On 5 December 2012, the Chancellor of the Exchequer, George Osborne, gave his Autumn Statement, setting out the government's economic and fiscal plans to build a stronger economy. The government also published a number of supplementary documents, including the National Infrastructure Plan update 2012, the Plan for Growth Implementation Update 2012 and the much-heralded new PFI materials, A new approach to public private partnerships and the Standardisation of PF2 Contracts Draft.

The 2012 Autumn Statement acknowledges that the UK economy is still recovering from the "most damaging financial crisis in generations, after a decade of growth built on unsustainable levels of debt". Not only that, but across the world, recovery over the past three years has been slower than forecast.

As the executive summary to the Statement says, the government's economic strategy was set out in the June 2010 Budget. That was designed to reduce the deficit, restore stability, equip the UK to succeed in the global race and rebalance the economy. The 2012 Autumn Statement aims to maintain that strategy and sets out the further action the government will take on growth, fairness and to protect the economy.

Although much of the 2012 Autumn Statement had already been announced (or leaked), for the construction and engineering industries, there was some positive news, with a £5.5 billion capital package and support for long-term private investment, including in new roads, science infrastructure and free schools and free academies.

In the 2012 Autumn Statement, the government announced a £5.5 billion capital package and support for long-term private investment, including in new roads, science infrastructure and free schools and free academies (Autumn Statement, paragraph 1.77). It is thought that cuts planned to government department budgets (excluding education, health and international development) will help fund this.

In the 2012 Autumn Statement, the government announced the first programme to use PF2 will be the £1.75 billion privately financed element of the Priority Schools Building Programme (Autumn Statement, paragraph 2.128). For more information, see Legal update, Priority School Building Programme: new project agreement published for consultation.

The 2012 Autumn Statement made a number of announcements on housing, both to enable new housing stock to be built (120,000 new homes have been promised) and to give greater access to funding for first-time buyers. For more information, see Legal update, 2012 Autumn Statement: property implications.

The 2012 Autumn Statement indicates the government plans to work with individual sectors to "develop approaches that best suit the needs of each industry". Industries identified for these "industry partnerships" include construction, as well as professional and business services, oil and gas, offshore wind, civil nuclear, automotive and aerospace sectors (Autumn Statement, paragraph 2.159).

The government published the National Infrastructure Plan: update 2012 (December 2012) (NIP update 2012) alongside the 2012 Autumn Statement.

The NIP update 2012 does not include significant new policy announcements since the National Infrastructure Plan 2011 (NIP 2011), but continues to develop and implement the government's existing policies. It includes detailed data in its Annexes relating to progress made against NIP 2011 targets, the future pipeline of infrastructure projects and the government's work on costs and performance indices.

The NIP update 2012:

The government plans to publish a further national infrastructure delivery update (as it did in March 2012) in spring 2013, with an annual update to the NIP along with the 2013 Autumn Statement.

For more information on:

In the 2011 Autumn Statement, the government announced its plans for major investment in roads and rail. The 2012 Autumn Statement continues to build on those road investment commitments, with an additional £1.5 billion, of which £1 billion will be invested within this spending review period, to enhance and improve the road network and reduce congestion. The latest commitments include:

(Autumn Statement, paragraphs 1.84 and 2.26-2.30.)

Alongside the 2012 Autumn Statement, the government also published the much-heralded new PFI model, A new approach to public private partnerships and the Standardisation of PF2 Contracts Draft. Sometimes referred to as the son of PFI, going forward, it will be known as PF2.

The government's aim is for a new, faster and more transparent model of infrastructure procurement, with:

The government has indicated that a number of draft forms will be published for consultation, including a standard form services output template, a pro forma payment mechanism and a shareholder arrangement. The new forms will see the government take stakes in the majority of PF2 schemes to ensure any excess profits are shared with the taxpayer. The government equity stakes will be managed by a central unit at HM Treasury, and will see the government take a place on the board of project companies.

The 2012 Autumn Statement states the first programme to use PF2 will be the £1.75 billion privately financed element of the Priority Schools Building Programme (Autumn Statement, paragraph 2.128).

For more information, see Legal update, 2012 Autumn Statement: PFI reform.

Alongside the 2012 Autumn Statement, the government published its Plan for Growth: implementation update (December 2012). This is the second implementation update since the Plan for Growth was published in March 2011, alongside the 2011 Budget. (For more information on the 2011 update, see Legal update, Progress on implementing the Plan for Growth.)

The Plan for Growth originally announced measures that would lead to new construction through increased investment and the opening up of more land for development. Section 13 of the update identifies a number of measures that have been completed or where progress has been made, such as publishing NIP 2011 (see Infrastructure strategy).

For more information on the Plan for Growth update 2012, see Legal update, 2012 Autumn Statement: property implications: Progress on the Plan for Growth.

In the 2011 Autumn Statement, the government announced a number of measures aimed at SMEs and mid-sized businesses, to help build strong supply chains. To build on these measures, in the 2012 Autumn Statement, the government has announced:

In April 2011, the government launched its Red Tape Challenge, a wide-ranging project aimed at identifying unnecessary regulations. Since then, thousands of regulations have been under the spotlight, including many that affect the construction industry.

The 2012 Autumn Statement indicates that a second phase of the Red Tape Challenge will be launched in spring 2013 (Autumn Statement, paragraph 1.125).

For more information, see Practice note, Reforming the UK's health and safety laws.

The cuts to public spending announced by the government over the last two years have hit the construction and engineering sector hard. The UK economy has also been hit by a series of shocks that have significantly weakened the economic and fiscal outlook. The 2012 Autumn Statement acknowledges that the UK economy is still recovering from the "most damaging financial crisis in generations, after a decade of growth built on unsustainable levels of debt".

Although much of the 2012 Autumn Statement had already been announced (or leaked), for the construction and engineering industries, there was some positive news, with a £5.5 billion capital package and support for long-term private investment, including in new roads, science infrastructure, free schools and free academies.