BMF leads industry responses to 2021 Budget

BMF leads industry responses to 2021 Budget

PBM presents a round-up of comments from across the construction sector in response to the Government’s 2021 Budget announcement:

Builders Merchants Federation

The BMF expressed its disappointment that the Chancellor’s speech did not include financial support needed to kick start the upgrade and decarbonisation of the UK’s housing stock. However, the Federation welcomed the announcement of more investment in further education, which will help promote a low-carbon skills revolution.

BMF CEO John Newcomb said: “With the UNCOP26 Climate Conference less than a week away, we believe a National Retrofit Strategy is the best way to tackle an urgent national infrastructure priority – namely to improve the energy and thermal performance of homes — especially with rising gas prices adding to pressure on household bills.

“The BMF and others involved in property RMI put together the Construction Leadership Council’s 20-year fully-costed plan to improve existing homes; an investment of £5.3 billion over the next four years to tackle emissions. (This) news means international visitors arriving in Glasgow will see a missed opportunity to decarbonise by doing something simple — upgrading homes properly.”

Welcoming Government support for further education as part of a low-carbon skills revolution, John also called for reform of the Apprenticeship Levy, saying: “The BMF is a strong believer in the parity of esteem between academic education and vocational training — so today’s announcement of more investment in further education, with employers and local colleges at the fore-front of the Chancellor’s Skills Revolution, is very welcome.

“Apprenticeships are the established way into most crafts & trades we need now, and in future. But the Apprenticeship Levy is not working as it should and must be reformed to offer employers and learners a better experience. With numbers falling, significant sums of employer contributions remain unspent and are going straight to the Treasury.

“To match the scale and extent of the net zero challenge, all available funds should be redirected to boost apprenticeships that equip workers with the necessary technical or occupational skills — and the interpersonal skills to reassure homeowners and explain the carbon choices they can make.”

Federation of Master Builders

Despite welcome announcements on funding for skills, business rates and housing, it’s disappointing that the retrofit challenge to make our homes greener and more energy efficient has not been grasped by the Government, just four days ahead of the COP26 conference, says the FMB in response to the Budget and Spending Review.

Brian Berry, FMB Chief Executive, said: “The Chancellor has missed the opportunity to give householders peace of mind about how they can tackle the net zero challenge. With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes.

“I do, however, welcome the investment for skills and training confirmed at £3.8bn over this Parliament. Long-term skills shortages are delaying jobs for builders, with 60% reporting paused jobs in the latest FMB membership survey. I’m also glad to see further investment in housing, and warmly welcome the grant funding for local authorities to free-up small brownfield sites for housing given that land availability is the major obstacle to SME house builders. Relief for businesses by reducing the burden of the business rates system will be well received by some firms.”

National Federation of Builders

James Butcher, NFB Head of Policy, said: “The NFB welcomes the Budget which continues the trajectory of the Government’s prior commitments — securing increased public spending in capital projects, infrastructure programmes and housing delivery. A number of additional policies were also announced, which signal good news for NFB members, such as investment in the heritage sector, business rate reform and a small investment into digital planning.

“However, while the economy is set to grow significantly this year and next, the economic outlook does present a number of challenges for members, with inflation running at over 3% and expected to hit 4% next year, and continued rises in the costs of fuel and wages.”

Royal Institution of Chartered Surveyors

Head of Government Affairs Jonathan Hale commented: “While the next phase of business rates relief is welcome, this seemingly endless tinkering underlines the need for a longer-term reform to support high streets and help restore them into the thriving commercial centres that communities want to be proud of. The devil will be in the detail and our surveyors will need clear, unambiguous guidance from government to help businesses to make the most of this new support.

“Chancellor Sunak didn’t mention the need to retrofit, rather than demolish, existing buildings — a key to unlocking Net Zero carbon emissions for construction in Britain — but the £3.9bn pledged to decarbonise homes and offices, which included support for low income homeowners to transition their heating, is a good start.

“The £5bn for cladding replacement — which we already knew was coming since February — will give more leaseholders greater peace of mind that their homes will be made safe but it’s still well short of the £15bn needed that is estimated to fix every building, but the additional funding to deliver a hundred and eighty thousand much needed affordable homes is welcome.”

Forum of Private Business

Business support organisation, the Forum of Private Business, has highlighted that the Chancellor has “once again failed to address the issue of Business Rates properly, and missed the opportunity to create an immediate level playing field across small businesses, big businesses and online businesses”.

Whilst supporting the focus on low pay, notwithstanding the pain that will be faced disproportionately by smaller businesses from the rise in the minimum wage and may drive some businesses to delay new job creation, Ian Cass, Managing Director of the FPB, said: “The relief provided to businesses during the pandemic by postponing Business Rates saved many businesses from closing. To save our high streets those same businesses need that relief to continue. The 50% allowance for hospitality sector businesses is clearly welcomed, and providing reliefs for green investment is fine, but many of the retail shops that our communities rely on still face what they see as unfair business rates, and deferring the reviews until 2023 risks kicking the can down empty high streets.”

The FPB emphasises the impact on high street businesses of online business growth during the pandemic. The imposition of business rates on shops and offices, but less so on online businesses means that there is an imbalance on fair competition which threatens the life of the country’s high streets.

“The use of online services accelerated during the pandemic, quite understandably, and it is a shame that the Chancellor has not similarly accelerated a fair Business Rates regime across all levels of business.”

Womble Bond Dickinson

Simon Lewis, Construction Partner at law firm Womble Bond Dickinson, said: “The £5 billion grant which will be set aside to pay to remove unsafe cladding from the highest-risk buildings in the country was of course welcome in (the) Budget Announcement, but as always, the devil is in the detail. Given the significant number of buildings that have been found to be unsafe, limiting this just to ‘higher risk buildings’ and only for cladding is overlooking all of the other unsafe buildings that fall outside these parameters.

“The sum is of course significant but it probably won’t be enough to deal with all higher risk buildings with poor cladding and certainly won’t be enough to deal with all unsafe buildings. The government expects the RPDT (Residential Property Developer Tax) to raise £2bn, but where is the rest of the funding coming from? It would be useful to know more about how the government intends to support the industry to meet these costs.

“There is a risk that the additional costs on developers from the RPDT (and the gateway 2 levy) will simply be passed on in increased costs for leaseholders and purchasers of new buildings. The government’s Impact Assessment already estimates that the cost of complying with the Building Safety Bill/Act will be £3bn, the bulk of which will fall on the industry and is likely to be passed through to the consumer/end user.

“This announcement doesn’t directly address the central issue of how leaseholders can be rescued from the often crippling costs of making these buildings safe and the sector needs to address this urgently.”

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