The 2017 Autumn Budget and What It Means for the Construction Industry
Dec 13, 2017
On Wednesday 22nd November, Chancellor Phillip Hammond delivered the 2017 Autumn Budget Statement, revealing the Government’s spending plans for the UK.
“A future that will be full of change, full of new challenges and above all, full of new opportunities.” – Chancellor Phillip Hammond
A large percentage of the budget will contribute towards the construction sector, with significant investments being made in both retaining our existing workforce and training the next generation of construction workers. There was also a focus on innovation and productivity in the construction sector, with a £170 million investment.
With so many different industries and areas to consider, such as transportation, tax, pollution, healthcare etc. it can be a challenge to identify the announcements that will have a direct impact on the construction industry. We thought we would save you the headache of reading the entire executive summary and summarise the key points that will have a direct impact on the construction sector.
300,000 New Homes a Year
Further financial support has been assigned to building 300,000 new homes a year, a volume that hasn’t been reached since 1970. The total budget now stands at £44 billion, with:
- £15.3 billion for house builds over the next five years
- £1.2 billion for the acquisition of new land for home builds
- £2.7 billion for infrastructure
Five new garden town developments will be initiated, adopting a smarter approach to land utilisation whilst putting provisions in place to protect the environment.
‘New “garden” towns and villages will be built across England in an attempt to alleviate the housing crisis.’ (Source: The Telegraph)
“Locally-led garden towns and villages have enormous potential to deliver the homes that communities need. New communities not only deliver homes, they also bring new jobs and facilities and a big boost to local economies.” – Gavin Barwell
14 locations have been approved for garden villages, whilst 3 have been approved for garden towns, including:
- Aylesbury, Buckinghamshire
- Taunton, Somerset
- Harlow & Gilston, Essex and Hertfordshire
With it having become more and more challenging for young people to get on the property ladder in recent years, the Government are going to abolish stamp duty land tax (SDLT) on homes under £300,000 for first-time buyers. This will take effect as of the 22nd November, saving the average first-time property buyer £1,660 (Source: GOV.UK).
Training and T-levels
Looking to the future, the Government are keen to invest in the longevity and quality of our construction industry by backing training and the development of home-grown talent.
‘£34 million will go towards teaching construction skills like bricklaying and plastering. £30 million will go towards digital courses using AI.’ (Source GOV.UK)
The introduction of T-levels will see a significant increase in the number of young people entering the industry, with the practical skills and knowledge needed to hit the ground running.
“T-levels will increase the life chances of many thousands of young people, while at the same time helping to ensure British industry remains competitive.” – Review Chairman Lord Sainsbury
Construction (‘building, services, engineering pathway) has been announced as one of the first three T-levels to be actioned. It will be launching in 2020 alongside digital and childcare & education.
‘The new vocational qualifications will be supported by funding worth £60 million in 2018-19, rising to £445 million in 2021-22, and eventually to “over £500 million” a year.’ (Source: tes.com)
National Minimum Wage Increase
If you’re an employer, you need to take note of the new changes to the National Living Wage and National Minimum Wage, that will take effect as of April 2018.
For those 25 years and over, the National Living Wage will increase by £0.33, taking it to £7.83 and the National Minimum Wage will see the following increases (Source: GOV.UK):
21 to 24 year olds – £7.38 per hour
18 to 20 year olds – £5.90 per hour
16 and 17 year olds – £4.20 per hour
Apprentices – £3.70 per hour
What Does This Mean for the Construction Sector?
Whilst the above covers some of the key factors that will influence and shape the future of our industry and the future of the country, you can find out where the rest of the budget will be going in the Autumn Budget 2017, Executive Summary.
Overall, the Autumn Budget has been good news for the British construction industry. The more work there is, the higher the demand will be for experienced workers. Employment is expected to grow, with 179,000 construction sector jobs predicted to be created over the next 5 years.
You can find out more about these plans in our article, Growing Opportunities and a Rising Demand for Construction Workers in the UK.
You can watch the Chancellor’s statement in full here: