With businesses having had time to digest the implications of yesterday’s Spring Budget, we gauge the reaction of a cross-section of the construction industry to the Chancellor’s announcement.
Justin Arnesen, Ayming Director: R&D Tax & Grants, says: “It’s discouraging that the Chancellor has failed to progress his commitment to get Britain building. We are still experiencing a housing shortage and with Government borrowing costs falling, now would have been the perfect time to invest in, and prioritise, infrastructure.
“Disappointingly, the Chancellor has also failed to address how he will go about funding the construction industry post-Brexit. Investment alone is not enough and it needs to create bespoke infrastructure grants and incentives and, most importantly, remove the hurdles that companies currently face when pursuing the R&D tax incentive. The Government has committed to a policy of ‘get Britain building’ and yet HMRC is dragging its heels when it comes to approving a large percentage of R&D tax claims from the construction sector.
“As it stands, the Government is not encouraging the industry to innovate, to take on new and exciting projects, or to grow. It can no longer promote construction loudly while quietly delaying or obstructing vital funding.”
Brian Berry, Chief Executive of the FMB, says: “The Chancellor clearly understands that the UK won’t address the productivity challenge unless we rethink our approach to technical and vocational education. T-Levels could be the answer if they genuinely rival A-Levels in the eyes of parents, teachers and young people. UK society as a whole has been guilty of putting too much emphasis on the academic route – this has made it more difficult for vital sectors like construction and house building to attract the talented people we need. In construction, we are suffering from a severe skills shortage and this is likely to worsen once we leave the EU and no longer have easy access to European labour. This £500m funding announced today for T-Levels is therefore a welcome and much-needed boost.
“[The] Budget was an all-round strong performance from the Chancellor and he had good news to report right across the piece. However, increasing tax on the self-employed is not helpful. If we want to establish a resilient, Brexit-proof economy, we must encourage and support our current and future entrepreneurs in the construction industry and beyond. A jump in National Insurance Contributions from one per cent to ten per cent next year could send the wrong message to those individuals who are considering going it alone. The self-employed are the backbone of our economy and the Government should tread carefully here.”
Tom Willows, Managing Associate at Bond Dickinson, says: “From the Autumn Statement via the Housing White Paper and supplementary planning guidance the Government has made all the right noises about the importance of institutional investment into new build residential property as part of the solution to the housing crisis but again the Government has missed the opportunity to make an exception for institutional investors in relation to the three per cent SDLT surcharge on additional residential properties, a change which would have undoubtedly accelerated investment and delivery.”
Owen Goodhead, Managing Director of Ranstad Construction, Property & Engineering, says: “The Chancellor’s £500m a year pot for overhauling the education system is recognition the UK’s productivity gap is fast becoming a chasm.
“This allocation of funds is not just about future-proofing our workforce, it’s about reversing the effects of years of putting academia over and above technical vocations and practical trades.
“Today’s jobs market is candidate driven because of an already crippling skills shortage in some industries, putting more pressure on companies to find, attract and retain talent. The housing crisis, for example, is also a STEM skills crisis.
“We estimate the UK is facing a workforce shortfall of 3.1m people by 2050 due to a combination of skills shortages, an ageing workforce and restrictive migration policy.
“Funneling money towards school leavers is the right tactic but pupils need to start thinking about technical skills from an even younger age. Change must start from the grass roots.”
Eddie Tuttle, Associate Director for Policy, Research and Public Affairs at the Chartered Institute of Building (CIOB), says: “The Chancellor stated that productivity was “at the very heart” of the government’s economic plan. We are keen to work with the Government to ensure construction’s contribution to improving productivity in the wider economy is better recognised.
“We also need to fully understand just how big an industry construction is and what it supports in order to get a fuller picture about productivity – data at the moment only measures on-site work and there are huge gaps in public understanding. The National Productivity Investment Fund announced in the Chancellor’s Autumn Statement last year should be used as a lever to help understand this wider impact.
“Regional investment that adds value throughout the country is welcomed, not least to close the investment and productivity gap between London and the rest of the UK. But for this to work, investment must be tied to training and job creation. CIOB, alongside other industry bodies, will be producing a report later this year on the value of regional investment in the UK, which aims to improve the construction-related investment decisions made by policy makers.
“We welcome the £500m increase in funding for technical education, though it is unlikely this will help reduce existing pressing skills shortages. Achieving greater parity between academic and vocational education and providing ‘work-ready’ employees is particularly crucial in construction. The offer within these ‘T-levels’ of a high quality work placement is vital; alongside further education institutes and employers, we as a professional body look forward to working with the Government to develop these qualifications.
“The importance of skilled trades and the construction industry need to be made clear: while other industries, such as manufacturing, have shed skilled workers, the construction industry maintains a third of all employment in this occupation group, and this is predicted to only grow further in the future. Skilled trades not only provide solid earnings in themselves, but provide many with an opportunity and a platform for progression within their career through to management and professional roles.”
Chris Wood, CEO of Develop Training Limited (DTL), says: “The Chancellor’s initiatives in the areas of training and development are to be welcomed but their eventual effect on the UK economy may however be trivial. Government can play a role in providing an appropriate landscape for training but long-term solutions to the UK’s oft-noted skills gap; the need to promote STEM subjects more greatly in schools and universities; and the attraction of more women into engineering and technical careers, can only be delivered effectively through the direct actions and influences of industry, not simply via edicts of the State.”
Stephen Stone, CEO of Crest Nicholson, says: “It has been a quiet Budget from the housebuilding industry perspective, however, it’s encouraging to see the Chancellor acknowledge the need for greater investment in skills training; especially fitting during National Apprenticeship Week.
“The inclusion of construction as one of the 15 occupation areas identified under the new T-Level is a welcome development and it’s heartening to see acknowledgement of the need for greater investment in skills training in the construction sector. The new T-Level will give 16-19 year olds routes into the construction industry, more time in the classroom, and good quality work placements – welcome news ahead of the Apprenticeship Levy in April.
“Together with the Government’s support of graduates and apprentices, this will ensure a steady supply of talent and help safeguard the future of our industry. Ultimately this means we are in a stronger position to meet the growing housing needs of the country.”