Industry Responds to Chancellor’s Spring Statement

In response to yesterday’s Chancellor’s Spring Statement, Clair Prosser at BSRIA commented: “BSRIA members will be reassured by the Chancellor’s statement on the state of the UK’s fiscal health and future prosperity where ‘easing the squeeze’ was key.

It’s heartening to see a boost in the state of the UK’s public finances and justifiably judicious to set some aside in the bottom drawer with Brexit ambiguity still compromising the UK’s purse strings.

Domestic economic growth continues to be tepid which highlights how crucial it is to seize a Brexit that yields engineering and construction industry jobs and careers and an industrial strategy that helps restores UK output for BSRIA members the length and breadth of the UK.

The Chancellor said GDP growth would be 1.4 per cent this year, 0.1 per cent higher than forecast, with the forecast for 2019 and 2020 unchanged at 1.3 per cent.

On housing – he declared that London would get a supplementary £1.7bn of funding to deliver 26,000 affordable homes, including homes for social rent. This takes the overall number to more than 116,000 by the end of 2021/22.

Outside of the capital he announced a housing deal with the West Midlands to build 215,000 homes by 2031 through a £100 million grant from the Land Remediation Fund. To unlock homes in areas of high demand – he said that government was working with 44 areas on their bids for funding from the £4.1 billion Housing Infrastructure Fund, and the Housing Growth Partnership, which provides financial support for small housebuilders, will be more than doubled to £220 million.

The Chancellor said that ‘at the heart of our plan for building an economy that works for everyone is our commitment to tackle the challenges in our housing market’ and that ‘we are concluding housing deals with ambitious authorities who have agreed to deliver above their Local Housing Need’.

He added ‘the Housing Minister will make further announcements on the over the next few days on the Housing Infrastructure Fund’.

The UK’s housing crisis is, without a shadow of doubt, one of the biggest challenges we face as a country and such investment is needed to attract, train and retain workers to build the houses we need. But members and industry will only really be encouraged when we start to see a spade in the ground. Certainly – the smoke signals look good but we must truly start to think big.

Fast action is needed to adjust and amend the Apprenticeship Levy. Its lack of flexibility and complexity are concerns for BSRIA members, so it was inauspicious to miss this chance to grasp this topic head on. A revamped apprenticeship levy – with a robust skills and careers strategy – is much needed by industry.”

Jazz Gakhal, Director at Direct Line for Business added: “The Chancellor’s announcement that he will release up to £80 million to help small firms take on apprentices is fantastic news. However, it is vitally important funding is directed to developing young people’s skills that will help the economy grow. Our research has shown that construction and trade apprenticeships have fallen over the last decade and in recent years have accounted for just seven per cent of all apprenticeships.

“If we are to build a sustainable economy, we need to identify the medium and long term skills gap, especially in sectors such as construction. Trade based skills are vital to the UK economy, it’s these people who are working every day to build homes, offices and help improve our roads. If we are to support small businesses in vital areas such as construction and building, we need to target resource not only to funding apprenticeships but to also encourage young people to enter these sectors by highlighting the excellent long-term job prospects.”

Meanwhile, the House Builders Association (HBA) – the house building division of the National Federation of Builders (NFB) – believes that the Government has identified the key ingredients to tackling the housing crisis, but not the implementation strategy to put them into effect.

In other words, the Government has provided significant financial support towards tackling late payment, skills shortages and housing supply, but not a common thread aimed at solving the housing crisis. The chancellor’s statement to bring annual house building to 300,000 units by the mid-2020s also denotes a lack of urgency.

Richard Beresford, chief executive of the NFB

Richard Beresford, chief executive of the NFB, said: “If the chancellor is serious about reaching 300,000 housing units per year, supporting apprenticeships and diversifying educational achievement through T-levels, then he will need SME house builders and constructors.

SMEs not only train and retain two thirds of construction apprentices but they are our predominant private sector and rural employer. Government must deliver bolder planning reform, fairer procurement and a better understanding of the entire development process if it has any hope of making a success of today’s announcements.”

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