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Sun April 11 2021

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Summer Budget 15: Construction’s response

9 Jul 15 Construction has welcomed a number of measures outlined in yesterday’s Budget while lamenting that other issues were not addressed too.

Topics covered in the Budget included roads funding, apprenticeships and the living wage but there were criticisms that more should have been said about housing supply (link opens in new tab).

And the opportunity could have been taken to tackle energy efficiency in homes, said the Federation of Master Builders (FMB). The government is refusing to address a major source of carbon emissions, according to the FMB. It called on the government to make existing homes a national infrastructure investment priority. Chief executive Brian Berry said: “The construction industry is at a loss as to why the Government is ignoring the need to improve our current housing stock. By refusing to acknowledge the importance of these improvements, the Government is exacerbating problems such as high household fuel bills, carbon emissions and the national housing shortage.”

Without tackling the energy inefficiency of our housing stock, the government is not taking cutting carbon emissions seriously, he added. “Making our existing homes a national infrastructure priority, re-directing carbon taxes, putting an energy efficiency financing framework in place and reducing VAT on housing renovation and repair work from 20% to 5% are all effective and implementable measures.”

Measures outlined in the Summer Budget could potentially have a long-term impact on the industry, said Simon Rawlinson, head of strategic research at EC Harris, part of Arcadis. As well as referring to apprenticeships and the National Living wage and housing, he said that other issues that could have a disproportionate impact on construction include the reform to dividend tax credits, which may make some company-based self-employment structures less lucrative – and as a result – labour more expensive.

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WSP Parsons Brinckerhoff’s Mark Naysmith said that the Budget was a mixed bag for the industry. “The start of a new Parliament is a significant opportunity for the Government to present an ambitious programme to take the UK forward. On the one hand we welcome the priority that has been given to essential infrastructure funding and apprenticeships. It’s great to see more attention for tackling the skills shortage, so that industry and the supply chain have the capacity to deliver on projects. On the other hand we still lack a coherent vision for how we are going to build our way out of a housing crisis. The stakes are high. The nation’s need for new housing and infrastructure remains urgent and we should already be looking beyond where Crossrail 2 and HS3 might go, and how this will drive associated developments.”

Civil Engineering Contractors Association chief executive Alasdair Reisner said: “The Chancellor has today rightly focused on how the UK can improve the productivity of UK businesses as a means to safeguard and build a stronger economy.” He added that the most direct way for the chancellor to harness improved productivity is through the continuing investment in the country’s transport networks. CECA’s research shows that, since 2000, the global economies that invested most in their transport networks are those that have seen the biggest productivity gains.

“We call for the Chancellor to continue his focus on transport investment, helping the UK to show the way to the rest of the world to drive up productivity.”

Institution of Civil Engineers (ICE) director general Nick Baveystock said: “The renewed commitment to the northern powerhouse, and efforts made to identify new ways to fund local roads are encouraging.  The Chancellor is absolutely right; Government must be bold in its commitment to infrastructure if the UK is to achieve a rebalanced economy, increase productivity and maintain our competitive edge.  We hope this also translates into bold decisions on aviation capacity, resilience and our future energy mix.”

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