Budget reaction: Low expectations and not much to get excited about

Industry leaders have reacted with disappointment to Phillip Hammond’s Budget statement.

Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering (ACE) said: “On the whole, today’s Budget did not really build on the announcements made in the Autumn Statement back in November, although with significant consultations currently ongoing into housing, aviation, a grand industrial strategy and a further Budget in the autumn, perhaps this should not be surprising. We were disappointed to see, however, that some of ACE members’ highest priorities were not supported. There was nothing on Crossrail 2, for instance, a key project that is vital to the future growth and prosperity of the UK’s capital.

“In addition, our members will be concerned at the increased tax burden that rises in the National Insurance rate and business rates represent. At a time when profit margins are being squeezed across the industry, these higher rates of taxation will put a strain on many members, discouraging investment in workforce, research and development, and in some cases bringing into question their continued operation.

“ACE welcomes the announcements around the new T-Levels, however, which we hope will finally see vocational qualifications take their place alongside academic A-Levels in terms of esteem. With the scale of the infrastructure programmes we will see entering the delivery phase in the coming years, it is vital that our workforce is prepared and trained to deliver, and that future generations of engineers come from all manner of educational backgrounds.

“Overall, however, there was not much for the infrastructure sector to get too excited about, something which is both a blessing and a curse. Perhaps we will see more in the chancellor’s second Budget later this year, or even in the more immediate term as Theresa May’s government begins to implement its agenda.”

Nick Roberts, Atkins’ chief executive officer for UK and Europe, said: “If the UK wants to be truly competitive on the world stage we have to address critical issues such as skills and productivity and the delivery of major infrastructure once and for all. The financial investment allocated by the chancellor is welcome, but beyond the money, success will depend on tackling these issues in a joined up way with business, government and education providers working in union to solve them.

“In this digital era we must be able to respond rapidly to changes in the world economy. Disruptive approaches such as intelligent mobility, which will help transform the movement of goods and people around cities, offer a rare opportunity to build world leading sectors. The investments announced today will be vital in accelerating our progress in these areas. Growing a workforce with a high level of basic and specialist technical skills will ensure we can sustain this growth into the future.”  

John Hicks, director and head of government and public at AECOM said: “Brexit clearly influenced many of the measures outlined by the chancellor, which were peppered with announcements designed to offset any potential consequences of a hard exit from the EU.

“One such measure is the focus on technical education and the introduction of T-Levels to address the productivity gap between the UK and our international competitors. This may help to insure against potential difficulties in accessing skilled labour from within Europe in the future. The private sector will have a vital role to play in the successful development of these qualifications and ensuring they reflect industry need. Funding for 1,000 extra PhDs in STEM subjects are welcomed by AECOM and should help tackle the deficit of STEM skills in the market. 

“New money to tackle traffic pinch-points in the north and midlands is a step in the right direction, with the £690m competition to address urban congestion especially welcome as it puts power in the hands of local authorities who are better placed to invest capital of this kind. However, funds will only be available over time and its impact may be lost if the idea is not expedited once local institutions make the call. 

“Additional money for schools maintenance reflects the growing need to deal with the UK’s decaying schools physical environment. Similarly, immediate funds to advance some NHS sustainability and transformation plans prior to the Autumn Statement should have some short-term impact. But close commentators of the NHS will note that the existing capital fund has been significantly raided to support revenue spending. 

“Knowing that today’s spring Budget will be the last and that it falls a week or so before the prime minister is expected to trigger Article 50, expectations were not high. Nobody should, therefore, be too disappointed with a slightly less ambitious Budget compared to recent years. An Autumn Statement will require more scrutiny.”

Striking a more positive tone, Will Waller, market intelligence lead at Arcadis, said: “The Budget is a function of the geopolitical ‘tightrope’ that Britain is about to walk for the next two years at least. However, the Budget was about more than just preparing for the upcoming negotiations – it played into building a positive vision for the globally competitive Britain, focussed on improving productivity and quality of life. 

“Investment in education and skills, consumer protection, PHD research, robotics and tech, devolved administrations, congestion and working families are all clearly aimed at making the UK a better and more competitive place to be for the longer term. The construction industry will inevitably be a beneficiary of a number of these initiatives.”

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