Crumbs of comfort in autumn statement
The industry has given a lukewarm reaction to the chancellor’s autumn statement, pointing out that many of the projects securing funding had previously been announced, and that the plans will do little to offset the dramatic falls in public sector construction spending.
But there was a welcome for measures to boost small businesses, and cautious approval for the implementation of measures outlined in Lord Heseltine’s report on regional economic development.
Chancellor George Osborne announced that a further £5bn of capital investment would be freed up to invest in school development, road works and infrastructure projects. However, Noble Francis, economics director of the Construction Products Association, told Construction News that this was “small beer… given that in 2012 output in construction has been falling at £1bn a month”.
He added that the housing measures in the statement had already been announced, leaving a £725m fund for road repairs as the only genuinely new funding made available.
Peter Vinden FCIOB, who runs construction consultancy the Vinden Partnership, commented: “None of the road schemes announced in last year’s autumn statement were ever started, so it would be great to see some getting off the ground.”
The statement also revealed a funding boost for England’s 39 Local Enterprise Partnerships, which will be able to apply to a £474m government fund to invest in infrastructure projects in their region, which could be used to bring forward sites for housing and other development. However, the industry will have to wait until the 2013 Spending Review for full details.
Speaking to CM, Ben de Waal, head of residential at Davis Langdon, said: “It’s a welcome initiative, and a move towards localism. It will encourage [the industry’s] engagement with LEPs, but you still need something more local than LEPs. And the LEPs will still have to apply to central government for their allocation and so control is still centralised.”
De Waal was also disappointed that there were no moves to help local authorities increase their ability to borrow against the value of their housing stock and build new homes. “The view here is that the extra borrowing would sit on the UK’s balance sheet, but elsewhere in Europe they take a different view – that you’re creating new assets, not increasing your debt.”
Small business could also benefit from a reduced tax bill, with an extension to the small business relief rate scheme until April 2014, and larger capital allowances for plant and machinery.
Gareth Jones, commercial director of Ainscough Crane Hire, welcomed the scrapping of the 3p rise in fuel duty. “This is positive news for us since the running costs of our extensive fleet is one of the business’s largest overheads after salaries. A reduction in corporation tax will also help free up capital to be invested in employees and equipment.”