Is that Spring in the air?
Or a chill wind for construction? Karen Fletcher considers the Chancellor’s Spring Statement.
Chancellor of the Exchequer, Philip Hammond, made his Spring Statement on March 13th and the construction industry has welcomed some elements, but called for further action in certain areas. Although not a full ‘budget’, the Statement clarified the direction that government is taking on some key issues.
On a positive note, the Chancellor focused on the problem of late payments across all UK business sectors. This is obviously an area that impacts heavily on construction firms, and which was brought into sharp relief when Carillion collapsed leaving millions owed to small firms which had been hanging on for payments for months.
Hammond announced a review into late payments. Some may say that there have been plenty of reviews into the issue. However, it could signal the start of more support for small businesses who are losing around £2 billions a year to late payments across the economy.
The Chancellor also proposed £80 millions be available for SMEs to take part in the apprenticeship programme, which will be necessary to reach the target.
But some small businesses have found the Apprenticeship Levy difficult to engage with. In the building services sector, BSRIA commented: “Fast action is needed to adjust and amend the Levy. Its lack of flexibility and complexity are concerns for BSRIA members, so it was inauspicious to miss the chance to grasp this topic head on. A revamped apprenticeship levy – with a robust skills and careers strategy – is much-needed by industry.”
Perhaps the thorniest issue was housing. Government has again set high targets, but news that over £800 millions allocated for affordable housing went unspent highlight just how difficult it has been to get things moving. The Chancellor promised several billions to different regions to deliver affordable homes, £1.7bn for London, for example.
However, the construction industry has said that offering money is not necessarily going to produce the house-building boom that the government is looking to create. Economic uncertainty and lack of lending are just two factors making planning ahead for new build a real challenge.
We wait to see what the actual outcomes will be at the Autumn Statement.