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News Release

LONDON

JLL UK comments on business rates and infrastructure announcements ahead of the Budget


​Commenting on expected Infrastructure announcements in tomorrow’s Budget, Jon Neale, head of UK Research at JLL, said: "The UK has underinvested in infrastructure for generations, and it remains one of the major weaknesses in our ability to attract investment and build on domestic talent. Nowhere is this more apparent than London, where a lack of housing and commuting problems will gradually erode its competitiveness unless action is taken. 

“Crossrail 2 will provide much needed relief for two of London's most crowded rail routes - the underground between Victoria and Euston, which will become more crowded after HS2 is built, and the commuter corridor from South West London and Surrey.  It will also open up huge areas of north east London in Tottenham and Enfield for regeneration, providing accessible places for London's workforce to live. It is important to note, though, that the funding is for more enabling work - there is no guarantee that the route will be built at all.

"HS3 is a long-needed project that will allow the North of England to compete more on the global stage by improving the currently slow links between Leeds and Manchester and allowing them to act as a more coherent urban area. The population of Greater Manchester, Merseyside, West Yorkshire and South Yorkshire is almost 8m - only slightly less than Greater London. However, it is also important that local links within the cities are improved; UK cities outside London are poorly served by local transport compared to the capital or indeed their competitors across Europe. This also needs to be a priority for the government."

On Business rates, Tim Beattie, head of Rating at JLL UK, added “There is an expectation that the long awaited business rates review will herald a reformed and improved business rate system, but it would be wise for retailers and businesses not to hold their breath. We already know that the review is fiscally neutral and so will not involve a reduction of cost, and we have already had details about the new appeals system which leaves a lot to be desired. Rather than being simpler and more transparent the new system is set to become an onerous labyrinth of bureaucracy designed to reduce appeal volumes with no information for ratepayers as to how their assessment was arrived at. 

“A lot more detail still needs to be provided on the policy of allowing councils to retain business rates. The theory of localising the rate system is good, but in reality it is smoke and mirrors designed to disguise central government grant cuts that account for a massive quarter of local revenue. In practice this will mean local government taking the flack for a failing rates system desperately in need of more responsive and open reforms such as more frequent revaluations and applying a fixed uniform business tax rate.”

Commenting on Starter Homes, Helen Gough, Head of Buildings & Construction, JLL, said: "Osborne's proposal to build more than 30,000 Starter Homes across the country by the end of the decade sounds like the answer to our housing prayers, in theory. The reality of the situation however isn't quite so cut and dry.

"We know that there is a chronic skills shortage across the construction industry, which has not yet been remedied. Past governments have played politics with housing solutions and avoided the very real challenges of an industry that struggles to innovate and does not have enough workers to cope with current supply. Before we think about becoming a nation that 'builds' we must find the skills by giving great consideration to widening the recruitment pool and professionalising the trade. Despite investment in apprenticeships under the Coalition Government, we are still seeing a lack of apprentices coming on board. Recognising construction alongside engineering as a STEM subject in schools will draw school leavers into the sector. Improving diversity in construction could also hold some of the answers, by making the sector more appealing for women.

"We shouldn't forget that the sharp rise in wage and construction costs and increasingly choosy contractors are hampering the nation's efforts to increase housing supply, offices and infrastructure. In addition, we cannot ignore the importance of the access to labour that the EU gives us. A Brexit that may jeopardise accessing this talent from Europe by removing free movement of labour would have serious consequences and further compound the UK's housing shortage."