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Construction responds to Chancellor’s summer statement

by Jennie Ward

Chancellor’s ‘Plan for Jobs’ is widely welcomed but long-term focus is required.

The construction sector has responded to Chancellor Rishi Sunak’s Summer Economic Update – ‘A Plan for Jobs 2020’ which was announced today (8th July).

James Talman, NFRC Chief Executive, felt the Chancellor has given a lifeline to construction but feels the focus should now turn to future investment. He explained: “The Chancellor’s commitment to protect, support and create jobs is very welcome. His support package on job retention and apprenticeships will act as a lifeline for contractors and manufacturers across the roofing industry.”

James Talman, Chief Executive of the NFRC.

He continued: “I applaud his recognition for the value of the UK construction industry, in particular, and he has demonstrated this in his support for the new Construction Talent Retention Scheme. We hope this important new scheme will mean specialist contractors including roofers will be retained in the sector should there be a significant downturn, and we avoid the deluge of lost skills seen in previous recessions.”

He concluded: “While the government can support job creation in the short-term, in the long-term, jobs ultimately come from private investment. The Chancellor should now turn to taking a longer-term view of how to give commercial clients the confidence to invest. One place to start would be to reform our archaic capital allowance system on buildings and structures.”

Simon Ayers, CEO of TrustMark, focussed on the £2billion investment in green home grants, which includes a voucher scheme to improve energy efficiency of the UK’s homes and investment in the energy efficiency of social housing: “We welcome the Chancellor’s support for homeowners to carry out insulation and other retrofit measures around their homes. The only way to have a realistic chance of meeting the Government’s carbon neutral 2050 deadline is to improve the energy efficiency of the homes we already have, so this investment from the government is an important step in achieving that goal and starting the development of a long-term plan to retrofit a high percentage of the UK’s homes.

“The focus on green recovery and creating jobs, apprenticeships and momentum through other tax related areas is also good news for the construction industry, particularly small to medium sized house building and trades businesses. It will help protect jobs and create new opportunities for business to retrain and grow. Working with the sectors we will rebuild consumer confidence and support the delivery of quality work and the re-investment from the homeowner into a long-term plan for their property.

“Consumer confidence is key in getting the construction industry back up and running to full capacity, enabling it to make its full contribution to the country’s economic recovery – these measures, alongside our Work Safe, Safe Work campaign will go a long way in encouraging homeowners to have work done in and around their properties. 

“However, more needs to be done to provide new and innovative green finance options, alongside the existing products for consumers, as well as the development of a retrofit roadmap for the industry to follow, so we are working to the same goal and delivering quality work that consumers can trust. We will be working with and collaborating across the energy and construction sectors to ensure businesses are supported and consumers can rely on the traders that carry out work in and around their homes making them fit for the future.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), also welcomed the Chancellor’s announcement but cautioned the commitments must be built on to ensure that growth and jobs are sustained.

He explained: “I welcome strongly the package of measures announced today. While these initial investments will kickstart construction and training, the Government must build on these commitments in the Autumn to ensure that growth and jobs are sustained beyond next year.”

Brian Berry, Chief Executive of the FMB.

Focusing on the Green Homes Grant, Berry explained: “Grant-funded vouchers are a step in the right direction to launching the retrofit market, and supporting consumers to build with confidence after the pandemic. We hope at the Autumn Budget the Chancellor will bring forward the rest of the £9.2bn manifesto commitment, and support the development of private finance initiatives that will ensure the market grows in a sustainable way. We have an army of local builders ready to deliver these works to a high standard, provide local employment, and generate economic activity in each corner of the UK. The Chancellor has demonstrated his willingness to introduce targeted, temporary cuts in VAT. We hope he will retain, as a possibility, a cut to 5% for home improvement works to further boost demand.”

Whilst on the support for jobs retention and creation he stated: “The schemes underpinning job retention and traineeship and apprenticeship guarantees are welcome news for construction, which has persistently struggled to hire into key trades like bricklaying and carpentry. The Chancellor is right to highlight the need for a new generation of talent, and support should be directed toward this strategic industry. That 71% of apprentices in construction are trained by local builders, and typically over a three-year period, means the scheme must be accessible to small to medium-sized firms (SMEs). Converting these short-term measures into long-term jobs requires careful matching of individuals to the right firm. While we train the tradespeople of tomorrow, it’s great news for SME construction firms that they will be able to access the new Talent Retention Scheme to reduce the risk of redundancy. This will protect against a repeat of the severe job losses experienced by construction during the last recession.”

Julie Hirigoyen, Chief Executive at UKGBC.

Julie Hirigoyen, Chief Executive at UK Green Building Council (UKGBC) called for detail and clarification of how the Green Homes Grant scheme will be implemented so we can “avoid the mistakes of previous retrofit schemes”. She explained: “The Chancellor has recognised the huge potential of energy efficiency to create jobs, and the moneyannounced today for upgrading buildings is a much needed first step.

“In respect of homes, we urgently need more detail on how the Green Homes Grant scheme will be implemented. Done well it has the potential to kickstart a retrofit revolution across the country, but, done badly, this could cause more harm than good to people’s homes and to the industry. It’s crucial to avoid the mistakes of previous retrofit schemes by ensuring that all measures and installers under the scheme are properly accredited and deliver real improvements. The allocation of £50m to social housing is also a welcome announcement, although frankly just a drop in the ocean compared with the Conservative manifesto commitment of a £3.8bn Social Housing Decarbonisation Fund – far more of which should be brought forward immediately

“Furthermore, given that today’s announcement contained a range of financial incentives and tax cuts, it missed the opportunity of tying these in more directly with the green buildings agenda. UKGBC has previously called for a VAT cut on refurbishments and variable stamp duty rates as incentives to drive up consumer appetite for more efficient homes, which would stimulate demand for these cash grants.

“Finally, we urgently need confirmation that today’s announcements are part of a clear, long-term and ambitious plan to bring all our 29m homes and circa 2m commercial buildings up to decent standards of efficiency. Such a plan would include target dates for minimum energy efficiency standards across all property types, and a range of policy and fiscal measures to ensure these can be met. This is not only vital to reaching net zero, but also for ensuring that industry, and the supply chain in particular, can gear up and invest in both the skills and innovations required.”

View the summer statement here

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