Modest Budget conceals big potential, says ACE

ACE chief executive Nelson Ogunshakin writes:

While this Budget may have lacked the big, eye-catching announcements on infrastructure that we have gotten used to around the Autumn Statement, there was still plenty with which the industry could be pleased.

An additional £140m of funding for the repair of flood defences and potholes is welcome, as is the news that the house building sector will be boosted by the extension of ‘Help to Buy’ to 2020 and a new ‘Builders Finance Fund’ for SME developers.

The Apprenticeships Grant for Employers scheme will also receive an extra £170m over the next two years, which will go a long way towards producing the next generation of engineers, urgently required to deliver future infrasructure.

Though these measures might seem modest, their impact will be very keenly felt by the construction sector and help immeasurably to build the resilient economy of which the Chancellor spoke.

Key Budget 2014 Announcements:

Housing

• The Help to Buy equity scheme will be extended until 2020, meaning 120,000 extra homes could be built;
• £500m will be set aside for a ‘Builders Finance Fund’ for SME housing developers;
• An urban development corporation will be established for Ebbsfleet.

Flooding

• An extra £140m will be allocated to flood defence repair in the wake of this winter’s storms. This is in addition to the £130m already announced in February.

Roads

• A new ‘Potholes Challenges Fund’ will be established with £200m of funding to distribute.

Skills and apprenticeships

• An extra £85m will be made available in both 2014-15 and 2015-16 for the ‘Apprenticeships Grants for Employers’ Scheme;
• £20m will be provided over two years to support apprenticeships up to postgraduate level.

Energy

• Carbon Price Support will be capped at £18 from 2016-17 until 2019-2020, saving business £4bn by the end of 2019;
• Energy intensive industries will receive support in the form of exemptions for fuel for combined heat and power plants, an extension to the compensation scheme for cost associated with the Carbon Price Floor and EU Emissions Trading System, and a new compensation scheme for costs associated with renewable energy obligations;
• £60m for low carbon innovation that will support Carbon Capture and Storage technologies.

Investment

• The Annual Investment Allowance will be raised to £500,000, providing up-front relief on investment in plant and machinery to almost 5m firms.