Archive 2016 10

Big Hitters 3 What can the construction industry expect from Philip Hammond’s first Autumn Statement? WITH Hinckley Point C finally being given the green light, the eyes of the construction industry will be firmly fixed on Philip Hammond when he announces his Autumn Statement on November 23. There is already plenty of speculation suggesting the new Chancellor of the Exchequer will follow in the footsteps of predecessor George Osborne by increasing infrastructure investment in order to kick-start both the sector and economy. And with Theresa May announcing her intentions to start Brexit negotiations in March next year, Hammond told the recent Conservative Party Conference that his Autumn Statement will “deliver long-term fiscal sustainability, while responding to the consequences of short-term uncertainty and recognising the need for investment to build an economy that works for everyone.” But when it comes to spending, what would construction firms like to see prioritised? In his first speech as chancellor, Hammond gave clear backing to the Northern Powerhouse, telling delegates: “I pledge today that the Treasury under my leadership will continue to drive the Northern Powerhouse project, working in partnership with local leaders, to see it delivers its potential for people in the north.” And with the appointment of Andrew Piercy as the powerhouse’s first minister, Jim Nicholson, CEO of North West construction and property specialist Pochin’s, believes it is important that this momentum is maintained because “construction remains a strong indicator of a successful economy.” He says: “The government’s plans for highspeed railway HS2 and other infrastructure sparked a huge opportunity for the construction industry in the north to make its mark on the legacy of northern cities, which is why we hope to see the Northern Powerhouse prioritised in the Autumn Statement.” While there is talk of investing in infrastructure and boosting housebuilding, Martin Vella, managing director of construction company Pexhurst, says: “A lot needs to be done to help the commercial property development and construction market too.” photo: Harland Quarrington/MOD With this is mind, Vella suggests Hammond needs to address two key issues – the skills gap and foreign investment. “Investment funds from the US, Canada, Far East and Middle East could be the key to keeping the construction industry buoyant,” he says. And with investors looking for quick turnarounds and to maximise their returns by making improvements, “not only would they be stimulating the acquisition market, they would be creating jobs for contractors too.” And with the skills crisis reaching “emergency” levels, Vella would also like to see measures put in place to safeguard future use of European labour. “Take away the overseas labour and we are going to have a real problem with recruiting skilled labour, which is going to slow down site progress and likely push labour prices, he says.” Meanwhile Rob Tuck, project director at HB Reavis, believes education and apprenticeships would benefit from more funds with emphasis placed on engineering and construction in UK schools and a more rigid system of established apprenticeship schemes, rather than what he describes as “quick fix” options currently on offer. “Across continental Europe we are seeing a proliferation of technical institutes and specialised colleges promoting engineering and skilled trades from a young age, and this is an area in which the UK is lagging behind,” he says. “One way in which to encourage the resolution of these problems would be to implement national insurance breaks for companies that put school leavers on proper apprentice training schemes.” Stamp duty in the key issue for Glen Wilson, senior sales executive at Yorkshire residential property developer, Noble Homes because “not only does it affect the private homebuyer, it can also severely impact commercial land purchasing.” He explains: “If we buy a commercial unit for £1 million, it becomes £1.2 million with VAT. While we can of course claim the VAT back, the stamp duty due is payable on the whole amount, which in this case would equate to an extra £10,000. “We believe that the legislation around stamp duty should be changed so that it’s chargeable on the purchase price only.” As well as prioritising spending in public sector projects, with corporation tax breaks for the construction of buildings such as schools and hospitals, Tuck says another key area to improve is in the planning process because “obtaining planning permission can be a lengthy ordeal.” He says: “If the current protocol could be streamlined under new legislation and spending allocation then this would certainly be a much welcomed change across the construction industry.” John McAuliffe, managing director at McAuliffe Group, would also like to see Hammond review the resourcing of supporting agencies within the planning system. “This review should include re-assessing the 30-day statutory response period following an initial application. Investment in resourcing should also be seriously considered, ensuring that all subsequent correspondence is dealt with in seven days.” Flood alleviation schemes should be the priority for infrastructure spending, according to engineering consultancy Morgan Tucker. With estimates suggesting that more than five million homes in England – one in six properties – are at risk of flooding, Tom Ingram, head of civil engineering at Morgan Tucker, says: “There are multiple ‘shovelready’ flood defence schemes across the UK that could be dusted off and actioned almost immediately.” Whatever the outcome, Hammond says his Autumn Statement “will set out a new plan for the new circumstances Britain faces.” n Chancellor Philip Hammond

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