Nigel Rees, GGF Group Chief Executive commented, “Though it was pleasing to see the Chancellor address the critical issues of new housing, construction growth and apprenticeships, there were some areas where he could have offered a bit more encouragement for our industry. The energy efficiency challenge in the UK’s housing stock still needs addressing and we were hoping for some alternative to the failed Green Deal scheme.”
Giles Willson, GGF Managing Director added, “From the Chancellor’s statement, it appears that improving energy efficiency in domestic properties is low on the Government’s agenda, however It was interesting to see that the Government are to consult on the rate of VAT on energy saving products with a view to aligning all such products under EU legislation. We will continue to lobby that energy efficient doors and windows should be at the reduced 5% rate of VAT and hope that they are included in any future changes.”
A summary of Spending Review announcements that will impact on the construction industry are listed below.
- A doubling in the housing budget from 2018/19 (to more than £20 billion of gross capital investment over the next 5 years) to deliver at least 400,000 affordable homes including 200,000 Starter Homes, 135,000 new Help to Buy Shared Ownership homes and 10,000 Rent to Buy homes
- The replacement of ECO from April 2017 with “a new cheaper domestic energy efficiency supplier obligation” which will run for 5 years. The new scheme will upgrade the energy efficiency of over 200,000 homes per year, saving those homes up to £30 off their annual energy bill, tackling the root cause of fuel poverty and delivering on the government’s commitment to help 1 million more homes this Parliament.
- The government will provide £295 million over 5 years to improve the energy efficiency of schools, hospitals and other public sector buildings
- Over £300 million of funding for up to 200 heat networks will generate enough heat to support the equivalent of over 400,000 homes and leverage up to £2 billion of private capital investment
- A new London Help to Buy with a special 40% equity loan
- The government is committed to releasing surplus assets to drive economic growth and release land for housing
- The extending of the doubling of small business rate relief (SBRR) in England for 12 months to April 2017
- Bringing forward further reforms to the planning system, including establishing a new delivery test on local authorities, to ensure delivery against the number of homes set out in Local Plans.
- Amending planning policy to support small sites, extending the £1 billion Builders’ Finance Fund to 2020-21, and halving the length of the planning guarantee for minor developments
- The apprenticeship levy, which comes in from April 2017 at the rate at 0.5% of an employer’s paybill
- A new employer-led body to set apprenticeship standards and ensure quality
- The government will consult on legislation for Finance Bill 2016 to ensure the reduced rate of VAT on energy saving materials is maintained in line with EU law
The Chancellor’s full statement is available on the Government website www.gov.uk