The Construction Leadership Council has submitted an industry wide response ahead the Chancellor’s Budget Statement on 3 March 2021.
Dear Chancellor,
As you make your preparations for the Spring Budget, the Construction Leadership Council would like to update you on the progress we have made towards recovery since we last wrote to you in September.
In spite of the ongoing challenges of Covid-19 and global economic uncertainty, we remain of the view that the UK remains positioned for recovery.
As you know, the Construction Leadership Council represents an industry which contributes 8 per cent of the UK’s GDP, employs over 10 per cent of its workforce and is made up largely of SMEs, with every £1 spent creating nearly £3 of value to the whole economy.
We continue to see the significant impact that Covid-19 has had on employees and companies in our sector. But we have responded by managing these challenges and working safely together to deliver the homes, buildings and infrastructure our country so desperately needs.
This remains possible thanks to clear support and guidance from the UK Government helping us keep our sites open, and its ongoing assistance to our businesses and workers.
We welcome Government’s long-term recognition of the vital role construction plays in our economy and we have considered below how the construction sector can most effectively support the UK’s recovery in line with the Government’s key policy priorities to achieve Net Zero, Building Safety, Levelling Up, and to stimulate economic activity and protect jobs.
We note especially, Government’s support in delivering future public sector construction projects far more innovatively and efficiently, via the methodology outlined in the Construction Playbook, and the forthcoming changes in UK procurement rules.
Despite this support, our industry remains in extremely challenging times as we continue to adapt to ongoing Covid-19 rules, mitigate the impact of Brexit and prepare for the forthcoming implementation of rule changes on IR35 and the Construction Industry Scheme.
It is also important to note that by continuing to operate the industry has suffered a serious financial impact as a result of project delays and costs incurred in adapting working practices. This has resulted in many contractual disputes which our monitoring suggests are currently growing and which will accelerate further still. We are currently quantifying the impact; however, it is reasonable to assume that without further financial support many companies will become insolvent.
We recognise that difficult decisions will need to be made over the coming year, so have focussed below on a small number of key interventions that we believe will drive immediate economic growth and market confidence.
1. Meeting Net Zero ambitions
o Committing to a National Retrofit Strategy
o Offering Incentives for the commercial property sector
2. Expansion of the Building Safety Fund
3. Levelling up
o Making the Infrastructure Bank an effective vehicle for regeneration
o Securing Local authority funding
4. Stimulating economic activity and protecting jobs
o Extension of the Stamp Duty Holiday and Duty review
o Withdraw Reverse Charge VAT
o Extension of employer apprenticeship incentives and Apprenticeship Levy flexibility
o Other tax measures
We trust that you find the submission below of interest and would be delighted to discuss our proposals with you or your officials as you make your preparations for the Budget.
Yours sincerely,
Andy Mitchell
Co-Chair, CLC
