CIOB reacts to Government's latest Budget announcement
The Chartered Institute of Building (CIOB) has today reacted to the Government’s latest Budget announcement.
Eddie Tuttle, Director of Policy, Research and Public Affairs at CIOB, said: “Today’s Budget offers mixed news for the construction sector. Increased funding for new infrastructure is welcome – as is the continued emphasis put on housing - but higher taxes, like increased employer National Insurance contributions, are likely to increase financial strains on the SMEs that are so vital to the industry and its supply chain.
“Nearly a fifth of UK SMEs operate in construction and the cyclical, boom-bust nature of the sector, as well as recent economic hardships, have created a difficult environment for these businesses. So far in 2024, they have accounted for 20 per cent of business insolvencies and alarmingly, around 11,000 firms have collapsed since 2022.
“While we understand the need to build up public finances and reorder the fiscal rules to channel greater investment, the impact of increased costs on construction SMEs could be devastating. SMEs play a vital role in the delivery of new homes and infrastructure as well as the repair and maintenance of existing buildings.
“Increased tax rises without consistent monitoring of the impact they have on the health of crucial sectors, such as construction, run the risk of damaging the pivotal role SMEs play. We urge ongoing government consultation with bodies like CIOB to monitor these impacts on the sector.
“We welcome the Government’s plans to introduce the Warm Homes Plan, which was a key feature in the Labour Party’s election manifesto and includes a promise of £3.4 billion for energy efficiency measures. We hope policymakers will consult with the construction industry on how the grant funding will be targeted, to avoid repeating previous mistakes in other upgrade schemes.
"Finally, building safety remains a critical concern for the construction industry, so we were pleased funding for dangerous cladding remediation was acknowledged as part of the Budget, particularly in the wake of the second phase of the report into the tragedy at Grenfell Tower.”
