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CIC Economics and Policy Forum The 2011 Budget and Construction

Dive into the impact of the 2011 UK budget on construction, exploring key measures, growth plans, and sector implications. Discover how the government aims to drive growth through innovative strategies targeted at different industries.

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CIC Economics and Policy Forum The 2011 Budget and Construction

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  1. CIC Economics and Policy ForumThe 2011 Budget and Construction Simon Rawlinson | March 2011

  2. = £100 million Source: HM Treasury

  3. Contents • Key themes • Macro-economic background • Key measures • Impact on sectors • Plan for growth and the place for construction • Joining up the dots

  4. So this is our plan for growth. We want the words: ‘Made in Britain’ ‘Created in Britain’ ‘Designed in Britain’ ‘Invented in Britain’ To drive our nation forward. A Britain carried aloft by the March of the Makers

  5. What should a Plan for Growth Address? • Supply-side constraint • Transport and Energy Infrastructure • Low carbon infrastructure • Industrial capacity • Commercial space • Research and development Infrastructure • Housing • Cost of delivery of infrastructure • Funding • Training and career development • Ease of engagement • Planning and regulation • Market failure • Increasing the competitiveness of the tax system • Competitiveness and certainty of business taxation • Simplicity of operation • Support for investment and operation

  6. Key themes • Catch-up Britain • Relative competitiveness • Attraction as a location to innovate and grow • Improving the UK’s export orientation • Developing a flexible, well-educated workforce • The Government’s room for manoeuvre • Pace of Policy Change • The Elephants in the room

  7. Macro-economic background • GDP Growth down-graded in the short term • Fiscal tightening accelerates • Structural deficit is planned to eliminated by 2014/15 • The economy is planned to rebalance around investment and net trade

  8. Macro-economic risks • Size of the output gap • Impact of inflation Source: NIESR Source: BoE

  9. Key Budget Measures Competitiveness and incentive Certainty for investment • Key measures - taxation • Corporation Tax • Improvements to tax administration • Increases in Entrepreneur’s Tax Relief • Fuel duty escalator replaced by Fair Fuel Stabiliser • Key measures – increasing capacity • Simplified Regulation of the SME sector • Support to the advanced manufacturing sector • 50,000 apprenticeships • 24 University Technical Colleges - £150 million • R&D tax credits for SMEs

  10. Key Budget Measures Competitiveness and incentive Certainty for investment • Key measures – energy and climate change • Green Investment Bank • Carbon floor • Extension of carbon change arrangements • Zero-carbon home definition • Key measures – stimulating private sector demand • Simplified taxation of REITs • Reform to Stamp Duty land tax • Simplified planning

  11. Impact on Sectors • Housing and Regeneration. • Homebuy - £200m • Stamp Duty Land Tax • Planning reform • Renegotiated s106 • Education • £150m for University Technical Colleges • £100 for R&D infrastructure • Transport • Fair Fuel Stabiliser • £200m rail investment • £100m road repairs • Local Government • Enterprise zones and TIF arrangements for business rates • Impact of s106 negotiation on ability to deliver existing programme • Energy and Carbon Change • Carbon Floor • Green Investment Bank

  12. Plan for Growth – Key Strands

  13. Plan for Growth – Planning • Planning decisions should prioritise growth and jobs • A powerful presumption in favour of sustainable development • A pro-growth National Planning Policy Framework • Businesses able to engage in the neighbourhood planning process • Localised targets for the re-use of previously used land • Consultation on conversion from commercial to residential • Streamlined planning system including a 12 month guarantee (including appeals) • Fast track planning for major infrastructure

  14. Plan for Growth – Regulation • 3 year moratorium on new regulation for micro-business • Scrapping of regulations costing £350m per year • Consultation on reducing the Regulation Stock • Simplification of employment legislation • Changes to Health and Safety regulation and practice • Revisions to EU regulation and Regulatory Culture in EU

  15. Plan for Growth – Construction • Publication of a long-term forward view of projects and programmes • Reforms to construction procurement to drive a cost reduction of up to 20% • First Buy programme aimed at helping 10,000 housebuyers • Accelerated release of public sector land for development • Reforms to SDLT to increase institutional demand for residential • Removal of entry barriers to REITs • Review of regulations and codes • Confirmation of the Zero Carbon Homes standard to apply from 2016

  16. Joining the Dots x  x   ? Source: CPA

  17. Joining the Dots • The hard decisions were made in the November CSR – but implementation has barely started yet • The Chancellor is likely to have little wiggle room throughout the CSR period – there can be few budget surprises in the future • The 2011 budget is fiscally neutral but supportive of business • Long term changes introduced as part of the plan for growth have a surprising upside for construction • Construction is part of the solution in the Plan for Growth – not a target for support.

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