Changes to Help to Buy ISAs, fuel duty frozen for the first time since March 2011 and abolishment of national insurance contributions for those under 21 were just some of the changes announced in Chancellor George Osborne’s 2015 Budget.
Help to Buy ISAs
PwC real estate director Robert Walker said the Chancellor’s announcements of new Help to Buy ISAs and housing investment will get more people on the housing ladder: “This will open the housing door to many who previously couldn’t even get past the front gate, especially in regions outside London where house prices are lower on average.”
Construction Products Association chief executive Dr Diana Montgomery said the change should stimulate home-buyers’ interest in the near term and house builders’ confidence in the medium term.
Story Homes chief executive Steve Errington said he has already seen positive effects of Help to Buy and that the changes announced by the Chancellor will boost confidence in the sector and lead to the construction of new properties.
Dr Montgomery welcomed the freeze on fuel duty: “As one of the largest users of the nation’s road network, the construction industry will certainly benefit from today’s cancellation to this year’s expected fuel duty increase.
“Not highlighted by the Chancellor is the encouraging plan to work with road haulage firms, many supporting our industry, to address the shortage of qualified drivers.”
Mr Osborne also announced plans to abolish annual tax returns and class 2 national insurance contributions for the self-employed. Dr Montgomery said the real improvement in this case was not the nominal contribution amount – £137 per annum – but rather the savings created by removing another regulatory burden and overhead, which is likely thousands of pounds and many hours of time which small and medium-sized businesses can focus elsewhere.
A lack of focus on energy efficiency was criticised by those who had hoped the Chancellor would set out a long-term commitment to the RHI.
BEAMA Underfloor director Colin Timmins said: “As a country, we need to be greener and we wanted to see the government taking more steps to ensure we are all more energy efficient. Installing renewable energy sources into home – old and new – will ultimately lead to greater energy security. Running an energy-efficient home also benefits owners and occupiers as they will save on their energy bills in the long run.”
Continental Underfloor managing director Chris Ingram believed that more attention needed to be paid to the energy sector, which strove to help homeowners reduce their energy bills by offering the most energy efficient heating options available: “The next government must address its energy policy as a priority. Look at the innovations, as well as the simple solutions, in our sector and work with us as suppliers to get it right.”
Measures to support house building and infrastructure was welcomed by WSP/Parsons Brinckerhoff chief operating officer and managing director Mark Naysmith. He said the real issue is delivery, however – specifically the capacity of the construction industry and its supply chain to deliver on projects.
“Unless we attract increasing numbers of the best and the brightest people to the construction industry and built environment, then supply will always struggle to match demand,” Mr Naysmith said.
Glenigan economics director Allan Wilén said direct government support was limited. He argued an expected £13bn of planned departmental cuts during the next Parliament indicated that publicly funded construction work would remain under pressure under a future Conservative government.
“While funding support has been pledged for a few projects – such as the Brent Cross regeneration scheme, the Croxely rail link and the Swansea Bay tidal lagoon – the Chancellor’s focus was more on the government’s enabling role,” Mr Wilén said. “This includes the promised release of public-sector land with capacity for up to 150,000 new homes between 2015 and 2020.”
Training and skills
The government’s proposed voucher model for apprenticeship funding is an improvement on what was formerly proposed and shows that ministers have listened to the construction industry, according to the Federation of Master Builders.
Chief executive Brian Berry said: “The government has finally set out a clear direction of travel in terms of its apprenticeship funding reforms. The new digital apprenticeship voucher model is a vast improvement on what was formerly proposed.
“However, we do still have some concerns about the potential for this new system to add additional administrative burden for small firms. The Construction Industry Training Board predicts that an additional 200,000 jobs will be created in the construction industry over the next five years, and up to 400,000 people could retire over the same period.
“It’s therefore crucial that government does nothing to undermine the desire or ability of small construction firms to train apprentices. Let’s not forget that two-thirds of all construction apprentices are trained by the very smallest firms, so we need to carefully develop a framework that works for them, not against them.”