Industry responds to Chancellor’s Spending Review

Industry responds to Chancellor’s Spending Review

Chancellor of the Exchequer Rishi Sunak’s announced the government’s ‘Spending Review 2020’ this Wednesday (25 November). PBM takes a look at the industry’s response. 

BMF CEO, John Newcomb said: “The Chancellor was clear that the health emergency is not yet over, and the economic emergency has only just begun.  We must be prepared for a challenging year ahead, but there was some welcome news within his statement. 

“In particular, we welcome the £20bn committed to underpin the Government’s long term housing strategy, confirmation of capital investment to deliver the Government’s commitments on building 40 hospitals and rebuilding 500 schools over the next decade, and the multi-year funding required to deliver the Prime Minister’s Ten Point Plan for a Green Industrial Revolution.  The latter includes a welcome 12-month extension for the Green Homes Grant, announced last week.

“However, we would have liked to hear the Chancellor go further and announce funding for a National Retrofit Strategy to turbo-charge the levelling-up of housing conditions throughout the country. Pump-priming this work would undoubtedly improve lives, create jobs, boost the economy as well as making greater inroads towards the Government’s target of net zero emissions by 2050.”

Brian Berry, Chief Executive of the FMB, said: “Local builders stand ready to support a strong and green economic recovery, but the statement from the Chancellor today fell far short. We look to the National Infrastructure Strategy for more detail, but no mention in the Chancellor’s speech of low carbon homes or green jobs is unacceptable given the challenges we face. Confirmation of investment in further education and skills is welcome, as is the announcement of the National Infrastructure Bank. It’s important that local builders have access to both, if they are to provide the jobs, homes and growth the country needs coming out of the pandemic.”

On Net Zero, Brian said: “We cannot meet our Net Zero carbon targets without improving the energy efficiency of our homes and moving to low carbon heat sources. Failure in this Spending Review to commit to a long-term retrofit strategy or to bring forward the £9.2bn promised in the Conservative manifesto will set the country back. Acknowledgement of the need to retrofit is one thing; but a plan must follow.”

On apprenticeships and training, Brian continued: “SMEs train 71% of apprentices in construction and are ready to help support new jobs in the sector. While the confirmation of funding for further education, £375m through the life time skills guarantee, and a particular reference to apprenticeship changes to help SMEs are all steps in the right direction, colleges will need more support if we are to cover the existing gaps in traditional construction skills like bricklaying, let alone train people in much needed green construction techniques.”

On new build housing, Brian concluded: “This year more than ever we have all appreciated how important it is to have a decent place to live. SME house builders stand ready to deliver more sustainable and beautiful homes, in each community and on small brownfield sites. I welcome the extra support from the Chancellor with the announcement of the National Home Building Fund and confirmation of Help to Build. Extra funding is welcome, but without urgent investment in our local authority planning departments to speed up decisions, projects are struggling to get off the ground.”

The Construction Products Association’s Economics Director, Professor Noble Francis, said: “As expected, the focus of this Spending Review has primarily been on aiding the recovery from the virus and furthering support for public services.  Compared to strong statements from government earlier in the year around “build, build, build”, we have much less to go on today.

“That said, with our forecasts showing that infrastructure will be one of the few bright spots for UK construction in the coming year, we are pleased to finally see that government has listened to the CPA and that the National Infrastructure Strategy has some of the detail we’ve long been calling for around the government’s project plans, funding and the path to net-zero.

“Together with the spring 2021 launch of a new National Infrastructure Bank, we have reason to be encouraged that government is taking real steps, beyond simple headlines, in delivering an infrastructure sector that truly underpins UK construction and the wider economy.”

Rain Newton-Smith, CBI Chief Economist: “Stark forecasts point to tough times ahead. But through his statement, the Chancellor has made some bold autumn decisions to power a Spring recovery.

“The Spending Review lays the foundations for a brighter economic future. A new National Infrastructure Bank, long-term funding for innovation, and a comprehensive plan for creating jobs and renewing skills are just some of the building blocks needed to deliver on this vision. It’s right to take this opportunity to plan for tomorrow.

“But ambition must be matched by action on the ground. The Government’s commitment to build, build, build must be delivered now. This means a clear strategy to upgrade the UK’s infrastructure and publishing the Energy White Paper.

“And there can be no let-up in the support for firms facing new COVID restrictions. Firms need help to survive, then thrive. Business investment and confidence can be the engine of UK growth, creating jobs around the UK.”

On infrastructure: “We know just how vital refreshing our ageing infrastructure is to repower the economy, connect more people and create job opportunities across the UK. Putting money into roads, broadband and clean energy will help do just that.

“Most importantly of all, the Government has set out its stall for the long-term by creating a National Infrastructure Bank. With the right remit, the bank has the potential, to crowd in the private finance that will be crucial to delivering these new projects.”

On National Minimum Wage: “Many lower paid workers have been the heroes of the COVID crisis, and business supports government’s ambition of ending low pay. But unemployment is rising in lower paying sectors and these increases will be tough for some firms afford, so caution is justified to protect jobs.”

On levelling up: “Local authorities and businesses have been waiting a long time to hear how EU structural funding will be replaced from 1 January. They will be encouraged to see pilot programmes launched for the UK Shared Prosperity Fund alongside the Levelling Up Fund. Both will help deliver improvements in communities across the country.”

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