'Investment must be tied to training and job creation' - Construction industry responds to the 2018 Budget
Yesterday the Chancellor Philip Hammond delivered his 2018 Budget claiming the “era of austerity is finally coming to an end”. Today, the Chartered Institute of Building (CIOB) provides its reaction to the announcements affecting construction and the wider economy.
The CIOB welcomes the Chancellor’s announcement to commit greater levels of investment in the built environment. The extra £420m to tackle potholes and other minor works can all commence quickly and provide a short term boost. This combined with new spending commitments for the regions, a refreshed Northern Powerhouse Strategy, and funding to transform our high streets should be seen as an opportunity to boost construction employment.
As we have commented before, regional investment that adds value throughout the country is welcomed. Closing the investment and productivity gap between London and the rest of the UK is much-needed so the funding is encouraging. But for this to work, investment must be tied to training and job creation.
Training and Skills
The halving of SMEs’ apprenticeship levy contribution from 10 per cent to 5 per cent will prove popular in the construction industry. Additionally, the Government’s move to enable levy paying customers to transfer up to 25 per cent of their funds to pay for apprenticeship training is welcome. In an industry heavily dominated by sub-contracting it is crucial that skills development flows through the supply chain to those at the sharp edge of delivery to support UK infrastructure.
The announcements yesterday are unlikely to reduce existing pressing skills shortages but indicate a commitment to offer post-18 students a genuine and accessible choice between technical, vocational and academic routes. Although the budget has not provided significant boosts in funding for education, it has announced a series of training and skills measures, such as the National Retraining Scheme (NRS) which could help bring in new skills and those from different backgrounds into the sector.
Additional funding to create the new homes the country desperately needs is welcome. However, we have concerns about the Chancellor’s plan to simplify the process for converting commercial buildings to housing. In a time where building quality, particularly on new builds, is under severe scrutiny we urge policymakers not to view this in isolation but to develop the plans alongside the building regulations review. The ambition has to be a marriage that increases our housing stock more rapidly but also delivers a better quality of living for all.
The absence of further details about the New Homes Ombudsman, announced earlier this month, means there is still a lack of clarity on how this will be funded and how significant it will be in supporting the housing agenda.
Other measures affecting the construction industry and wider-built environment include:
- New PFI and PF2 abolished – but existing deals will continue
- Transforming Cities Fund boosted to £2.4bn from £1.7bn
- Changes in legislation to prevent VAT fraud in labour provision in the construction sector
- £38m of capital funding to support implementation of the first three T levels in 2020 across 52 providers – construction is one of these
- Additional £770 million to improve transport infrastructure in cities, and the next steps in the rollout of full fibre broadband nationwide.