Industry leaders have cautiously welcomed chancellor Rishi Sunak’s summer economic update in Parliament today (8 July 2020), but are expecting a much bigger boost in the autumn budget and spending review.
Included in a raft of measures to boost the economy and safeguard jobs with the Construction Talent Retention Scheme, other areas of specific interest to the construction sector included a £3bn green investment package including retrofitting homes and public buildings, and a boost to housing by scrapping stamp duty on homes worth £500,000 until 31 March 2020 - quadrupling the current exemption level of £125,000.
Mark Robinson, Scape Group chief executive said: “On the face of it, the £3bn green package shows that the construction industry sits at the forefront of government thinking and is no doubt a welcome lifeline to SMEs at a time of national need. However, just how far these measures will go in securing a longer term sustainable future remains unclear. The industry needs a long term view that will give sight of the critical path to the 2050 net-zero target. It’s clear we have much to do to shape a sustainable future for the UK and while today should be welcomed as a step in the right direction, we will wait in anticipation of the chancellor’s autumn statement.”
Dave Sheridan, executive chairman at modular housebuilder ilke Homes, argued that while the chancellor's £2bn green homes grant was positive, there was a need to build new green homes not just retrofit existing homes.
"While the chancellor's measures to retrofit 650,000 homes are absolutely on the money, building new eco-homes must remain the priority,” said Sheridan. “If we are to recover swiftly from this downturn then modern methods of construction must be at the forefront of our plans. Factory-built homes are delivered faster, greener and, in the long-run, will save billions. For a green recovery, we need green, modular homes."
Jack Hunter of IPPR North said: “The chancellor is right to highlight the importance of green jobs to the economy, but to create a long-term and sustainable recovery, he must do much, much more than what was announced today. We need to see much higher levels of investment in green jobs, and we need funding devolved to local authorities who know their areas best. Unfortunately, today’s announcements fell some way short of this.”
Jan Crosby, UK head of infrastructure, building and construction at KPMG, welcomed the cut in stamp duty, but questioned whether it was actually needed: “The stamp duty cut until 31 March 2021 will be welcomed by the housing sector and those looking to move house, however, the market has already been motoring since lock down has been relaxed – pricing has remained stable and new reservations have been high. The stamp duty cut may therefore not have been needed. More important is providing longer term clarity on help to buy, unlocking funding for SME housebuilders to play their part – many of whom have not been supported through CBILS and accelerating the provision of affordably priced key worker family accommodation across the country.”
On the green energy package, Crosby said: “Energy efficiency retrofitting has long been needed and the funding of £5,000 per household to kick start decarbonising existing housing stock is welcome. It should also have the double impact of providing funding to create the volume conditions needed to help with the maturing and perhaps lowering of price of energy efficiency technologies, while facilitating jobs for SMEs in the sector.”
Rory O’Hagan, director at Assael Architecture, said: “Reducing greenhouse gas emissions from the built environment is key to reaching the UK’s net zero target by 2050. Retrofitting public sector buildings and social housing is a welcome first step, but to achieve the scale and pace of change that we need will require a cohesive policy change that survives Rishi Sunak’s funding plan and encourages stable, high-quality practice across the board.”
Chris Richards, ICE director of policy, said: “The chancellor has confirmed the UK will finally have an infrastructure strategy in the autumn, but we have been here before. The financial implications of the pandemic and the difficult trade-offs it will bring, make a robust strategy crucial for repairing the economy quickly. We will need strong leadership and the challenging of old orthodoxies to drive through a plan. This will need a lot of work to get it right; let’s not waste the time we have."
The chancellor said that following this second phase focusing on jobs, there will be a third phase focusing on rebuilding, with a budget and full spending review in the autumn.
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