The UK Spending Review and the Impact on Nottingham
The Chancellor used the word “fair” or “fairness” more than 30 times in his Comprehensive Spending Review speech.
Unless we want our children and their children to pay for the boom and bust years, we needed to get a grip with the deficit. At nearly £843bn this is an eye-watering amount of money.
But what of the effect on the commercial property sector, and specifically in the East Midlands? Was it “fair”?
Well there was some good news. The go ahead for the Nottingham tram lines two and three. Such infrastructure projects really do help the city make progress. More money being spent on the M1 would, in my view, have been better for Nottingham if it had been pumped into the single cart track A453. I believe this is a genuine barrier for growth for Nottingham and, without a mention in the spending review; it looks like this has been shelved.
The bad news may be that we see a return to the early 1990’s when the Inland Revenue walked away from all of the temporary offices they had mopped up while Castle Meadow was being built. As Government departments look to save costs there will inevitably be surplus property – think emda, GOEM and the like. As other agencies become rationlised we could see some of this old stock dumped on an already fragile market.
This might present opportunities for the property market, but it could also have a suppressing effect by flooding it.
The real issue is that unemployment is likely to rise as direct cuts in the Council budget takes effect. Half a million people might be affected. But there are secondary effects too as they start to cut external spend like on PR and marketing, some of which is done by external firms, and that number is simply unknown.
Unemployment affects confidence. A lack of confidence usually hits the housing market as occupiers choose to cut down debt rather than investing – and the same traits then usually feeds into the commercial sector.Continued on the next page