At the end of October, the Chancellor of the Exchequer Philip Hammond delivered the 2018 Autumn Budget. While the majority of announcements were somewhat expected, there were still a few surprises thrown in. For the construction industry, there were various points included which will have an impact on the industry’s near future. Changes to funding, local and national authorities will all play a part in shaping the next few years for those working in construction.
The private finance initiative (PFI) was introduced as a way to create public-private partnerships (PPPs), with private companies contracted to complete and manage public projects. This had many benefits for the construction industry, providing a range of projects for firms through the government. In the Autumn Budget PFIs have been abolished, though the government will honour any existing contracts. This is due to the belief that PFIs don’t deliver value to the taxpayer and shift risks to the private sector instead.
House Building Boost
An extra £500 million was committed to the Housing Infrastructure Fund to create 650,000 new homes across the country. Plus, on the day the budget was announced the plans to scrap the cap on council borrowing to build new housing came into effect. While this is good news for those looking to get on the housing ladder with the likes of Andrews, it’s also positive for construction firms as it should mean more work. The infrastructure fund was also announced to receive a £38 billion boost by 2023/24, offering further opportunities in the future.
Apprenticeship fees were halved from 10% to 5% for small businesses in the Autumn 2018 Budget. This is a fee any small business must pay when they take on an apprentice, which plenty of construction companies currently do. By slashing this in half it is part of a £695 million package to support both apprenticeships and the wider industries. For many construction firms it means they’ll either be able to take on more apprentices or will save money that can be spent elsewhere.
Stamp Duty Changes
Most of the current thresholds for stamp duty have been left alone. However, higher stamp duty charges for the most expensive homes were announced, along with changes to first-time buyers of shared-ownership homes. Under the new regulations, buyers of shared-ownership homes up to £500,000 will be exempt from the tax, in a move to encourage more house buying. This could have a knock-on effect for the construction industry as demand may increase.
Most of the announcements in the Autumn Budget for 2018 sound like they will have a positive rather than negative impact for the construction industry but time will tell.