This year’s Budget confirmed the extension of the Help to Buy equity loan scheme, backed by £6bn of government cash, as well as plans to back a new Garden City development in the Ebbsfleet quarry in Kent, with £200m of investment. Other key Budget announcements. Other measures included a package to cut the burden of green levies on manufacturing and other high-energy industries. Here SpecFinish reviews some industry comments about the impact the Budget will have.
There has been a mixed bag of responses to this year’s Budget Vince Matthews, Head of Marketing, SIG Energy Management thought that this week’s Budget was a mixed bag for the construction sector; great news for housebuilders but not so good for the green agenda.
He said: “Disappointingly was the distinct lack of support offered by Mr Osborne to help alleviate the plight of the stricken Green Deal, and its sister scheme the Energy Companies Obligation (ECO) – ignoring vocal calls from across the industry to provide additional support.
“Through the 2014 Budget there was the potential for George Osborne to commit additional resource to help boost the Green Deal and make the loans it offers more appealing to homeowners; either through reduced interest rates or providing a further boost to the cash-back scheme. In choosing not to capitalise on this opportunity I fail to see how the scheme can even begin to pull itself out of the current slump in which it is stuck.”
David Mann from Tuffin Ferraby Taylor warned that the budget measures to stimulate the construction industry could be undermined by lack of human resources and materials. He warned that measures focus too much on boosting demand for new homes and pay little attention to the current skills shortages and long delivery lead times of basic building materials. Continued measures to stimulate demand, coupled with constrained supply risks pushing up house prices further.
The Construction Products Association welcomed the Chancellor’s 2014 Budget Statement which backs British manufacturers and builders.
Dr Diana Montgomery, Chief Executive of the Association, said: “We are pleased that the Help to Buy scheme has been extended to 2020. We have already seen this have a real impact on the ground in generating new starts, and are confident that this greater medium-term clarity will further incentivise builders.”
Dr Montgomery concluded, “All of this was good news for UK plc and our members; however, what was starkly missing was any indication that energy efficiency was relevant to the future of theUK’s built environment. We continue to press the government to recognise the tremendous potential for improving the housing and commercial building stock, and thereby not only back British builders and manufacturers but also improve the cost of living for home owners.”
The National Federation of Builders (NFB) welcomed the chancellor’s continued recognition of construction and housebuilding in the 2014 Budget statement. The £500 million Builders Finance Fund aimed at unblocking finance for small developers should help support existing government measures to boost small business finance such as the British Business Bank and help small builders to build.
The NFB hopes that all political parties will recognise the value of construction to the economy as they prepare their 2015 manifestos as it is a sector that generates £2.84 for every £1 invested.
Julia Evans, chief executive of the NFB said: “We look forward to receiving more details on how further changes to the planning system will support the construction of the 200,000 homes Osborne mentioned in his statement.
“However, it was disappointing not to hear any announcements on boosting retrofit measures, which would have helped people to improve their homes and bring down energy bills. The chancellor should not only fix the roof while sun is shining but should have made sure it is insulated by providing additional support through a VAT cut on retrofit measures from 20 per cent to 5 per cent.”
Murray Rowden, managing director for infrastructure at global construction consultancy, Turner & Townsend, comments: “Scratching beneath the surface, there is structural promise in Osborne’s words. He set out a plan for growth in his first budget and has stuck to it. Indeed, his promise may be the much-needed catalyst to lay the foundations to drive wider development in theUK, and further economic recovery. But promises have been made before with little or nothing to show.”
Simon Rubinsohn, RICS Chief Economist said: “A tight budget with little room for manoeuvre. While plans for regeneration and new homes in Barking, Brent Cross and the new garden ‘city’ at Ebbsfleet – which is really just a garden village – will contribute a little housing in the South East. These numbers are a drop in the ocean and do nothing to help others in theUK. More importantly, they don’t deliver the mix of homes we need across society, from the private rented sector to affordable and social housing.