.
Following on from the Autumn Budget, the built environment sector will next be waiting with bated breath for the upcoming spending review set for early next year, helping to dive deeper into the reality of some of the policies and ambitions outlined in October. It’s clear that economic growth – both nationally and regionally – is high on the agenda, which is good news for public sector projects. But now, to tap into the funding available as well as the knowledge needed to deliver projects successfully, it’s more important than ever to embrace collaboration – whether that’s within the public and private sector, across departments or even from shared knowledge within newly appointed combined authorities.
You can watch the full episode online here, and also can read our blog post for more insights into how the budget seeks to maximise every drop of public spend in several areas, including housing, transport infrastructure, public investments and more.
The next episode of Pagabo Live will take place on 11 December at 3pm, which will focus on the latest updates in the journey towards Procurement Reform ahead of the Procurement Act coming into force in February. Register here.
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