A rebalancing of public expenditure in favour of capital investment, a targeted cut in VAT on works to make homes greener, and new models for financing major infrastructure are needed to unlock growth in the UK’s strategically crucial construction industry. These are some of the key recommendations of a new report, published today, by an alliance of seven leading industry bodies from across the UK. The alliance has a combined membership of more than 40,000 companies and thousands of individual built environment professionals. The report highlights the critical importance of the construction industry to the UK economy, representing 7% of total economic output, and suggests it will have a pivotal role to play in rebuilding growth. In addition to a lack of public funding and poor availability of private finance, the report identifies planning delays, burdensome bureaucracy and weak customer confidence as other major barriers to growth in the industry. It urges the UK Government to press ahead with controversial reforms to England’s planning system and to accelerate planning reforms elsewhere in the UK. The report suggests further action is needed to widen the availability of bank lending to construction firms and recommends additional measures to improve the availability of affordable mortgages for first-time buyers. It urges the Government to prioritise additional funding for capital investment, calls for VAT on sustainable domestic upgrades to be slashed to 5 per cent and suggests new finance models for major infrastructure projects need to be implemented as a matter of urgency. To inform the report’s key recommendations, members of the Association for Consultancy and Engineering (ACE), the Civil Engineering Contractors Association (CECA), the Construction Products Association, the Institution of Civil Engineers (ICE), the Federation of Master Builders (FMB), the National Federation of Builders (NFB), and the Scottish Building Federation were all surveyed and asked to indicate what they considered to be the main barriers to growth in the UK construction industry. Based on the responses received, the report outlines six key recommendations to unlock growth in the UK construction industry:
• Rebalance public expenditure between capital and current spending;
• Reduce VAT for sustainable domestic upgrades to 5 per cent;
• Identify new models of infrastructure finance;
• Ensure banking support to the construction industry;
• Maintain course on planning reform in England;
• Improve the availability of affordable mortgages for first time buyers.
Commenting, Alasdair Reisner, a spokesman for the industry group, said: “This report shows that there are concrete measures the government can take to unlock growth in the construction sector, which is itself responsible for more than 7 per cent of all UK economic output. “It is of crucial importance that the government acts now to reduce bureaucracy in our sector, remove blockages in the pipeline, identify new funding models for infrastructure and ensure that banks are lending sufficiently to both businesses and first time buyers. This report is an example of what can be achieved through industry co-operation in identifying the barriers to growth. “It is no surprise that construction firms identify a lack of funding as a barrier to growth in the sector, given the current economic climate. However, by canvassing a wide range of industry opinion, Unlocking Growth in UK Construction identifies specific actions that government may take that will enable the construction sector to play its part in returning the UK to sustainable economic growth.”