We round up key points for construction from yesterday
Skills
The headline: The budget included £500m to shake up further education and introduce so-called T’levels to put vocational training on a par with A-levels. There was also the introduction of maintenance loans for students doing higher level technical qualifications.
What they said:
The CIOB’s head of policy Eddie Tuttle said: “We welcome the £500m increase in funding for technical education, though it is unlikely this will help reduce existing pressing skills shortages. Achieving greater parity between academic and vocational education and providing ‘work-ready’ employees is particularly crucial in construction. The offer within these ‘T-levels’ of a high quality work placement is vital; alongside further education institutes and employers, we as a professional body look forward to working with the government to develop these qualifications.
“The importance of skilled trades and the construction industry need to be made clear: while other industries, such as manufacturing, have shed skilled workers, the construction industry maintains a third of all employment in this occupation group, and this is predicted to only grow further in the future. Skilled trades not only provide solid earnings in themselves, but provide many with an opportunity and a platform for progression within their career through to management and professional roles.”
Karen Jones, HR director at Redrow, said: “The chancellor has hit the nail on the head: technical educational routes are not second-rate options. We therefore welcome the introduction of T-levels and the additional investment in technical students, which will enhance and bolster the construction sector workforce.
“The skills gap represents a significant challenge, and yesterday’s announcement should be just one part of a better and more collaborative strategy between industry, government and the education system.
“I am particularly interested to see how this change will be embedded in schools. We have found that schools are not currently delivering the breadth and depth of careers advice necessary for young people to make informed choices.”
Jason Ruddle, COO at Elecosoft, said: “We welcome the commitment to support increased technical training to help meet the construction skills gap which may be looming in the post-Brexit period. As the government develops its detailed educational plans, we urge it to integrate digital construction and engineering skills and tools into schools, in addition to promoting other practical technical and building skills.
“It should be considering how to engage new entrants as digital change drivers, for a sector which is falling far behind others in terms of digital competitiveness and efficiency. One aspect of this must be familiarity with modern digital tools, as well as modern methods of construction.
“For T-levels to be meaningful in this key industry, they must help to create a new generation of digitally-aware construction and engineering professionals with a mandate and desire to play a role in transformation, and create a more efficient and productive sector.
“That means that vocational software, such as sector-specialist planning and project management software, optimised for BIM and digital projects, must be brought into schools, rather than such exposure starting only at college degree level or in the workplace, as currently. Elecosoft already actively supports colleges and Universities, and will be looking for opportunities to support the new T-level construction curriculum as it evolves.”
Richard Laudy, global head of infrastructure at Pinsent Masons, commented: “The government’s announcement regarding technical education reforms is to be welcomed, but it is a drop in the ocean and will not meet the skills crisis facing the UK infrastructure sector.
“The sector is still yet to recover fully from the 400,000 construction jobs lost in the recession and has an ageing workforce, 30% being over the age 50 and around 700,000 set to retire in the next 10 years. And yet demand is only increasing. The UK needs to bring in an additional 36,000 workers every year to meet the demands created by our infrastructure programme.
“Government and industry should collaborate, map the skills required to deliver our infrastructure and prioritise them within any post-Brexit immigration system. So whilst the chancellor’s announcement is to be welcomed, the government needs to go further.”
New school building
Headline: The Budget included funding for 140 new free schools – including grammars – and pledged £320m. And £216m extra was also found for maintenance and rebuilding.
What they said:
Mark Robinson, chief executive of Scape, said: “Funding for new school buildings and refurbishments is always welcome, however, 140 new schools is a mere drop in the ocean of what is actually needed to meet rapidly rising pupil numbers. Our report, The School Places Challenge, showed that the government may need to create over 2,200 new schools by 2020 to house 730,000 extra pupils. That’s 24,000 new classrooms.
“The government’s decision to prioritise grammar schools is a highly inefficient use of resources, because there are thousands of fantastic comprehensive schools that already have the infrastructure in place, and could easily create extra capacity though classroom extensions.
“Instead the government is proposing to build entirely new grammar schools down the road, with a very different operating model and requiring new staff. That cannot possibly happen as quickly and the clock is already ticking on our booming school population. Just last week, over 90,000 pupils missed out on their first preference school this year.
“Choice is important, but the priority must be to create as many new places as possible in a short period of time, and grammar schools are not the best way to do this.”
Self-employed
Headline: Chancellor will increase NI contributions for self-employed from 9% to 10% and it will rise to 11% by 2019.
Brian Berry, chief executive of Federation of Master Builders, said: “The Budget was an all-round strong performance from the chancellor and he had good news to report right across the piece. However, increasing tax on the self-employed is not helpful. If we want to establish a resilient, Brexit-proof economy, we must encourage and support our current and future entrepreneurs in the construction industry and beyond.
“A jump in National Insurance contributions to 10% next year could send the wrong message to those individuals who are considering going it alone. The self-employed are the backbone of our economy and the government should tread carefully here.”
London devolution
Headline: More transport over criminal justice infrastructure, skills and employment.
Melanie Leech, chief executive of British Property Federation, said: “It is hugely positive to see the government agree to establish a joint taskforce bringing together the GLA, TfL, London councils, HM Treasury, Department for Transport and Department for Communities and Local Government to explore the options for piloting a Development Rights Auction Model (DRAM) on a major infrastructure project in London.
“However, the creation of new infrastructure funding models must be done as part of the root and branch review of CIL, and should be tested with the wider developer community to ensure that efforts to bring about more infrastructure do not become barriers to the very development they are seeking to underpin.”
Duncan Field, head of planning, UK, global law firm, Norton Rose Fulbright, added: “After a busy few months of policy initiatives it is unsurprising that the Budget contains very little that is new in the areas of planning, housing and infrastructure. Undoubtedly the most significant announcement is the memorandum of understanding between government, the mayor of London and London councils which heralds a move towards further devolution in London.
“This includes a gradual move to 100% business rates retention for London and suggests significant investment in transport infrastructure. Disappointingly, both the MoU and the Budget are silent on Crossrail line 2, but one eye-catching and perhaps related initiative is the commitment to pilot a Development Rights Auction Model for a major infrastructure project in London as a form of land value capture. This – if it works – has the potential to transform infrastructure funding, particularly for transport projects in the UK.
Productivity
Eddie Tuttle said: “The chancellor stated that productivity was ‘at the very heart’ of the government’s economic plan. We are keen to work with the government to ensure construction’s contribution to improving productivity in the wider economy is better recognised.
“We also need to fully understand just how big an industry construction is and what it supports in order to get a fuller picture about productivity – data at the moment only measures on-site work and there are huge gaps in public understanding. The National Productivity Investment Fund announced in the chancellor’s Autumn Statement last year should be used as a lever to help understand this wider impact.
“Regional investment that adds value throughout the country is welcomed, not least to close the investment and productivity gap between London and the rest of the UK. But for this to work, investment must be tied to training and job creation. CIOB, alongside other industry bodies, will be producing a report later this year on the value of regional investment in the UK, which aims to improve the construction-related investment decisions made by policy makers.”
The bigger picture
The concensus was that this was an uneventful budget for the public and industry in general. But in construction the lack of fireworks was welcomed.
Manish Gupta, head of transport corporate finance at EY, commented: “While there is some disappointment over a lack of a PF2 announcement, we wait to see whether there will be any follow-up from HM Treasury in an attempt to accelerate infrastructure delivery.”
Melanie Leech, chief executive of the British Property Federation, said: “This was possibly one of the least eventful Budgets in recent memory, and we are thankful for that. The government had nothing to prove after two months of White Papers and strategies, and the real estate industry will welcome the stability the Budget signals.
“We anticipated the government’s short-term relief for businesses hardest hit by the increases in business rates, but we urge the chancellor to understand the unfairness prevailing in the appeals system. The chancellor has two Budgets this year and he should use his second in the Autumn to also have a stock take of some of the recent SDLT measures and whether they are having unintended consequences or inhibiting investment.”
John Hicks, director and head of government & public, Aecom: “Knowing that today’s Spring Budget will be the last and that it falls a week or so before the prime minister is expected to trigger Article 50, expectations were not high. Nobody should, therefore, be too disappointed with a slightly less ambitious Budget compared to recent years. An Autumn Statement will require more scrutiny.”
