Philip Hammond, chancellor of the exchequer, delivered his first Spring Statement to the House of Commons on March 13, 2018.
The chancellor reported on economic forecasts published by the Office of Budget Responsibility, which reported higher than expected Gross Domestic Product growth of 1.7% in 2017 and 1.5% 2018. However, economic growth is set to remain under 1.5% between 2018 and 2022.
On skills, the chancellor pledged £500 million for the rolling out of T-levels and another £50 million to ensure T-level work placements. In addition, the government will also make £80 million available for those SMEs “engaging an apprentice”.
On housing and planning, the chancellor announced the government’s pledge to make £44 billion available to bring housing supply to 300,000 units per year by the mid-2020s, as well as £1.7 billion to build 26,000 new affordable homes in London.
RCI received a number of comments from the industry:
The House Builders Association (HBA) – the house building division of the National Federation of Builders (NFB) – believes that the government has identified the key ingredients to tackling the housing crisis, but not the implementation strategy to put them into effect.
According to the HBA, the government has provided significant financial support towards tackling late payment, skills shortages and housing supply, but not a common thread aimed at solving the housing crisis. The association believes that the chancellor’s statement to bring annual housebuilding to 300,000 units by the mid-2020s also “denotes a lack of urgency”.
Richard Beresford, chief executive of the NFB, said: “If the chancellor is serious about reaching 300,000 housing units per year, supporting apprenticeships and diversifying educational achievement through T-levels, then he will need SME housebuilders and constructors. SMEs not only train and retain two thirds of construction apprentices, but they are our predominant private sector and rural employer. Government must deliver bolder planning reform, fairer procurement, and a better understanding of the entire development process if it has any hope of making a success of today’s (March 13) announcements.”
Meanwhile, according to the Federation of Master Builders (FMB), the chancellor’s announcement of a new consultation on late payment should be the beginning of the end for unfair payment practices, which hit small businesses across the UK.
Brian Berry, chief executive of the FMB, said: “The chancellor’s announcement of a consultation to tackle the scourge of late payment should mark a turning point on this issue. We should use this opportunity to bring about a spring clean of payment practices, which negatively impact on small business.
“Construction giant Carillion’s collapse at the start of the year brought to light once again the need to eliminate poor payment practises that plague the construction sector particularly. Indeed, one London-based small building firm was once paid more than 270 days late by a construction giant. Now is the time to move away from these unsustainable business models, which threaten the existence of many firms and their supply chains. This announcement should be followed by a fundamental rethink ending in the permanent abolition of late payment terms and the exploitative use of retention payments.”
The announcement of a doubling of funding to the Lloyd’s Housing Growth Partnership, and an additional £80 million funding to support SME firms looking to engage an apprentice is “welcome news”, according to Brian.
He said: “With Brexit looming large on the horizon and the construction industry facing a chronic skills crisis, it’s of the utmost importance that more skilled workers begin to join the sector. An additional £50 million to support T level training will further aid this aim.”
John Newcomb, chief executive of the Builders Merchants Federation (BMF), added: “The BMF is pleased to see the government focus its attention on tackling the issue of late payments, which is a big issue for our members. The collapse of Carillion gave a clear indication of how vulnerable suppliers can be to their customers and we support measures that minimise these risks to our members in the future. In order to keep Britain building and delivering the building blocks for growth, it is vital that merchants are paid quickly.”
Reiterating other positive changes announced in the Spring Statement, John mentioned how the new £80 million funding to support SME companies looking to take on an apprentice, and an additional £50 million to support T level funding will hopefully encourage new apprentices to join the sector and “drive this forward”.
