Budget 2021 and Industry Response

James Talman, CEO NFRC

Chief Executive of NFRC (National Federation of Roofing Contractors), James Talman said: “We are delighted that the Chancellor has listened to our calls to exempt plant and machinery used in onsite renewable energy generation and storage from business rates. The business rates system currently discourages investment in commercial rooftop solar PV, taking up 40 per cent of any potential cost savings.

“Commercial rooftop solar has huge potential—according to Solar Energy UK there are over 250,000 hectares of south-facing commercial roof space in the UK that could be used to deploy 30 GW of solar power, creating 2,600 green jobs a year. Today’s announcement will help make this a reality.

“We also welcome the Chancellor’s Business Rate Improvement Relief which will allow businesses to make property improvements and pay no extra relief for 12 months, and we look forward to seeing further details on what measures this will cover. We would also urge the Treasury to monitor the implementation of these business rate changes carefully to ensure that there isn’t a stagnation in investment whilst building owners wait until 2023.

“It was also good to see investment in training bootcamps and facilities for HGV drivers—the construction supply chain has been badly hit by HGV driver shortages, intensifying the material shortages the industry is facing.”

Brian Berry, COE Federation of Master Builders (FMB)

However, the Chancellor has faced criticism from across the construction industry for the lack of a retrofit plan. Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said: “The Chancellor has missed the opportunity to give householders peace of mind about how they can tackle the net zero challenge. With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes.

“I do, however, welcome the investment for skills and training confirmed at £3.8bn over this Parliament. Long-term skills shortages are delaying jobs for builders, with 60% reporting paused jobs in the latest FMB membership survey. I’m also glad to see further investment in housing, and warmly welcome the grant funding for local authorities to free-up small brownfield sites for housing given that land availability is the major obstacle to SME house builders. Relief for businesses by reducing the burden of the business rates system will be well received by some firms.”

Steve Radley, CITB Policy Director

Responding, Construction Industry Training Board (CITB) Policy Director Steve Radley said: “Today’s large-scale investments in T levels, maths, Skills Bootcamps and modernising Further Education will provide crucial support on skills and should help to ease pressure on employers looking to recruit and train. Building better pathways into work through traineeships and bootcamps and helping colleges to modernise are key investments. We look forward to building on our work so far to shape these programmes to deliver the skills the industry needs.”

“While the next phase of business rates relief is welcome, this seemingly endless tinkering underlines the need for a longer-term reform to support high streets and help restore them into the thriving commercial centres that communities want to be proud of. The devil will be in the detail and our surveyors will need clear, unambiguous guidance from government to help businesses to make the most of this new support.

“Chancellor Sunak didn’t mention the need to retrofit, rather than demolish, existing buildings – a key to unlocking Net Zero carbon emissions for construction in Britain – but the £3.9bn pledged to decarbonise homes and offices, which included support for low income homeowners to transition their heating, is a good start.

“The £5bn for cladding replacement – which we already knew was coming since February – will give more leaseholders greater peace of mind that their homes will be made safe but it’s still well short of the £15bn needed that is estimated to fix every building, but the additional funding to deliver a hundred and eighty thousand much needed affordable homes is welcome.”

Brendan Sharkey, Partner at MHA

Brendan Sharkey, partner at MHA, says: “The money earmarked for roads, railways, schools and hospitals is what the construction industry hoped for. It is especially encouraging that the levelling up programme spreads the benefit around the UK. The extension of the annual investment allowance (AIA) relief of 100% on capital expenditure of £1m will also be a big boost to construction firms.

“However, most of this – aside from the AIA extension – serves to boost demand but does nothing about supply, which remains a major issue. The Chancellor can’t do much about the cost of materials but he can do something about labour. He recognised the value of people with certain skills coming to the UK but it is unclear (and unlikely) the new visa system will do much for the construction sector.

“Two-year visas for key construction workers would have been the single best thing he could have done to address the shortage of labour in the industry. The fear must be that all of his investment promises won’t go as far as he would like but will instead just push up costs because business can’t source the labour.

“Over the long term the funding promised for T-levels and other programmes should help. Here construction has an opportunity to secure a workforce of the future. The industry needs to support these initiatives by sponsoring training with visits to construction sites, open days and work experience. Construction needs to assert itself as a career destination for young people because, for political reasons, labour from overseas looks less of an option.”