The Budget 2016: What does it mean for the construction industry?
18th March 2016
Last week the 2016 budget was revealed, announcing major changes across everything from the UK’s debt to the price of cigarettes, but what do the budget announcements mean for the construction industry…
What was announced?
In case you missed it, here are some of the key points which were announced in the 2016 budget.
- Unemployment is expected to fall from 5.7% to 5.3% by the end of 2015 with around 1,000 jobs being created per day
- Minimum wage is set to rise to £8 by the end of the decade
- The new ‘Lifetime ISA’ was introduced allowing people under 40 to save up to £4,000 a year with an additional 25% bonus from the Government
- Personal tax free allowance rises to £10,800 next year and £11,000 the year after, providing a tax cut for 27m people. Plans are to increase the tax free allowance to £12,500
- The 40% tax bracket will climb to £43,300 in 2017-18 with plans to raise it to £50,000 in coming years
- £110 investment to tackle the homelessness crisis
- A comprehensive transport strategy was announced for the North to help create a Northern Powerhouse
- Fuel duty frozen for the fifth year running
- Corporation tax, already slashed from 28% to 20% since 2010, will be cut to just 17% in 2020 – saving companies nearly £1billion in the first year.
How does it affect us?
We, amongst many of the UK’s housebuilders, were surprised to see that there were no major new initiatives in the Chancellors budget surrounding the UK’s housing crisis. Political opponents, house builders and housing experts have been quick to criticise. The budget did, however, contain a pledge of £115m to help tackle the homelessness crisis, with £100m being set aside for 2,000 accommodation places for rough sleepers who have been taken in to homelessness crisis centres and are ready to move on. The budget document also mentions that the Government will explore new ways to extend home ownership to social tenants who can’t afford to take advantage of other schemes available, but there were no further details on this.
Also announced were measures to speed up the planning system including a reduction in the number of stages developers must go through to obtain planning permission. The aim is to minimise delays by 2017, a great improvement for the construction industry.
In the autumn statement the government committed to releasing enough public sector land for 160,000 homes, this has now been doubled with local authorities and central government working to find land for another 160,000 more homes. This increase in available land should encourage a lift in housebuilding, which will in turn mean more skilled workers are needed.
There have been major infrastructure investments announced including a number of road and rail projects. There have been hard cash pledges of £161m for the M62 smart motorway project near Manchester and a further £151m for two river crossings in Lowestoft and Ipswich. Money being invested in these areas will inevitably create opportunities for businesses and workers within these sectors, with additional suppliers and workers being required to meet the Governments deadlines. However, critics are claiming that these kind of ‘mega projects’ are difficult for SMEs (small and medium enterprises) to get involved in.
With the introduction of the new Lifetime ISA, on top of the Help to Buy ISA which was introduced in January 2016 and the help to buy scheme, first time buyers now have more incentive than ever to buy a home. These financial aids should encourage people to start saving or to take the plunge to buy a house.
Another item noticeably missing from the budget announcements was a change for the steel industry. Steel makers had pleaded with the Chancellor to exclude plant and machinery – which are heavy investments – when calculating business rates, however there was no mention of this in the budget.
With the changes announced this week things could be looking up for the construction industry. Changes to planning permission, more land made available for housebuilding and hard cash investments in infrastructure should all pave the way for new projects across the UK, and with new projects comes new jobs which often encourages people to move into the industry.
With a CV database of over 120,000 candidates, ranging from site level to middle and senior management candidates, Bromak is an excellent resource for anyone looking to fill their company skills gap. Whether you’re looking for a bricklayer for a week’s cover or a permanent Contracts Manager, we can help.
For more information on how Bromak can help you deal with the budget changes please call your local branch or contact us here.Go Back