Housebuilders’ shares went sharply up, the Home Builders Federation pronounced itself ‘delighted’ at a package of stimulus measures and the Royal Institutition of Chartered Surveyors looked forward to a ‘vibrant housing market.’

But for most of the rest of the construction industry, the Chancellor’s recession-busting budget wasn’t bold, brave or effective enough.

There was good news on £600m in financial support for housebuilding, plus £300m available to the stalled college-building programme.

‘Green’ highlights include a £375m fund to improve energy efficiency in existing buildings, and £70m to support community low carbon schemes.

But construction consultancy Davis Langdon noted that these targeted initiatives were not accompanied by any more general measures to stimulate construction. Plus, capital investment is set to fall from £44bn in 2008/9 to £22bn by 2013/2014, with severe implications for education, transport, health and housing projects.

Partner Simon Rawlinson said: ‘In reality, the additional investment is small beer compared to the slump in construction we are currently witnessing.’

An online survey conducted by the Forum of Private Business found that 94% of respondents believed the budget had not addressed the issues threatening their survival.

Gains

  • £500m offered to unlock stalled housing sites and provide a kick-start to housebuilding, to deliver up to an additional 10,000 homes in England over the next 2 years.
  • £100m package of funding for local authorities to build new social housing ast higher energy-efficiency standards
  • £405 million to support low-carbon industries and advanced green manufacturing
  • £300m ear-marked in 2009/10 for Learning and Skills Council college-building programme
  • Extension of government’s ‘top-up’ credit insurance scheme, where the government will match private sector trade credit.

Losses

  • No cut to VAT on repair and maintenance projects
  • Net investment in capital projects as a percentage of GDP will fall from 2.6% in 2008/09 to 1.25% by 2013/14.
  • The Institute of Fiscal Studies says that spending across government departments will fall by 2.3% a year in real terms – the deepest spending cuts since the 1970s.
  • The Department of Health will be under pressure to reduce the need for new hospital space, saving £100m a year by 2013/4.
  • The Highways Agency is expected to retender routine and maintenance contracts, at a saving of £140m this year.

Source

Construction Manager