Richard Steer praises freezing of corporation tax but Stephen Ratcliffe questions significance of bringing forward public spending
The government is “administering strong sedative to a very sick patient”, according to Gleeds senior partner Richard Steer, while the Construction Confederation’s Stephen Ratcliffe claims £3bn of public spending is not significant enough. Read the latest pre-Budget report reaction from the industry’s senior figures.
Richard Steer, senior partner, Gleeds"With the commercial market stagnant I am pleased that the chancellor has brought forward the £3 billion of capital spending to help the public sector and the stalling of corporation tax rises should help sub contractors. The money put into social housing and regeneration is good news for the moribund residential sector and energy efficiency measures are to be welcomed. However one feels that the chancellor is administering a strong sedative to a very sick patient, something designed to stop one feeling too much pain now and delaying the agony that we all know is going to face us in due course. It is the fiscal equivalent of a palliative fix rather than curative solution."
Stephen Ratcliffe, outgoing chief executive, Construction Confederation“Bringing £3bn capital work forward is not very significant. Government always struggles to procure construction within its prescribed timescales. More action needs to be taken to make the procurement process more efficient and effective.
“The measures to allow contractors time to pay their tax bills are very welcome to ease contractors' cash flow problems. On the face of it reduced VAT is welcome but we are concerned that the temporary nature of the change may distort the market and the compliance costs of changing the rate twice within 14 months could reduce the benefits."
Nelson Ogunshakin, chief executive, Association for Consultancy and EngineeringOn the areas the £3bn of accelerated public spending should focus on: "Government should commit to guaranteeing funding for projects that have already been given the go-ahead, such as Crossrail, Building Schools for the Future, Olympics-related developments M25 motorway widening and other strategic infrastructure and institutional building investment projects across the country.
"They should also consider bringing forward projects that have already reached an advanced stage of design. An example is the Manchester Metrolink extensions programme, Birmingham western orbital route and other highways improvement projects.
"We hope that the bringing forward of £3bn of capital spending will include the examination and revision of the Building Schools for the Future programme. This should involve shortening the procurement process, increasing the number of suppliers to enable small firms to take part, increasing the size of the programme, reducing the capital spend per school and refurbishing more schools as apposed to complete new build."