The Construction Industry Coronavirus (CICV) Forum has published an in-depth report to help public bodies make decisions on where public funding in construction gives the highest economic returns to help support a green recovery.
The report, carried out by Fraser of Allander Institute at University of Strathclyde, was commissioned by the CICV Forum to improve the understanding of how investment in construction activity creates multiplier effects across social, economic, and environmental impact measures. It also aims to support policy makers, clients and investors in understanding the return on investment associated with repair and maintenance activity.
John McKinney, regional manager at the National Federation of Roofing Contractors, said: “The report highlights that investment in construction, including repairs and improvements, can play a vital role in a green recovery, and the important role Scotland’s existing buildings have in that recovery.
“We will look to highlight this report to the Scottish government and funding bodies to assist in maximising the economic and carbon benefits of investment in the built environment.”
The report highlights that the construction sector is an important contributor to the Scottish economy, supporting almost £16 billion in Scottish GVA and almost 300,000 full-time equivalent jobs across the Scottish economy through both direct and indirect and induced economic activity.
It also revealed that every million pounds spent on specialised construction activities, which includes repairs and improvements, generates £1.09 million GVA return to the Scottish economy and supports 21 full-time equivalent jobs.
VAT rebate research as part of this study, also looked at how such a scheme could stimulate the repair, maintenance and improvement element of construction work. It found that if VAT is cut from 20% to 5% in the specialised construction sector, this could generate between £80 million – £400 million in Scottish GVA and support between 1,500 – 7,500 full-time equivalent Scottish jobs.
Gordon Nelson, Scotland director of the Federation of Master Builders (FMB), said: “The FMB has been calling for a VAT cut on home improvement works for many years, and now, such a move would play a vital role in aiding a green recovery. Cutting VAT would stimulate consumer demand for domestic energy efficiency improvements and generate a welcome pipeline of works to help SMEs in the construction industry recover from the impact of COVID-19.
“Additional benefits are the protection of jobs and enabling the construction industry and SMEs in particular, to help to play their part in delivering a green recovery.”
The report can be viewed here.