CIOB responds to Chancellor's Autumn Statement

As the Chancellor George Osborne announces the 2015 Autumn Statement and Comprehensive Spending Review, the Chartered Institute of Building (CIOB) provides its reaction to the Government’s core commitments that affect the construction industry.

David Hawkes, CIOB Policy Officer, said: “The supply-side focus to alleviate the housing crisis is welcome and long overdue. While much of the current shortfall in UK housing supply is associated with the private home ownership market, greater consideration must be given to expand housing association, local authority and affordable build-to-rent sectors, alongside the provision of accessible, high quality homes for the disabled and elderly. The announcement of some support for these tenures is a start, but it must be recognised that increasing supply across the full range of tenures smooths out demand instabilities and provides house builders and their supply chains with the confidence to invest. 

“With the £120bn commitment that has been announced for supporting infrastructure projects, the Government appears to have warmed to the importance of capital spending, which underpins both growth and productivity. However, we need to see a longer-term demand model to support even greater investment, from both the UK and abroad, going forward. 

“The CIOB recognises the scale of the housing shortage and therefore supports the measures highlighted in the Spending Review and Autumn Statement 2015. However, we emphasise that new homes must not fall short on build quality and do not believe that either the desired level of housing or infrastructure will be achieved without first curtailing the skills gap that currently exists across the construction sector. There is a need for an average of 100,000 new recruits across the built environment per year between now and 2022 so greater support for Further Education institutions is needed, alongside recognition of the value of high quality apprenticeships and training.

“Although we welcome the news of a further 3 million apprenticeship starts by 2020, shifting the emphasis on firms to train their own staff, the Government must work closely alongside professional bodies and employers to design and implement high quality, robust standards that meet the needs of the construction industry. Furthermore, clarity on the role of the CITB moving forward must be made to give confidence to employers.”

Key announcements affecting the construction industry

•Public housing budget doubled to £2bn a year;

•As announced earlier this year, 200,000 ‘Starter Homes’ for first-time buyers will be built by 2020;

•135,000 shared ownership homes for households earning less than £80,000 (less than £90,000 in London);

•10,000 homes to be rented at a reduced rate for tenants to live in for five years, who will then have the opportunity to buy it;

•8,000 specialist homes for people with disabilities and the elderly;

•A new ‘London Help to Buy’ with Londoners offered a 5% deposit and an interest free loan of up to 40%;

•Government departments to release public land with scope to build 160,000 homes;

•Extending the £1bn Builders’ Finance Fund to 2020-21;

•Stamp duty rise on second homes and buy-to-let property - a 3% additional charge which will raise £3.8bn by 2020;

•Further details on the apprenticeship levy on large employers were announced. This stands at 0.5% of employer’s pay bill, but accounts for a £15,000 allowance to offset against the levy which will see 98% of all employers’ effectively pay no levy. The levy will raise £3bn and fund three million apprentices;

•Increased funding for the Renewable Heat Incentive (RHI) to £1.15bn by 2020-21, while also reforming the scheme to save £700m by 2020/21.

•Reforms to the Energy Company Obligation (ECO), which will be replaced from April 2017 with a new cheaper domestic energy efficiency supplier obligation which will run for five years;

•£12bn more on capital spending than previously forecast over the parliament:

• MoJ will spend £1bn on building nine new prisons, with outdated prisons to be sold for housing;
• DfE to spend £23bn on school building over the course of the parliament – £2bn more than announced in 2013;
• DfT’s capital spend will increase by 51%, helping to fund roads, HS2 and other transport projects.