The Chartered Institute of Building (CIOB) has welcomed 2021 Budget measures to help construction businesses recover from the pandemic, but criticised the lack of environmental measures.
Welcoming the support measures, the CIOB highlighted the fact that 244,100 construction workers are still on furlough, with the top 50 contractors claiming £1.1m in December alone. The furlough scheme has been extended until September.
It also hailed a new recovery loan scheme, which will see the government back loans up to £10m for businesses, and an extension of the Self-employment Income Support Scheme, under which 747,000 people in construction have made a claim so far.
It added that it was hopeful that the ‘super-deduction’ tax incentive for companies investing in plant and machinery, announced by Chancellor Rishi Sunak will provide a “valuable boost” for struggling construction firms.
There was praise too for Sunak’s announcement that the Stamp Duty Land Tax holiday will be extended to 30 June for homes under £500,000, and the nil-rate band extended to homes under £250,000 until 30 September 2021. The Stamp Duty holiday has provided “essential support” to housebuilders and propped up the housing market throughout the pandemic and comes after CIOB joined the Construction Leadership Council in calling for the holiday to be extended, it said.
But in other areas, the CIOB voiced concern.
It said the government had “missed an important opportunity” to strengthen the impact of its investment in covid-19 support measures by failing to suspend the implementation of the Construction Services Domestic Reverse Charge (also known as the VAT reverse charge).
The CIOB added: “Coupled with changes to IR35 which will significantly increase the administrative burden placed on construction businesses, this charge threatens to severely restrict cash flow to those lower in the supply chain, hitting small and medium sized firms the hardest at a time when many are already at risk of insolvency.” It called on the government to withdraw the charge.
Meanwhile, it said it was also concerned by the lack of any measures to address the environmental impact of the built environment within the Budget. The CIOB said: “Significant and urgent action must be taken to decarbonise the built environment if we are to meet net zero by 2050, yet recurring failed policies continue to deplete the time we have left to address the climate emergency. It is therefore vital that any measures to address built environment emissions are designed in conjunction with the sector to ensure their successful delivery.“
The CIOB has been calling for national retrofit strategy to help create stable, green jobs beyond 2022. It said it wanted to see a move away from a “piecemeal approach” towards a “coherent and sustained programme of activity” to improve the energy efficiency of our buildings.
The CIOB also welcomed the allocation within the Budget of £12bn initial capitalisation for a new National Infrastructure Bank and urged the government to use this bank to prioritise funding for a national retrofit strategy, to demonstrate global leadership on climate change as it prepares to host COP26.
Eddie Tuttle, director for policy, external affairs & research at the CIOB, said: “The construction sector has relied upon covid-19 support schemes over the past year in order to keep building. We are pleased to see that the Chancellor has extended the self-employment scheme to the end of September to offer certainty to businesses in the sector as well as protect the large numbers of newly self-employed construction workers.
"However, we are concerned that the government has missed an opportunity to truly support the industry by failing to suspend the implementation of the VAT reverse charge, which will have potentially severe consequences for the cash flow of firms that have been hit hardest by lockdown.
"Perhaps most disappointing is the complete lack of mention of decarbonisation of the built environment and absence of any reference in the Budget to the struggling Green Homes Grant scheme. The UK’s built environment accounts for approximately 40% of our total carbon emissions, and any attempt to forge a green industrial revolution must address the energy efficiency of buildings as a matter of priority if it is to succeed.”
