Organisations from industry comment on the Chancellor of the Exchequer's budget statement to the House of Commons,
Builders Merchants Federation
Reacting to the Statement, John Newcomb, Chief Executive of the BMF, said: “For understandable reasons, the Chancellor gave a wholly different Budget to Parliament than he had originally planned to when he took up the job a month ago. The threat posed by a coronavirus outbreak and the likely impact on the building materials’ supply chain is a hot topic among BMF members”.
“A genuine worry is a downturn in the home improvement market, where projects are cancelled or postponed, because either the home-owner is confined at home, unable to work, or that their trade customers are unavailable if they have self-isolate”.
Newcomb was disappointed not to hear more from Mr Sunak about investing in new buildings and existing properties to decarbonise homes on the road to a net zero carbon economy. He pointed out that household energy-efficiency was noticeable by its absence, both from his speech, and from the Budget Red Book.
Newcomb continued: “Promises to introduce schemes for heat pumps and renewable heating in 2022, however welcome, are too vague and insufficient for the task we all face. A package of incentives - including a cut in VAT to 5% for home improvements - was what the industry had called for to persuade and encourage residents to upgrade their home”.
On housing, the BMF was pleased that the Affordable Housing programme will be boosted by a further £12 billion to build more much-needed social and affordable homes.
Elsewhere, promises to look again at improving the workings of the Apprenticeship Levy, the continued freeze of Fuel Duty, and more money to encourage the switch to using electric vehicles were all welcome developments, Newcomb concluded.
Construction Products Association
The Economics Director, Noble Francis, has responded to the Statement, saying: “Rishi Sunak’s first Budget rightly focused on measures to steer the UK economy through the impacts from the COVID-19 (Coronavirus) outbreak. It was nevertheless encouraging to hear the Government’s continued commitment to infrastructure and to ‘get Britain building’. As ever with such announcements, however, clear and precise detail on where specifically spending will be allocated, how it will be funded and who will do the work will be critical for industry.
Of particular note for the construction industry was the £2.5 billion pothole fund, which unlike previous pothole funds will be spent over a five-year period. In recent years pothole funds were only for the current year and so did not get spent due to lack of time and resource for local authorities. However, councils will now have time to plan properly to spend the finance where it is needed most. This sort of long-term certainty and consistency of spending should be encouraged with infrastructure delivery and this medium-term funding will be useful for construction. ”
Equally of note for our industry was the announcement of a £1 billion Building Safety Fund to cover the cost of removing unsafe materials from high rise residential buildings above 18 meters. Since the scale of the remediation efforts for the UK became clear, the CPA and colleagues across construction have encouraged government to recognise the unique role it can play by covering such costs. This new investment will be much appreciated by industry, communities and home owners alike.”
Federation of Master Builders
Responding to the statement, Brian Berry, Chief Executive of the FMB said:
“Understandably, the Chancellor has delivered a ‘first aid Budget’ to overcome the short-term crisis caused by COVID-19. But he has missed an important opportunity to announce interventions that would support the sustainable, long-term recovery construction needs. The autumn Budget must include measures to cut VAT on repair and renovation, and a National Retrofit Strategy to promote decarbonisation and create jobs and growth."
Commenting on measures to support businesses dealing with COVID-19, Berry said: “Builders are increasingly concerned about the impact COVID-19 will have on their businesses. Today’s package of measures to support SMEs through refunding Statutory Sick Pay, making temporary loans and grants available, and support for the self-employed will provide welcome relief to small building businesses and their workers alike."
On red diesel, Berry continued: “While we understand the need to move away from red diesel in the long-term, it is unfair that construction should no longer be exempt while agriculture remains so. Construction contributes 9% to GDP and employs 2.7 million people, which does not appear to be recognised by the Chancellor. He must prioritise the development of a low-cost, low-carbon alternative to support SMEs of all sectors to tackle the climate crisis. Otherwise, the Chancellor is giving with one hand to SMEs and taking with the other.”
On housing, Berry concluded: “An investment of £13.7 billion in housing is welcome news, however, there was no mention of how the Government plan to support SME house builders. Master Builders are facing major barriers finding land, accessing finance and skilled workers – these will all need addressing if we are to build 300,000 homes a year.”
Concrete Block Association
Chris Stanley, Housing Manager at the Association, commented: “We welcome the government’s commitment to big infrastructure, as it provides a welcome shot in the arm for the construction industry, which is starting to resurge following a turbulent few years. We urgently need to tackle issues such as housing, connectivity and local economies. These big projects, particularly a strategic plan to address our ageing road and rail networks, offer a catalyst which will hopefully drive activity to address these.”
“However, looking beyond these statements, I fear that further investment of in vogue but unproven construction techniques and lack of support for existing methods/production will continue. It’s a huge disappointment for many established housebuilders, contractors and core building product manufacturers, many of whom provide significant economic benefit and employment opportunities across the UK.”
“Many of our members continuously invest in developing their production to increase output, reduce manual handling and increase efficiency, all with limited or no financial backing from the government. Some of our members have expressed caution towards investing any further, as there appears to be no guarantee that Masonry is on the government’s construction and housebuilding agendas. Fundamentally, all members would happily invest if Masonry was on the agenda alongside other construction materials. Going forward, we need parity and clarity from government on this.”
Royal Institution of Chartered Surveyors
Tamara Hooper, Policy Manager at the instutition reacted to the housing policy elements of the budget: "RICS urges the government to focus on long-term solutions to the long-term issues that exist in the housing sector. A short-term vision does not solve long-term problems. We strongly believe that the government must begin to demonstrate their housing policy through real-world application rather than through headlines and news rhetoric.
"In today’s Budget speech, the chancellor announced significant grants to be awarded across the housing sector, with a particular focus on affordable homes and social housing. By investing billions of pounds in affordable homes and towards the Housing Infrastructure Fund, and cutting the interest rate on loans for building social housing, the government is enabling the sector to build housing for all.
"However, the government must recognise that ‘affordable’ housing means different things to different people, and the government needs to approach this ambitious housing programme with common sense – in addition to the stated accompanying sector funding. RICS believes mixed-tenure developments provide the best social and commercial value for housing, as discussed in the 2016 RICS information paper Placemaking and value.
One of our significant concerns, which remains unaddressed by the government, is their determination to remove Section 21 – Evicting tenants (England and Wales) – from law without proper safeguards in place for landlords to be able to remove tenants when needed.
"We highlighted to both the previous and current housing ministerial team the significant risk of progressing with this policy. It will affect the most vulnerable in the private rented sector – the people the government are supposedly amending this policy for – and could contribute to local authorities deeming people deliberately homeless.
"The £650m investment for rough sleepers promised by the chancellor is a great step in addressing homelessness, but the government must also ensure they are not inadvertently adding to the homelessness issue with current housing policy direction around the removal of Section 21.
"In 2015, RICS advised the government to create a new land category of ‘amberfield’, that is, brownfield land that does not require large amounts of clean up. Following the allocation of £400m million for building on brownfield sites, we again urge the government to consider creating this land category to provide developers with more clarity on available non-greenfield and greenbelt land.
"As a standards and regulatory body and a key contributor to the Hackitt report, we welcomed the government’s ambition in their manifesto to adopt all the recommendations of the report. The £1bn allocated to create a new building safety fund that will be used to remove ‘all unsafe’ cladding from tall buildings is a good start. Such a scheme is long-awaited but much appreciated – and is a significant step towards ensuring that all those who live in a cladded high-rise building feel safe. RICS stresses that the government must maintain its commitment to this cause.
"RICS believes the government has a responsibility to root their policies in real-world application and inform them with industry advice.
"We await tomorrow’s speech on planning, which will outline reforms and will hopefully be accompanied by full funding – particularly for planning departments, as requested in the RICS budget wish-list."
This page will updated as further reactions become available.