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Budget 2015: What does it mean for the UK construction industry?

09 July 2015
Female architect considers plans on building site

Firms will welcome reforms to apprenticeships and a rise in the employment allowance, says LSBU's construction management expert Professor Charles Egbu

Professor Charles Egbu, Dean of London South Bank University (LSBU)'s School of The Built Environment and Architecture, evaluates what the recent budget announcement signals for the UK construction industry.

"A number of measures outlined in the Chancellor's budget could be seen as positives from a Construction Industry and wider Built Environment perspective. 

"First is the proposal to reform apprenticeships, including Higher and Degree Apprenticeships. Hopefully, this should come with some real funding. A number of employers should be pleased with this. The construction industry should also benefit from the 3 million apprenticeship target which the government has set for itself. This should also go some way towards addressing some of the issues of skills shortages and skill gaps in the construction sector. 

"It is, however, important that the construction industry plays a significant role in driving the quality of apprenticeships, by setting standards and providing organisational support. Employers, professional bodies and providers need to work closely to make this happen successfully. 

"There was also the announcement of the new "National Living Wage". I'm sure the construction industry would have benefited more if the government went the extra mile to increase the minimum wage for apprentices. But this is seemingly not to be. 

"More was expected on the issue of stimulating the housing market. Housing remains a crisis issue, and the budget seemingly has failed to tackle this head-on. The construction industry needs to keep a careful watch on the Chancellor's proposed reforms to tax credits, as this could effectively increase the cost of labour, as certain employment structures become less favoured and less lucrative. 

"The rise in employment allowance of £3000, however, should benefit small construction firms as they could still employ four people without paying national insurance. Finally I would expect that the announcement by the Chancellor that small and medium size constructors will get a £100m boost through the Housing Growth Partnership would be seen as positive move, and one which the Federation of Master Builders should be quick to seize upon."

 
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