UKCW 2019

NEC BIRMINGHAM   08-10 OCTOBER 2019

building britain 

Following Chancellor Philip Hammond’s budget speech, the construction industry has been reacting to his announcements and it will affect the industry.

Most reports show industry is reasonably happy with the announcements made, but the majority also expect another budget to be announced in Spring once Britain’s exit from the EU has been signed off.

Tackling the housing crisis remains a priority for the government and this has been reflected in a number of funding boosts.

Paul Butterworth, Partner, Ashfords LLP Real Estate Team, commented: “A further £500M for the Housing Infrastructure Fund again underlines the importance of housing and offsetting from developers the costs of infrastructure on major schemes to help unlock housing developments.

“The extension of SDLT exemption on shared ownership properties valued up to £500,000 purchasing a £300,000 share, sorts out an anomaly in the tax system whereby they were caught by an SDLT hit whereas buying 100% didn’t give rise to this. It’s interesting that this is applied retrospectively so is this going to be claimed via the individual tax code.

“All in all a reasonably positive housing budget, not necessarily adding anything new but follows the trend from previous budgets.”

Kenny Ingram, Global Industry Director for Engineering, Construction and Infrastructure at IFS, said: “The announcement of the Housing Infrastructure Fund, funded by the NPIF, will increase by £500M to a total £5.5Bn, unlocking up to 650,000 new homes. The removal of the Housing Revenue Account cap, which currently controls local authority borrowing for house building, will also enable councils to increase house building to around 10,000 homes per year. In addition, the British Business Bank will deliver a new scheme providing guarantees to support up to £1Bn of lending to SME housebuilders, which is a good step towards solving the housing crisis.

“Unfortunately though, Hammond did delay decisions regarding large housebuilding firms. The independent review of the gap between housing completions and the amount of land allocated or permissioned published separately will only be responded to in February next year.

“Whilst the extensive government support for housebuilding is to be welcomed, the lack of support for private housebuilding will mean that the UK still continues to fall short of the 300,00 housing target the government is currently aiming for. The UK simply cannot deliver the amount of housebuilding it needs with the model it has today, so whilst the injection of cash from the NPIF is a welcome boost, it is important that the government evaluates how they build with modern methods of construction.”

Britain’s small builders have received some relief through business rates, many continue to bemoan the generally high rates:

Melanie Leech, Chief Executive, British Property Federation commented: “It is good to see the Chancellor acknowledge that many small retailers are struggling against powerful headwinds and provide additional relief from business rates. However, today’s announcement does not change the fact that at almost 50%, the rate of business rates is simply too high for occupiers of all sorts. It is time to recognise that business rates are unsustainable in their current form and causing untold damage to our economy; time for a fundamental review.”

Relief also comes in the form of the apprenticeship levy changes, with smaller businesses having their contributions halved to five per cent.

Duncan Green, Managing Partner leading property, construction and infrastructure consultancy Pick Everard, said: “I am pleased to hear that Mr Hammond has announced a £695M initiative to help small firms hire apprentices. I believe that apprenticeships for both males and females in construction are crucial to the future of the industry, especially because of the skills gap, and training needs to remain a top priority if we’re to see real change in the UK’s infrastructure. Essentially, skills and training are how we will see the high wage, high skill economy of the future.”

Reacting to the Budget statement, Recruitment & Employment Confederation (REC) chief executive Neil Carberry says: “Businesses across the country will welcome the pro-enterprise tone taken by the Chancellor this afternoon. While we would have liked to see more on reforming the Apprenticeship Levy to allow the training of temporary workers, delaying changes in taxation for private sector contractors is a big win for business. This was the main thing the REC wanted from the Budget as it maintains access to short-notice skills and expertise at a vital time. We’re delighted the Chancellor has listened.”

Responding to the announcement that an additional £420M is available to tackle pot hole and minor works repairs, Rick Green, Chairman, Asphalt Industry Alliance, said: “The additional funds announced today will go some way towards tackling the annual shortfall local authorities have in their highway maintenance budgets, but remains significantly less than the £1.5Bn extra a year we believe is needed to bring local roads up to target conditions so that they can be maintained in a cost-effective way in the future.”

“Whilst today’s announcement recognises the important role local roads play in supporting the economy and keeping communities connected, it is not enough to stop the on-going decline of the local road network caused as a result of years of underfunding. Hopefully, it is a welcome first step towards sustained annual increases in local road maintenance funding.”

While Christopher Snelling, Head of UK Policy, Freight Transport Association (FTA), commented: “The £420M announced in today’s Budget to repair potholes is a drop in the ocean when you consider that work that will cost more than £8Bn is needed to rectify years of under investment in our road network.”

Further infrastructure spend has been secured through the Northern Powerhouse Rail, £20M to develop a strategic outline business case for East West Rail and £291M to unlock 18,000 new homes in East London through improvements to the Docklands Light Railway.

Darren Caplan, Chief Executive of the Railway Industry Association (RIA), said: “On major projects, we welcome today’s commitment in the Budget for further funding to Northern Powerhouse Rail, East West Rail and the Docklands Light Railway, all of which are vital and will unlock economic growth, investment and jobs in different regions of the country. We urge the Government to move at similar speed on Crossrail 2, and to set out its response to the Independent Affordability Review as soon as possible, in order for the project to progress at pace.

“The Railway Industry Association (RIA) is concerned that the Government did not use this opportunity to deliver on the key asks of the rail industry, namely smoothing out ‘boom and bust’ rail funding, providing a visible pipeline of enhancements, ensuring electrification remains on the table when decarbonising the rail network, providing match-funding for rolling stock R&D in Control Period 6 and ensuring the Rail Review does not stall investment in the rail network.

“RIA will continue to campaign on these issues, and calls on the Government to engage with the industry to ensure the rail supply community can deliver the best rail network possible.”

Source: UK Construction Online

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