In response to the Chancellor of the Exchequer Rishi Sunak’s summer economic update today (8 July), announcing a £2 billion investment in a ‘Green Homes Grant’ initiative from September, which includes a voucher scheme to improve the energy efficiency of UK homes, as well as investment in revamping the energy efficiency of public buildings and social housing, and the launch of the ‘Construction Talent Retention Scheme’, below is a selection of comments RCI received in response to the above from across the construction industry.
Broadly speaking, the Chancellor’s proposals have been well received, although some would have liked him to have gone further, perhaps extending the Help to Buy scheme or reducing VAT on domestic construction work.
Industry reaction to the Green Homes Grant scheme
Simon Ayers, chief executive of TrustMark, welcomes the Chancellor’s support for homeowners to carry out insulation and other retrofit measures around their homes. He said: “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 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.”
Simon continued: “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.”
Neil Marshall, an energy efficiency consultant, believes the Green Homes Grant scheme is an “exciting, ambitious and bold move by the government.”
However, Neil believes it’s imperative that the scheme is designed “robustly” and that lessons are learnt from the failed Green Deal Home Improvement Fund, which ran in 2015/2016, with the grant funding running out in hours, with fraudulent claims made and many poor quality installations carried out.
According to Neil, to ensure the success of the Green Homes Grant scheme, the following things need to happen:
1. The creation of an independent Green Homes Grant advisory board, which will be responsible for advising the government on the scheme design, implementation, and monitoring. The board should comprise independent experts who understand the energy efficiency sector, but who are not directly employed within it to avoid any risk of commercial or vested interest occurring.
2. The implementation of a robust installer accreditation and registration network. With an increase in industry capacity needed to install measures under the scheme, it is essential that the quality is controlled through accredited installers and steps are taken to prevent an influx of new entrants who lack the skills or experience to do the work properly. Therefore, only installers who are accredited and registered under the government-backed Trustmark Installer Quality Scheme should be permitted to carry out work, and new entrants and operatives must be subject to robust ‘carding’ and auditing.
3. To target the support of those who are most in need, the funds must be targeted at the millions of people suffering the blight of fuel poverty, and those households who do not currently receive any support to fund measures, including owner occupiers and tenants in the private rented sector.
Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson, says the decision not to extend the VAT cut to the construction sector was a mistake, and will cause further pain to an already battered industry.
She said: “Although the new planning regulations the government is preparing are very good news for the construction sector, the prospects for the industry would have looked better if the Chancellor had complemented them with a VAT cut. Taken together, lower costs and greater flexibility could have created a boom in home extension projects, particularly as interest rates are low. This would have been a lifeline for SMEs, creating a surge in small projects that could have been started quickly and reinforcing cashflow. But all of this has now been missed.
“The Stamp Duty Land Tax (SDLT) exemption is a really good move on paper, as it encourages first-time buyers and those looking to upscale to take the plunge and enter the property market. It also creates an opportunity for downsizing. The real question is whether this move stimulates action and purchases, rather than just an increase in website traffic.”
Brendan continued: “Lenders will be looking for higher deposits to protect themselves against falling values, which are now likely given the predicted rise in unemployment. In normal times, today’s SDLT announcement would be a great opportunity and would bring joy to housebuilders. We have to hope that in these unusual times this will still prove to be the case.”
“The £3 billion investment in green jobs is a great boon for the sector. The only concern is whether the work can be spread around. Jobs created through green projects do sometimes favour larger companies, who are better at advertising for them and meeting regulating requirements. It would be a shame if SMEs missed out on the majority of jobs created this way.”
Brian Berry, chief executive of the Federation of Master Builders (FMB), strongly welcomes the package of measures announced by the government, but warns that 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.”
On the Green Homes Grant, Brian said: “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 £9.2 billion 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.”
Industry reaction to the Construction Talent Retention Scheme
The Construction Talent Retention Scheme is a partnership between the government and the industry to secure essential talent in the UK construction sector.
Run by the Construction Leadership Council (CLC), the Scheme is designed to keep skills in the sector, matching displaced workers with employers who are seeking new staff.
Businesses can register their interest in the Construction Talent Retention Scheme by visiting: www.trs-system.co.uk/construction.
The Builders Merchants Federation (BMF) has expressed its full support for a number of measures to secure jobs within the construction industry announced within the Chancellor’s statement today.
Speaking about the Construction Talent Retention Scheme, John Newcomb, chief executive of the BMF, said: “COVID-19 has already had an impact and we are seeing businesses having to reduce their workforce. We need to keep the skills built up over many years within the industry in order to secure construction’s long-term recovery.
“The Construction Talent Retention Scheme, alongside the financial measures announced by the Chancellor to encourage businesses to employ and train young people and provide quality apprenticeships, will help to retain our talent base and redeploy their skills across the entire sector, as well as well moving to secure the future by investing in the next generation.”
John added: “This is a proven programme, with no cost for users, that is supported by the entire construction industry bringing significant scope and scale to its successful delivery. We will be promoting the Construction Talent Retention Scheme online portal extensively within the building materials sector, and will be encouraging BMF merchant and supplier members to register their interest so they are fully up to speed when the portal goes live.”
Meanwhile commenting on the Chancellor’s ‘Plan for Jobs’, James Talman, chief executive of the NFRC, said: “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.
“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 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”
James continued: “We tentatively support the Green Homes Grant, but the devil will be in the detail. All those undertaking retrofit work should be sufficiently trained and accredited to avoid the mistakes of previous schemes. The government should use existing programmes such as CompetentRoofer and RoofCERT to identify quality roofers for roof associated works. We do feel that an opportunity was missed to not include low carbon energy construction solutions such as solar, too.
“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.”
On the support for jobs retention and creation, Brian Berry, chief executive of the FMB, said: “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 Construction 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.”
