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Budget 2016: Infrastructure

The Budget 2016 confirms the government’s support for the recommendations recently made by the National Infrastructure Commission, including taking forward High Speed 3.

National Infrastructure Commission


In report published on Tuesday (15 March) the commission made a number of recommendations aimed at reducing journey times, increase capacity and improve reliability in the North of England. Recommendations included funding for the development of long-term plan for HS3, beginning with kick-starting HS3 between Manchester and Leeds.

A second report published by the commission earlier in March said Crossrail 2 must be a priority.

The Budget 2016 confirms that the government accepts the following recommendations made by the National Infrastructure Commission.

  • The government will provide funding worth £300 million to improve transport connectivity in the North of England.

  • The green light has been given to HS3 between Leeds and Manchester.

  • £75 million will be given to Highways England to further develop the case for a potential Trans-Pennine tunnel between Sheffield and Manchester

  • The government will allocate £4 million to develop High Speed 2 growth strategies for Manchester Piccadilly, Manchester Airport and Leeds stations.

  • Crossrail 2 has been given the green light, supported by £80 million to support development. The government is asking Transport for London to match this investment. The government is aiming to put forward a hybrid bill during this Parliament.

The Budget also asks the commission to carry out the following two studies.

  • An assessment of how the UK can become a “world leader” in the deployment of 5G.

  • The strategic infrastructure required to generate further growth and maximise the Cambridge-Milton Keynes-Oxford corridor.



The Budget launches the second Roads Investment Strategy, which, the government said, would determine the investment plans for the 2020-21 to 2024-25 period.

To establish the UK as a “global centre for excellence in connected and autonomous vehicles” the government said it would conduct trials of driverless cars by 2017, consult this summer on removing “regulatory barriers within this Parliament to enable autonomous vehicles” on England’s roads, and establish a £15 million “connected corridor” from London to Dover to enable vehicles to communicate wirelessly with infrastructure.

Flood defences


The Budget 2016 sets out a £700 million investment for flood defences and resilience in the period to 2020-21.

Maintenance expenditure in England is set to be increased by £40 million a year while further flood defence schemes will be delivered, including in Leeds and York, totalling £150 million.

This investment increase will be funded through a 0.5 per cent rise in the standard rate of insurance premium tax.

Low-carbon energy


Some £50 million has been allocated in the Budget for “innovation in energy storage”, demand side response and other smart technologies over the next five years to help new technologies and business models access the market.

The government plans to auction Contracts for Difference of up to £730 million this Parliament for up to four gigawatts of offshore wind alongside less established renewable energy sources. The first auction will be £290 million.

Offshore wind support will be capped initially at £105 megawatt per hour (MWh), in 2011-12 prices, falling to £85/MWh for projects commissioning by 2026.

Budget 2016 can be found here.

Reaction to the infrastructure announcements can be found here.

Image credit | Shuttershock