Budget 2015: Construction industry reaction, part 2

A budget “which backs British manufacturers and industry.”

Chancellor George Osborne delivered his first budget yesterday since the Conservatives won the General Election in May and many of the focus points concern businesses within construction.

In part one of our reaction, the Chartered Institute of Builders (CIOB), SAS Daniels and the Royal Institution of Chartered Surveyors (RICS) all reviewed the measures applicable to construction, with particular focus on the promise to create three million apprenticeships by 2020, funded by a levy on large employers.

It is a theme that has continued, with others canvassed by UK Construction Media also adding their opinions on apprenticeships.

Many link this to the skills shortage experienced in the industry and whether or not this will alleviate some of these problems.

Charles Egbu, Dean of London South Bank University’s School of Built Environment and Architecture, believes employers should be pleased with the apprenticeships measures and says: “It (apprenticeship target) should also go some way towards addressing some of the issues of skills shortages and skills gaps in the construction sector.”

However, he stresses that quality rather than quantity should be a focus, adding: “It is important that the construction industry plays a significant role (in terms of standard setting, organizational support) in quality-driven apprenticeships. Employers, professional bodies, and providers need to work closely to make this work.”

The Government used the budget to announce that a new National Living Wage will be introduced for over 25s.

Therefore, from next April, it will be £7.20 an hour, rising to £9 by 2020.

Charles believes this should have been extended because it would have been an extra incentive for apprentices.

Meanwhile, he welcomed the Employment Allowance changes, which will see it rise an extra £1,000 next year to £3,000, commenting: “The rise in employment allowance should benefit small construction firms as they could employ four people without paying the national insurance.”

The Construction Products Association (CPA) hailed the budget as one “which backs British manufacturers and industry.”

One of the Government’s policies saw a change to the annual investment allowance announced.

In January, this will be set permanently at £200,000, which will help businesses plan their spending on longer-term investments.

The CPA is happy is happy with this measure. Dr Diana Montgomery, Chief Executive of the CPA, spoke of the confidence this will give to the industry.

She said: “This will offer industry confidence in the long-term to invest in new innovative plant and machinery equipment which will impact positively on productivity.”

The budget also saw a commitment to lowering corporation tax announced. The current level is 20% but this will fall to 18% in 2020, which will undoubtedly benefit businesses.

It is something that “pleased” the CPA, and Dr Montgomery feels that the commitment to road infrastructure spending will give the industry a degree of “certainty.”

She said: “The Chancellor’s commitment to the £15Bn road spending plan and his recognition of a long-term road investment programme offers certainty to industry.”

Meanwhile, CH2M’s Regional Managing Director for Europe, Mark Thurston, was encouraged to see the Government show so much commitment to infrastructure spending, something he believes shows that the Government know this can “boost economic productivity.”

He said: “It is encouraging to see infrastructure take such a central position in the Government’s first budget of this Parliament.

“With over £40Bn invested in transport infrastructure in the last Parliament and a further £56Bn committed in this, it is clear to see the Government recognizes the benefits renewing old and building new infrastructure can have on boosting the UK’s economic productivity.”

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