Clearview National August 2015 - Issue 165 | Page 90
businessnews
A Budget
of Hidden
Costs for
Construction
Iain McIlwee, chief executive of the British Woodworking Federation, warns
how the Chancellors announcements back in July regarding Housing Growth
Partnership, may well be perceived as a positive step, however attention should
still be highlighted to the hidden and indirect costs which may affect the industry.
»»“This is a complex
Budget for businesses in our
sector, the true impact of which
probably won’t be known for a
while.
“There was a very positive
announcement in July about the
Housing Growth Partnership
initiative to bring in added
support for small builders.
The Government’s continued
commitment in this Budget
to new home building and
infrastructure is also very
welcome.
“But our concern is that it
may, on closer scrutiny; turn out
to be a Budget of indirect and
hidden costs to the construction
industry, the very engine of
growth the Chancellor is
depending on most.
“Like others, we have
serious concerns about the
future security of income for
housing associations and their
likely ability to maintain their
development or refurbishment
programmes. Affordable housing
is already on its knees. Planning
reforms will need to reduce
development costs significantly
to give us any chance of a
sustainable social housing sector
in the future.
“Changes to the tax breaks
for private landlords are less
than expected, but could also
impact on the funds available
for domestic RMI work (home
repair, maintenance and
improvement), which is so
essential to the refurbishment to
our ageing housing stock.
90 » AUG 2015 » CL EARVI E W- UK . C O M
“And looking at the direct
impact on SMEs in the
construction supply chain, while
an increase in the minimum wage
for the lowest paid is welcome, we
cannot ignore the fact that such
increases have a knock-on effect
throughout a business, creating
inflation in a firm’s total wage
bill. Our latest State of Trade
survey among Britain’s joinery
manufacturing firms already
reveals that 73% of respondents
had seen a sharp increase in labour
costs, and this is fast becoming
a constraint on business. Wage
inflation and other increases in
the cost of doing business, such
as the IPT increase, will need to
be properly offset by the cuts in
Corporation Tax and increases in
employment allowances.
“We always welcome
Government support for
apprenticeships – the joinery
sector has the highest ratio of
apprenticeships in construction.
But we really were hoping for
more detail on apprentice reform,
and there are many questions
about how the Apprenticeship
Levy on big firms will be delivered
and the interplay with the current
CITB levy. This is an area which
we will continue to scrutinise
closely.” Ian concludes.
The UK wood products
manufacturing sector is a vital
part of the construction industry,
adding £3.8 billion to the UK
economy every year. Carpentry
and joinery also represents the
third largest sector of employment
in construction.