News & Events MACS Boss Comments on Budget Statement
MACS Plasterboard Chief Executive Tom McLoughlin has analysed the autumn 2017 Budget Statement put forward on 22nd November by Chancellor Philip Hammond and its potential impact on the house building sector of the UK construction industry.
“It’s imperative to get past the headlines in order to fully understand the potential impact of a chancellor’s budget statement,” cautions McLoughlin. In terms of house building, Mr Hammond says the government will commit a total of at least £44bn capital funding, loans and guarantees to support the UK housing market.
There is no question that the country is in the midst of a severe housing shortage. The shortage has been built up over decades due to insufficient investment, and it is a problem which Teresa May has made a personal priority in finding a solution.
The problem can only be solved by building more houses. The chancellor says he will do this by increasing the current output from about 215,000 new houses being created each year to 300,000 a year by the mid 2020’s (eight years from now).
The goal is ambitious and laudable and the chancellor laid out a plan of £44bn to make the goal achievable. But the proof of the pudding is to determine how that money is to be spend – and how much of it will actually go towards new capital investment.
The other attention-grabbing headline is the plan to abolish stamp-duty for first-time buyers on homes under £300k with a discount on the rest up to £500k.
But just who will benefit?
The plan will not result in any new homes being built, and perversely, the ones benefitting may actually be those already owning homes, as the move will likely push up existing home prices.
One other interesting aspect of the budget was the chancellor’s announcement to earmark £34m to develop construction skills across the country.
The funding for construction training is provided in advance of launching a National Retraining Scheme that will help people get new skills. A further £30m will go towards digital courses using artificial intelligence.
The UK construction industry has a massive shortage of skilled labour, a situation exasperated by the fact that it is an ageing workforce, with 30% being over the age 50 and around 700,000 set to retire in the next 10 years. To maintain the current pace of building means that we must bring in an additional 36,000 workers every year.
If not, then the ambitious plans of building 300,000 new homes a year in the UK by the mid 2020’s could be badly effected.
The money for training must be made available to those companies on the front-line who are actually providing the training – companies like our own who are involved in numerous schemes, and usually at our own cost.”