In response to today’s Budget, Will Waller, Market Intelligence Lead at Arcadis, said:
“Today’s budget is a function of the geopolitical ‘tight rope’ that Britain is about to walk for the next two years at least. Buoyed by the UK’s short term economic outperformance, the Chancellor’s budget has set a self-assured and positive tone for the future, whilst at the same time making staid plans for the turbulence that many believe the UK will encounter.
“But this budget was about more than just preparing for the upcoming negotiations – it played into building a positive vision for the globally competitive Britain, focussed on improving productivity and quality of life. Investment in education and skills, consumer protection, PHD research, robotics and tech, devolved administrations, congestion and working families are all clearly aimed at making the UK a better and more competitive place to be for the longer term. Lower forecast public borrowing, an intensified clampdown on tax evasion, previously planned reductions to corporate tax rates and robust economic growth forecasts will naturally underpin this. The construction industry will inevitably be a beneficiary of a number of these initiatives.
“However, the biggest losers today are the self-employed. The quid pro quo has come predominantly in the form of national insurance rises and loss of tax relief on dividend payments, which will leave the self-employed worst off. For an industry like construction where 40% of the workforce are self-employed (15% across the whole economy), this could be disproportionately felt and comes at a time when other measures, such as April’s changes to the IR35 regulations governing some self-employed workers, could have significant impacts on labour market dynamics in the construction industry.
“Many are calling this budget a ‘damp squib’ and no doubt there will be some disappointment in certain quarters, but could it actually have been a more subtle overall proclamation? The UK has taken stock and is poised and ready to positively face imminent challenges on the global stage.”
Paresh Raja, CEO of London-based bridging lender Market Financial Solutions:
“In what was the Chancellor’s first and last Spring Budget, one of the only causes for surprise in today’s speech was the complete lack of any announcements pertaining to the property sector. Having already unveiled its Housing White Paper last month, the Government had made it clear that it would be focusing on increasing affordable housing. Needless to say, progress in this area is essential, but building more houses alone is not enough.
“Statistics have shown that the number of first-time buyers paying Stamp Duty is at its highest level in ten years. By not introducing any reforms to this tax in the Spring Budget, the Chancellor has missed an opportunity to further enhance the UK’s globally-renowned property industry by enabling all types of property buyers – whether it’s a growing family or an investor – to purchase new homes without incurring heavy additional costs.”
Adrian Hames, UK head of infrastructure planning at WSP | Parsons Brinckerhoff
“Productivity and prudence as expected. With uncertainty over Brexit we were never expecting a spending splurge but we did get some quick wins in technology and local transport improvements. However, we can’t afford to lose sight of infrastructure’s longer term importance in boosting productivity by connecting to new schools, to the digital economy and crucially to spurring the housing market in a period of increased uncertainty. The pressure has been put back on the industry to make this case in the Housing and Industrial Strategy papers.”
“Whilst the introduction of T-levels is very much welcome for building upcoming major infrastructure projects with more young and skilled workers, these changes will take years to have an impact. The industry wants to get spades in the ground now. We have to be relentless in securing a stable pipeline of nationally significant projects that catalyse economic growth.”
Jeremy Blackburn, RICS Head of Policy said:
“Conservative female Prime Ministers have not generally been known for their support of women in the workplace. However, today Theresa May and her Chancellor have set a new precedent. When we recently polled young women, 48 per cent revealed a hope that having a new female Prime Minister would help overcome gender inequality in the workplace. That hope is now a step closer to being realised.
“These days, it’s easier to employ a ballet dancer than it is to hire some construction professionals. We are facing a construction crisis that is only going to get worse if Britain loses access to the single market. Supporting female returners to work is not just the right thing to do, it’s a large part of the solution to our productivity crisis.
“An RICS survey today reveals that 50 per cent of Britons believe that women receive fewer opportunities when they return to work after taking maternity leave, with 20 per cent saying that their CEO does nothing to drive gender equality or support women in the workplace. While the Government’s £5m pledge to support returners to work may be criticised as a drop in the ocean, the public recognition of the difficulties that many faced should not be underestimated.
“The property and construction industry is believed to be the most sexist in the UK and therefore it is critical that we encourage our firms to introduce family friendly policies and support women returning to work. Last year, RICS made a pledge to lead the way on diversity within our sector offering a package of help and support to our member firms.
“It is also right that Government is looking at the future skills pipeline. Both the housing white paper and industrial white paper have set challenging targets for the construction sector. The increased focus on STEM skills should help to drive the brightest graduates and apprentices into Britain’s booming construction industry, preventing future skills gaps.
“Of course, our sectors will only continue to grow if the Government creates a sustainable environment for business. The current proposals for business rates revaluations do not appear to be fit for purpose, and it is right that the Chancellor has heeded the concerns of businesses across the country. It is clear that a thorough evaluation is needed before any new system can be introduced.
“We have been consistent in our advice that rating periods for businesses should not exceed three years. Yet, it has been a staggering seven years since the last business rates evaluation and since then much has changed for the UK economy. Combine that with a new appeals process and transitional relief that is different from the historic 12.5% rise, and it’s all too easy to see why recent proposals have caused serious alarm.
“But once more, Philip Hammond has proved himself a man willing to listen to business, but with the detail yet to be announced it is yet to be seen how that transforms into action.”
Allan Wilén, economics director at Glenigan said:
“Today’s Budget includes a few specific measures that will be welcomed by the construction industry, including funding for a further 110 free schools and the allocation of £103 million to tackle pinch-points in the national road network in the midlands and the north of England.
“However, the stronger growth forecast for the UK economy to 2% in 2017 is likely to have a greater positive impact upon the industry’s fortunes over the coming year.
“Labour supply and skill shortages have long been a major concern for construction; an issue that has been thrown into sharper relief following the Brexit vote. The Government’s efforts to raise the status of vocational training, with the introduction of T-Levels, are a welcome step towards tackling this long term issue.”
Eddie Tuttle, Associate Director for Policy, Research and Public Affairs at the CIOB said:
“The Chancellor stated that productivity was “at the very heart” of the government’s economic plan. We are keen to work with the Government to ensure construction’s contribution to improving productivity in the wider economy is better recognised.
“We also need to fully understand just how big an industry construction is and what it supports in order to get a fuller picture about productivity – data at the moment only measures on-site work and there are huge gaps in public understanding. The National Productivity Investment Fund announced in the Chancellor’s Autumn Statement last year should be used as a lever to help understand this wider impact.
“Regional investment that adds value throughout the country is welcomed, not least to close the investment and productivity gap between London and the rest of the UK. But for this to work, investment must be tied to training and job creation. CIOB, alongside other industry bodies, will be producing a report later this year on the value of regional investment in the UK, which aims to improve the construction-related investment decisions made by policy makers.”
“We welcome the £500m increase in funding for technical education, though it is unlikely this will help reduce existing pressing skills shortages. Achieving greater parity between academic and vocational education and providing ‘work-ready’ employees is particularly crucial in construction. The offer within these ‘T-levels’ of a high quality work placement is vital; alongside further education institutes and employers, we as a professional body look forward to working with the Government to develop these qualifications.
“The importance of skilled trades and the construction industry need to be made clear: while other industries, such as manufacturing, have shed skilled workers, the construction industry maintains a third of all employment in this occupation group, and this is predicted to only grow further in the future. Skilled trades not only provide solid earnings in themselves, but provide many with an opportunity and a platform for progression within their career through to management and professional roles.”
Nicholas Harris, Chief Executive at Stonewater said:
“We welcome the Chancellor’s multi-million pound education and training provision in this Budget to boost productivity. With housebuilding currently running at around half the level needed to meet demand, this investment will help address serious skills shortages in sectors such as construction which are critical to delivering the nation’s ambitious housebuilding programme.
“We’re also pleased to see a real commitment by Government to improve adult social care services with a £2 billion investment over three years. We hope that supported housing will form part of this solution, including schemes for the elderly where providers are currently having to make efficiency savings to make up for funding cuts.”
Melanie Leech, Chief Executive of the British Property Federation, said:
“This was possibly one of the least eventful Budgets in recent memory, and we are thankful for that. The government had nothing to prove after two months of White Papers and Strategies, and the real estate industry will welcome the stability the Budget signals. We anticipated the government’s short-term relief for businesses hardest hit by the increases in business rates, but we urge the Chancellor to understand the unfairness prevailing in the appeals system. The Chancellor has two Budgets this year and he should use his second in the Autumn to also have a stock-take of some of the recent SDLT measures and whether they are having unintended consequences or inhibiting investment.”
“We welcome the Chancellor’s announcement to cap business rate increases to £50 a month for any business coming out of the small business relief bracket, as well as the £300 million fund for local authorities to give further relief to local businesses, and look forward to hearing from the government on their preferred approach for more regular valuations. However, while the government has moderated its contentious proposals on business rates appeals and the powers of the Valuation Tribunal, we continue to challenge whether they are needed at all.”
“Real estate taxes in the UK are amongst the highest in the OECD and we will continue to press the Chancellor to ensure a fair, stable and predictable tax system which will maintain investor confidence and stimulate real estate activity.”
“The Chancellor’s focus on increasing infrastructure spend will act as the backbone to regeneration up and down the country, opening sites for new housing and employment. This provides a huge vote of confidence for our industry which supports most, if not all, UK economic activity, encompassing a vast range of essential economic and social infrastructure. We provide the professionally-managed rented homes in which many people live, the commercial space in which virtually all types of businesses operate and the shopping centres, restaurants, cinemas and more in which people spend leisure time.”
Devolution to London
“It is hugely positive to see the government agree to establish a joint taskforce bringing together the GLA, TfL, London Councils, HM Treasury, Department for Transport and Department for Communities and Local Government to explore the options for piloting a Development Rights Auction Model (DRAM) on a major infrastructure project in London. However, the creation of new infrastructure funding models must be done as part of the root and branch review of CIL, and should be tested with the wider developer community to ensure that efforts to bring about more infrastructure do not become barriers to the very development they are seeking to underpin.”
“We welcome the Chancellor’s decision to defer the introduction of a payment and filing system of two weeks for SDLT. However, it is two years since the major reform of SDLT bands and the system is ripe for review, to ensure it is not leading to unintended consequences, or preventing investment. The government should use the Autumn Budget to review whether the new bands and three per cent surcharge on investments by institutions are not barriers to a housing market firing on all cylinders.”
“After failing to mention healthcare professionals in his Autumn Statement, they will be relieved they weren’t forgotten in the Budget. The promise of an additional £2bn for the adult social care system over the next three years, with £1bn of that available in the next year, will come as some relief to local authorities struggling to cope with increased levels of demand on services. It seems likely that this funding will be focused on areas facing the highest levels of delayed discharge – but with the number of spaces in care homes falling across the country as existing premises fall into obsolescence, and a lack of local authority funding meaning new developments struggle to stack up, any improvements will rely on an increase in care home development. A Green Paper on the long-term security and sustainability of the adult social care system is a sensible option, but many will no doubt be concerned this will delay providing solutions to what is a system in dire need of immediate support.
“The Budget promises to increase capital investment in A&E departments and provide more on-site GP facilities – but people visit A&E with non-urgent issues when they are unable to visit their local GP, so committing instead to increase funding for primary care would allow for cheaper, more efficient treatment of these ailments and ease the pressure on A&E.”
Paul Cook, managing director of Dukelease Properties, comments:
“This was an opportunity for the government to embellish on the recent housing white paper and provide clarity around how they plan to tackle the ongoing challenges facing the industry. However, much like last year, The Budget was noticeably lacking in its address to housing in any significant way.
“With that said, investment in associated industries, such as roads and transport, is a welcome move, specifically in the north of England and the Midlands. Good infrastructure is the keystone to successful regeneration, and a catalyst for investment. We also welcome the devolution of power to regional centres and the introduction of the Midlands Engine Strategy. These centres are best informed to make significant decisions to benefit the local community and boost economic growth.”
Esh Group chief executive Brian Manning said:
“It was disappointing the Chancellor only made passing mention of housing in the Budget speech.
“The speculative housing market is in good shape at the moment, but we need measures to ensure that will continue in the face of pressures from Brexit. It would have been encouraging to hear plans for stamp duty reductions and tax reliefs to encourage investment and give developers certainty.
“On the other hand plans to increase funding for infrastructure – as set out in the Autumn Budget – are very welcome. This will help the viability of schemes like those Esh Group delivers for private and public sector.
“We had hoped to see some action to support SMEs in the supply chain, through tax relief.
“The Chancellor’s plans for more investment in technical-focussed training routes for young people are encouraging for the construction and engineering industries, and beyond.”
Churchill Retirement Living’s Chairman & CEO Spencer McCarthy said:
“I was disappointed, but not hugely surprised to see Stamp Duty didn’t get a mention today. Removing Stamp Duty for downsizing retirees would create a real incentive to get people into homes that better fit their needs, and have a knock-on benefit for the whole housing market. The fact it’s been completely overlooked by Mr Hammond shows the Government aren’t really committed to improving housing for older people.”
Stephen Wilkinson, RTPI President said:
“Despite some welcome detail in this budget and announcements on social care investment, there was no shift in direction on existing plans to reduce public sector borrowing, which is forecast to decrease from £51.7bn in 2016/17 to £16.8bn in 2021/22. This will reduce funding to both DCLG and local government, and it remains unclear how this continued squeeze on local authority budgets will interact with the measure in the Housing White Paper to allow for a 20% increase in planning fees, which must be reinvested into planning departments. While this was a welcome announcement, there is a risk that this could be offset by reductions in the subsidy paid to planning departments by increasingly cash-strapped councils, which could hamper planners’ abilities to adequately support the infrastructure and housing development this country needs.”