Budget 2015: Construction industry reaction, part 1

RICS, CIOB and SAS Daniels offer their thoughts on the budget.

The first all-Conservative budget for 19 years was delivered by the Chancellor of the Exchequer, George Osborne, yesterday, with many measures put in place that directly affect the construction industry.

UK Construction Media has gauged reaction to the measures outlined to see if those involved in the industry believe that they will be of benefit.

The commitment to apprenticeships is something that was referred to regularly by those reacting to the budget.

George Osborne reiterated the drive to provide more apprenticeships, with a further three million apprenticeships created by 2020 – funded by a levy on large employers.

Furthermore, the firms committed to training will get back more than they put in.

At the Royal Institution of Chartered Surveyors (RICS), Jeremy Blackburn, Head of Policy, thinks that it is crucial to address the issues associated with skills shortages.

He said: “We agree with the Chancellor that we are not training, building or investing enough and the apprenticeship levy will help address the skills gap in our industry.”

The Chancellor also focused on road investment. As RICS has highlighted, the miles of new motorway constructed in the UK compared with France is vastly inferior and as such, a New Roads Fund of £3Bn has been established to pay for investment.

Again, this is something RICS see as crucial if the Government is serious about devolution and Jeremy Blackburn added: “We know that property is central to productivity but so is mobility.

“Fixing our infrastructure with a new £3Bn roads fund will drive locational investment and fuel Government’s commitment to devolving powers and funding across Britain.”

The Chartered Institute of Builders (CIOB) also spoke of the importance of the apprenticeships plan, and Edward Tuttle, Senior Policy and Public Affairs Manager, said that this commitment is recognition of the “acute skills shortages.”

He said: “The Government has set itself an ambitious target of delivering three million apprenticeships over the next five years – equivalent to 600,000 new apprenticeships a year.

“The introduction of a new apprenticeship levy is a big ask for business, but one that recognizes the acute skills shortages industries such as construction will face in the future unless significant investment is made in training.

“If the Government is to deliver on its ambitions, more needs to be done to promote construction as a viable career path.”

Despite this though, the CIOB questioned whether the National Living Wage should have been extended to include apprentices.

“The introduction of the National Living Wage is another promising addition and the CIOB now asks whether the Government should go further and increase the minimum wage for apprentices, which is likely to improve the appeal for individuals considering this route into industry.”

Another measure announced in the budget focuses on the Employment Allowance, which will see an extra £1,000 cut from a business’ national insurance bill.

Starting next April, this will see the Employment Allowance rise from £2,000 to £3,000, resulting in further opportunities to create full-time jobs.

Edward Tuttle said: “The CIOB welcomes the rise in employment allowance to £3,000 which will allow small firms to employ four people on the national living wage without paying any national insurance.”

Elsewhere, others still believe uncertainty needs to be addressed regarding the skills shortage.

Roger Allsup is Head of SAS Daniels, the Construction & Engineering Practice and he believes that while supporting apprenticeships is a good thing for the industry, more thought needs to be put into filling the current demand for workers.

He said: “We really need more skilled labour in the construction industry now if we are to continue on the same growth trajectory.

“The Chancellor has announced that education and training will be biased towards apprenticeships. This is great for the skilled labour part of the construction industry, but eight years of recession will mean that it will take longer than until 2017 to correct the current skills shortage. He hasn’t tackled where the current demand for a workforce will be fulfilled.

“This means looking for labour from the rest of the EU as the only way to tackle the current skills shortage, driving wages and the cost of investing in new building and infrastructure to go up.”

Roger did, however, also say that the plans laid out in the budget that will see companies get more out than they put in from the levy could result in businesses offering apprentices the living wage.

He added: “If construction and engineering businesses can really get more back than they put in from the apprenticeship levy, apprentices should be attracted to the industry and be offered the living wage.”

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