Level 3 BIM
The full text of the Budget included a reference to the government developing “the next digital standard for the construction sector – Building Information Modelling 3 – to save owners of built assets billions of pounds a year in unnecessary costs, and maintain the UK’s global leadership in digital construction”.
Eddie Tuttle, principal policy and public affairs manager at the CIOB, said: “We are pleased with the government’s commitment to continue to develop the next digital standard for the construction sector – BIM Level. BIM Level 2 becomes mandatory on central government contracts from 4 April 2016 and CIOB is continuing to inform and educate companies and their workforces on the benefits BIM brings.”
Academisation
Osborne announced that all schools in England remaining under local authority control (thought to be just 30% of the total) would be expected to become academies by 2020.
Richard Beresford, chief executive of the National Federation of Builders, said: “Schools are at the heart of their communities. SMEs have their communities at heart, employing, training and spending locally. Converting schools to academies will put control where there is more awareness of local need, including around school building and maintenance.
“The NFB has produced research that shows how a lack of SME involvement in school building programmes means that taxpayers are denied value for money.”
Alan Wilen, economics director at Glenigan, said: “More uncertain is the potential impact of government plans for all English local authority schools to become academies by 2022. The planned reorganisation of the education sector may threaten and delay current planned investment in school facilities. In particular, the government will need to ensure that the move to the new regime still delivers the additional school places required to accommodate rising pupil numbers over the next six years.”
Apprenticeships
Despite expectations that the Budget speech would contain more detail on the workings of the forthcoming apprenticeship levy, it simply confirmed that the levy would be introduced in April 2017, and that “employers that are committed to training would get more out than they put it in”.
Iain McIlwee, chief executive of the British Woodworking Federation, said: “With pressing skills shortages we need to stop dithering on apprentices. The lack of any further clarifications on how the levy will work is a disappointment. More maths in schools can only be a good thing, but how about some structured careers support? The aspirational 3 million apprentice starts needs to be targeted and nurtured effectively to add up to 3 million productive workers.”
Eddie Tuttle, principal policy and public affairs manager at the CIOB, said: “With output in the construction sector forecast to grow annually at a rate of 2.9% until 2030, employers must be given the confidence to engage with the government’s apprenticeship levy and invest in workplace training.
“We believe the target of delivering 3 million apprenticeships by 2020 is a tall order for industry and are clear that quality must not be compromised in the interests of numbers. However, it was disappointing to not receive further clarity on the apprenticeship levy and how this will work alongside the existing CITB Levy.”
Tax cuts for small businesses
The Budget promised to cut the rate of corporation tax to 17% in 2020, benefiting more than one million companies, large and small, and cut business rates for all properties in England, with 600,000 small firms paying no rates.
Eddie Tuttle, principal policy and public affairs manager at the CIOB, said: “Today the chancellor delivered a business friendly Budget, particularly for small and medium-sized enterprises. Around 600,000 SMEs will benefit from having to pay no business rates at all, while 250,000 SMEs will pay reduced rates. These measures, on top of greater support for the self-employed, make positive reading for the many SMEs and microbusinesses active in the construction sector.”
Melanie Leech, chief executive of the British Property Federation, commented: “The reform to small business rate relief is one of the most generous aspects of an otherwise revenue raising budget and to be welcomed as small businesses are often the lifeblood of local economies.
“We are pleased that the government has also recognised that the annual uplift in rates should be based on the government’s own preferred measure of inflation – CPI rather than RPI. This will be tinged with disappointment, however, that it won’t come into effect until 2020, and thus for larger businesses who are struggling any rates relief will be a long time coming.”
Energy tax reforms
The government announced that it would abolish the Carbon Reduction Commitment following the 2018/19 compliance year. The government said it was “bureaucratic and burdensome” and would be replaced “in a revenue neutral way”, with an increase in the Climate Change Levy from 2019.
David Symons, WSP Parsons Brinckerhoff environmental director, said: “Simplifying energy taxes is welcome – abolishing CRC helps business cut bureaucracy and energy use at the same time. CRC lost much of its interest to senior managers once the revenue recycling elements of the scheme were removed. Abolishing it is the right thing to do, although the only surprise is that it’s still around until 2019.
“We were never expecting green-friendly policies to dominate, but seeing so little so soon after the Paris agreement still feels like a missed opportunity. Once again, this Budget shows it’s difficult to balance climate leadership, protect UK oil and gas jobs, and eliminate the deficit.”
Julie Hirigoyen, chief executive of the UK Green Building Council, said: “The emphasis in the Budget is on energy taxation at the expense of carbon pricing – in a so-called attempt to ‘protect businesses’. Yet our membership demonstrates the willingness of business to take action on climate change, not for altruistic reasons but because it is now a commercial imperative to do so.
“While we support the chancellor’s desire to streamline the business energy tax landscape, this must not come at the expense of ambition. Effective regulatory drivers and reporting frameworks can reduce the burden on businesses, cut their energy costs, and ensure their long-term survival.”
Fuel Duty
The Budget contained a further freeze to fuel duty, which the government claimed would mean “the average small business with a van saves £12 each time they fill their tank compared to the fuel escalator plans in place before 2010”.
Diana Montgomery, chief executive of the Construction Products Association, said: “The freeze on fuel duty will certainly be appreciated by our members distributing construction products up and down the UK.”
Crossrail 2
The Budget announced the acceptance of the NIC’s recommendation to give the green light for Crossrail 2 to proceed to the next stage. It will provide £80m to fund development work, but Transport for London has to match that sum with the aim of “depositing a Hybrid Bill within this Parliament”.
Charles Clarke, partner in the planning and infrastructure department at law firm Bircham Dyson Bell, said: “The government has set some challenging targets for promoters of major projects to get funding from sources other than direct contributions from central government, especially Transport for London, who had their resource grant cut in last year’s autumn statement.
“Government has now invited TfL to bring forward proposals for financing infrastructure projects. We expect to see some innovative funding solutions coming forward for future projects, and hope government will be receptive to them, if it wants to see these projects delivered.”
