On 25 November 2020, the Chancellor set out the Government’s plans for investment in 2021. While a significant amount of resource will understandably be dedicated to tackling the coronavirus pandemic, supporting economic recovery is also high on the Government’s agenda.
This blog sets out what the Spending Review means for Master Builders and how the Chancellor could have gone further in his support for the industry to ‘build back better’.
The Government wants to see 300,000 new homes built each year by 2024, but we are currently falling quite far short of that target. To help small to medium-sized (SME) house builders play their part, the Chancellor announced extra funding as part of the ‘National House Building Fund’. This pot will be available to SMEs in England who can make a bid to Homes England.
The Chancellor’s plans also include a ‘Help to Build’ scheme for self and custom builders. The FMB called for this to help grow this sector and help more people work with Master Builders to build their own home.
Skills and training
Job creation is a key priority, given the ongoing economic impact of the coronavirus. The skills shortage in construction means that apprenticeships offer a solution to rising unemployment. The FMB welcomed the Chancellor’s commitments to improve the apprenticeships system and make the UK Apprenticeship Levy more flexible.
From April 2021, a new approach to apprenticeships that recognises relevant training or learning the apprentice may already have done, will be trialled in construction.
Tackling climate change
Although the Chancellor didn’t mention the need to tackle climate change in his speech, the Government did confirm its longer-term commitment to the Green Homes Grant scheme as the FMB had said it should, as part of the National Infrastructure Strategy. This strategy was published on the same day and contains a reference to the Future Homes Standard, which will introduce tighter energy efficiency requirements for new build homes from as early as 2023.
High street regeneration
The Government is continuing its investment in the ‘Towns Fund’, which provides funding to regenerate high streets and town centres. Upgrading and converting vacant or rundown commercial spaces into new residential units represents an important programme of work for Master Builders. The FMB has been lobbying for greater investment to be directed to local authorities for this purpose. Around 100 local authorities have now received investment, averaging £2 million per town.
The UK Shared Prosperity Fund is a new scheme that will prioritise investment in people, skills, communities, place, and local business around the UK.
What was missing?
The FMB called on the Government to help the construction industry build back better by tackling late payment culture. Improving payment practices as well as tackling the abuse of retentions would help construction SMEs to reinvest in their businesses and adapt to the ‘new normal’. Without stricter measures, builders will continue to spend significant resources on chasing late payment. The FMB will continue lobbying the Government to fix this issue.
With Brexit on the horizon, the Chancellor missed an opportunity to reassure the business community that the end of the Brexit transition period would not mean small firms facing a cliff-edge. We know that Master Builders are facing material shortages and cost increases, so the Government must ensure that builders do not product shortages or disproportionate costs from 1 January 2021.