The NFB today called on the Chancellor to ensure that measures in the forthcoming budget will ensure that the construction industry is able to boost the economy from the bottom up.
While official statistics and industry forecasts show that while the outlook is positive for the construction industry, particularly in the private housebuilding sector, total output has shrunk by 6% since 2008. Construction companies, particularly SMEs, have been hardest hit by the recent downturn with around 21,000 going into bankruptcy or liquidation since the first quarter of 2009.
As the National Federation of Builders (NFB) sets out in the key recommendations for the Chancellor, it is the view that all sides of the industry should be reflected in the budget statement. It is our hope that the industry will receive a high profile in the 2014 budget and that the chancellor’s will make infrastructure, finance for small businesses and housing renovation and repair key government priorities.
Julia Evans, chief executive of the NFB, said:
“The NFB is pleased that construction remains high on the government’s agenda, but the chancellor needs to find the missing pieces of the puzzle if he wants to achieve growth across all sides of the industry. Construction companies saw the highest number of total liquidations of any sector in 2013, with SMEs hardest hit. The Treasury should adopt the key measures set out by the NFB to ensure that the industry can power the economy from the bottom up”.
The NFBs three key priorities are:
Infrastructure and house building
The chancellor must set out a clear timetable on when any future asset sales will materialise into new infrastructure projects in order to drive up industry confidence and boost investment. The NFB is also calling for the government to make housing schemes of over 1,000 units, a Nationally Significant Infrastructure Project (NSIP) in order to speed up the planning process and give developers and their subcontractors more clarity on future work.
Access to finance for SMEs
The NFB is calling for the Treasury to ensure that the British Business Bank will provide SMEs with the finance they need to grow. They are calling for the chancellor to ensure that the regulatory framework will allow alternative finance providers to flourish and provide competition to high street banks. A further boost to the bank would be welcomed but it must ensure that it reaches the companies intended.
Cutting VAT on housing renovation and repair from 20% to 5%
An independent 2014 Experian report shows that this measure could boost the UK economy by more than £15 billion from 2015 to 2020. This reduction in tax could also create more than 95,000 jobs, save 240,000 tonnes of CO2 and bring thousands of empty homes back into use. Such a measure would help restore output to pre-crisis levels and help the industry grow through a consumer-led bottom up approach. This measure would provide a much needed boost to thousands of contractors as well as the wider economy and provide a means to train the workforce to reduce the skills gap.