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Letwin Review Praises Approach of SME House Builders

Chancellor Philip Hammond recently delivered the 2018 Budget, saying that the country’s “era of austerity” was ending. The Chartered Institute of Building (CIOB) reacted to the announcements that impacted the construction industry in particular and the economy in general.

The CIOB approved of the Chancellor’s commitment to more investment in the built environment. The £420m allocated to minor works such as potholes can begin rapidly and provide short-term improvements. Combined with a revitalised Northern Powerhouse Strategy, a commitment to more spending in the regions, and the promise of funds for high street improvements, these developments have the ability to increase employment in the construction industry.

Regional investment that adds value throughout the UK was also welcomed. Bridging the productivity and investment gap between London and the rest of Britain was needed, so the investment in the Budget was encouraging, but the CIOB warned that this funding needed to be connected to training and job creation.

The Letwin Review commented that reducing the SME apprenticeship fees to 5% (down from 10%) will be welcomed by the construction industry. The Government plan to allow customers paying levies to apply up to 25% for apprenticeship training also met with approval. In an industry dominated by subcontracting, it is important to make skills development available to those in the forefront of delivering UK infrastructure support.

While the recent announcements are unlikely to affect existing skills shortages, they do indicate a commitment to present students over 18 with an accessible choice between academic, vocational, and technical routes.

Structural Defects Insurance

Although the Budget did not provide a lot of educational funding, it did confirm a series of skills as training measures that could attract new skills and workers from other backgrounds into the sector.

The CIOB welcomed the funding to build new homes, but had questions about the plans to covert commercial properties into housing. At a time when construction quality, especially with new builds, is being scrutinised, it urged policymakers to develop these goals along with the building regulations review. The outcome has to be a partnership that increases housing stock more quickly while enabling a better standard of living for everyone.

There is no more information about the New Homes Ombudsman that had been announced earlier in November, which means that the source of funding for this initiative is still unclear and it remains uncertain how it will affect the housing agenda.

Other measures that will have an impact on the construction industry and the built environment in general include:

  • The abolition of PFI and PF2, although agreements currently in effect will continue
  • The Transforming Cities Fund rose from £1.7bn to £2.4bn
  • The prevention of VAT fraud in the construction sector’s labour provision via changes in legislation
  • Capital funding worth £38m to implement the first three T levels by 2020
  • An extra £770m to improve city transport infrastructure across the country, and further progress in the nationwide availability of full fibre broadband

Specialists in Construction Insurance

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