Autumn Budget 2021: industry reaction – ‘something of a soggy soufflé’

Building safety

• Addleshaw Goddard partner Peter Hardy: “The levy on developers with profit of more than £25m to help pay for cladding will need to be very carefully worked out. It’s not always obvious who the developer is or was, particularly if the property was built a long time ago. Today’s announcement will make developers think carefully about how they structure themselves as a way to try and avoid or offset some of the tax. The announcement could also slow down progress in the sector for a short time whilst potential taxpayers work out what this means for them.”
• Ringley Group MD Mary-Anne Bowring: “Accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place. That those responsible should cover the costs of what is ultimately a multi-billion-pound myriad of mistakes is an obvious resolution to anyone, and it’s frankly bizarre that we’re still debating this when recent fire-safety legislation provided the perfect opportunity to protect vulnerable leaseholders.”

Business + net-zero

• Gleeds Worldwide CEO Graham Harle: “Today’s Budget, for us in construction, felt like a hotly anticipated meal where the chef had leaked much of his surprise menu in advance and, when it came to it, the showstopper was something of a soggy soufflé. There was £1.5bn in new money to improve transport links, which is welcomed, plus £1.8bn for brownfield residential building and £3.8bn to build new prisons. Investment relief on business rates for green improvements is also welcomed as were new discounts on rates for retail and hospitality. But when achieving net-zero carbon is seen as a bigger issue by most than COVID, the lack of investment in this area was a missed opportunity.”
• National Federation of Roofing Contractors CEO James Talman: “We are delighted the chancellor has listened to calls to exempt plant and machinery used in onsite renewable energy generation and storage from business rates. The business rates system currently discourages investment in commercial rooftop solar PV, taking up 40 per cent of any potential cost savings. We also welcome the Business Rate Improvement Relief, which will allow businesses to make property improvements and pay no extra relief for 12 months.”
• Turner & Townsend MD of cost management Martin Sudweeks: “The chancellor’s pledge to launch a £1.4bn Global Britain Investment Fund to attract more overseas investment into sectors such as life sciences, offshore wind and electric vehicle (EV) production will be a welcome boost for commercial and industrial real estate. The UK is struggling to attract Gigafactory occupiers against the backdrop of fierce competition across Europe. However, it remains to be seen whether the money allocated as part of the fund will be enough to compete and secure investment in EV vehicle production. On the journey to net-zero the UK cannot afford to drag its heels on investment in this space.”
• UKGBC CEO Julie Hirigoyen: “With COP26 just days away, the chancellor’s announcements felt like they were from a different planet and a different time. Whilst we welcome changes to business rates to incentivise investment in renewable technologies, new research and development funding, and grants for local authorities, there were no big announcements to fill the clear gap that has emerged around decarbonising existing buildings. This was evidently the chancellor’s big opportunity to plug the major gaps in the government’s Net Zero and Heat and Buildings Strategies, and put the UK on a firm path to net-zero over the next few years. Instead, attention to net-zero was tokenistic, repeating old announcements alongside incongruous headlines around carbon-intensive investment in roads, cutting air passenger duty and fuel-duty freezes.”
• FMB CEO Brian Berry: “The chancellor has missed the opportunity to give householders peace of mind about how they can tackle the net-zero challenge. With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net-zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes. I do, however, welcome the investment for skills and training confirmed at £3.8bn over this parliament. Long-term skills shortages are delaying jobs for builders, with 60% reporting paused jobs in the latest FMB membership survey.”
• Construction Products Association director of government relations and business development Jeff May: “We were disappointed to see little help for major industrial users with energy costs, or any further financial details on net-zero strategies. That said, we welcome a handful of relevant items in particular: the announcements of a 12-month relief on businesses-rate hikes arising from premises investment, the cancellation of the planned increase to the business-rates multiplier, and the extension of the uplift to the Annual Investment Allowance will go some way to supporting manufacturers while we seek to exit the pandemic in the short term.”

Housing

• Joseph Daniels, an independent net-zero adviser to the government, and CEO of modular housing firm Etopia Group: “We support the priority shown to brownfield land for new housing but, in solving one problem, it’s important ministers don’t add to another. The OBR estimates the total cost of making the UK’s 29 million homes net-zero by 2050 currently stands at £250bn. This figure increases with every day that we build homes that will require retrofitting when new Building Regulations come into play by 2026 as part of the Future Homes Standard.”
• TopHat CEO Jordan Rosenhaus: “The new £1.8bn brownfield fund proves that sweeping planning reforms are anything but dead. Today’s announcement proves that ministers still see the benefit of redeveloping vacant or derelict sites to bring new investment into areas and increase housing delivery. The Treasury reckons that 160,000 homes could be built on brownfield land across the UK. However, if anything, these estimations are too conservative. Either way the government is rightly providing an opportunity for developers to transform neglected urban spaces.”

Chancellor reannounces previous announcements & funding on housing new build and cladding remediation plus confirms levy on residential developers' profits above £25 million at 4%.#AutumnBudget #ukhousing #housing

— Noble Francis (@NobleFrancis) October 27, 2021

• Great Marlborough Estates co-founder Dean Clifford: “Funding to unlock brownfield sites and a digitised planning system are welcome initiatives but they are only a small step towards delivering what is needed to meet the government’s own housebuilding targets. Significant reforms are needed if we are to deliver the homes the country requires. Subsidies for first-time buyers are only part of the solution but, without supply-side reforms, there is a real risk that the gap will continue to widen and the lack of good-quality housing will remain.
• Association for Project Management CEO Professor Adam Boddison: “Building homes for the future is one of the most important projects any government can undertake. As the chartered body for the project profession, we hope this investment will be used to help upskill those tasked with planning and delivering projects. Good project outcomes require the right conditions for success. Any announcement of new initiatives must be matched by the capability and commitment to deliver them well.”
• LEXI Finance co-founder Sam Le Pard: “Solving both the housing and climate crises requires the government and lenders to create an environment where it is sustainable, both financially and environmentally, for SME developers to deliver greener homes on brownfield land. A lack of competitive options in green finance is restricting SMEs from playing a key role in tackling the chronic undersupply of homes in a sustainable manner.”
• SearchLand co-founder Hugh Gibbs: “While we welcome the commitment to increase housebuilding, what’s needed now is a seismic shift in our outdated and ineffective planning system, which continues to be a threat to housebuilders’ ability to deliver new homes. A £65m pledge to help digitise the planning system might seem like a positive step, but given the scale and complexity of the task, as well as this government’s track record with digitisation projects, is enough emphasis being placed on this issue given its immense importance?”
• Real CEO Paul Nicholls: “As a residential contractor and regeneration specialist, the confirmation today of the £11.5bn Affordable Homes Programme to build 180,000 homes and the announcement of the £1.8bn fund to support up to 160,000 homes to be built on brownfield sites is very welcome. The government must seize this opportunity to ensure public investment maximises the construction of affordable housing and supports the recruitment of as many new construction professionals as possible.”

Levelling up

• Scape CEO Mark Robinson: “With the chancellor’s transport commitment extending what was already a sizeable infrastructure pot to £6.9bn, the next five years represent a critical opportunity to invest in the long-term future of regional communities. Better connectivity has the potential to underpin both levelling up and the government’s newly-launched strategy for net-zero, but it will require an engaged and motivated public sector, collaborating with the construction industry, to deliver on behalf of local communities.”
• Wates Group public sector director Stephen Beechey: “The construction industry stands ready to start creating the thousands of new homes the country needs, updating and building hundreds of modern schools and colleges, and the infrastructure required to address some of the longstanding inequalities between north and south. The increase in capital spending for healthcare to £11.2bn, including to upgrade the existing healthcare estate, will also be crucial in supporting the NHS to achieve its net-zero ambitions.”
• Arcadis UK cities director Peter Hogg: “The chancellor has given us a ‘feel-good’ Budget for hard times. Building on previous announcements around the levelling-up agenda, much of the focus of today’s Budget was local. Increases in local government spending, as well as supporting regional aviation with reforms to airport-passenger duty, and TfL transport-style settlements across the regions are all welcome, but any mention of HS2 or a national railway strategy, for example, were conspicuous by their absence.”

Chancellor making a big play of levelling up in opening to Budget speech. Wonder whether that feeds through to real rise in levelling up investment later. #budget21

— AlReisnerCECA (@AlReisnerCECA) October 27, 2021

Transport

• ICE director of policy Chris Richards: “The Integrated Rail Plan is now almost a year late. This uncertainty has caused untold damage to the communities living along the eastern leg of HS2 whilst also meaning we still lack plans to deliver the connectivity the government promised between cities and regions across the North. The uplift in city regional funding is good to see but it needs to be sustained rather than one-off funding as recommended by the National Infrastructure Commission. And we know there will be a delay in designing how to make this uplift work for the public as cities wait for the outcome of the IRP.”

Skills

• CITB policy director Steve Radley: “Today’s announcement on infrastructure spending, on top of government plans to meet its net-zero commitments, show it’s critical to invest in construction skills. Large-scale investments in T-levels, maths, Skills Bootcamps and modernising Further Education will provide crucial support on skills and should help to ease pressure on employers looking to recruit and train.”
• MHA partner Brendan Sharkey: “The chancellor can’t do much about the cost of materials but he can do something about labour. He recognised the value of people with certain skills coming to the UK but it is unclear (and unlikely) the new visa system will do much for the construction sector. Two-year visas for key construction workers would have been the single best thing he could have done to address the shortage of labour in the industry. Construction has an opportunity here to secure a workforce of the future. The industry needs to support these initiatives by sponsoring training with visits to construction sites, open days and work experience. Construction needs to assert itself as a career destination for young people because, for political reasons, labour from overseas looks less of an option.”