The Budget didn’t do much to raise Pascale Scheurer’s hopes for the future of the industry. Here she considers what has changed and what you can do to mitigate the effects
There’s an old Chinese saying: “A man without a smiling face shouldn’t open a shop”. So true. Well, those of us with shops or other SMEs, especially in construction and architecture, are not exactly smiling after last week’s Budget. Nor are my local shopkeepers and restaurateurs, who are still, at the end of March, feeling the after-Christmas pinch.
Apart from today’s April Fools, do you have anything to smile about? Will anything in the Budget benefit your business, boost your confidence or encourage your clients to invest? Let’s take a look at how the government has played it with this critical, pre-financial year end Budget.
As in, deckchairs on the Titanic. Take a penny off here, add one back there. Rename something, merge something else. Above all, distract from the fact that there isn’t going to be any significant public sector spending this year and rising unemployment is estimated to generate £12.6bn in extra benefit payouts.
I spoke to a civil servant last week, who pleaded patience with the James Review (four months late) as “it’s early days yet”. He seemed genuinely surprised to hear that the delay was causing massive redundancies and firms going bust. Have any of the people in charge ever run a business?
I thought there’d be some solace for companies investing in green energy and the carbon reduction of existing buildings. But uncertainty over feed-in tariffs has hamstrung early-investor businesses, and the Green Investment Bank, a £3bn fund, was effectively created by closing the Sustainable Development Commission. The oil, road and nuclear lobbies continue to attract massive subsidies and influence government policy, stamping out the emergent micro-renewables competition. Someone should remind the government that even the loosest definitions of “sustainability” do not include “sustain our current energy model at all costs, irrespective of the wider impacts”.
Treasury chief secretary Danny Alexander recognised that “businesses up and down the country waiting for planning permission has a significant negative impact on the economy”. But will the impact from the reforms be felt this year? No. Will they cancel out the uncertainties caused by dissolving regional development agencies and the added uncertainty of localism? I doubt it.
Refurbish (or not)
The Green Deal is intended to encourage energy-efficient refurbishment of existing housing stock, yet the perverse VAT rules continue to mitigate against refurbishment. In the US, $195 (£122m) has been invested in artificial photosynthesis, which combined with small hydrogen cells sold at DIY stores, turns a home into a mini power-plant. Over here, there’s no such vision or investment.
Here are my suggestions to weather this Budget storm:
Reduce your outgoings, fast. We’re in for a very rough ride, at least for the next financial year. Architects are a useful barometer for the industry, and things are not picking up yet.
Where there’s muck, there’s brass. Recycling plants are tipped to be a big growth market as the cost of primary resources climbs with oil costs. Just don’t expect any direct investment from the government, or the banks to lend. We’re all in this together, but some of us are in it deeper than others.
Pascale Scheurer is director at Surface to Air Architects