£5bn of expenditure could be enough to reboot the construction industry – but there is no house building plan

Covid-19 News | Property & Construction | Reports

The Prime Minister’s Build, Build, Build plans are welcome and the £4bn of the expenditure announced today for repairs and upgrades could re-boot the construction industry but the Government is offering no new money for house building, say tax and advisory for Blick Rothenberg.

Heather Powell, Property and Construction Partner at the firm said: “House builders and the ‘Bank of Mum and Dad’ appear to be the funders for new homes, not the government. The Prime Minister talked about building better, greener and faster but almost all of the funding announced today was about infrastructure repairs, not new houses.

“He talked about Build, Build, Build but today’s announcement was about Repair, Repair, Repair. While the prime Minister referred to building on brownfield sites and major planning reform the majority of the funding announced was directed at repairing hospitals, schools and colleges, prisons and young offender’s institutions.

“Many construction firms are going bust so the Prime Ministers announcement about these maintenance and repair contracts could get some construction firms back on their feet. The Treasury needs to ensure that these funds are allocated and distributed this year to the various bodies to start all projects detailed today – which means shovels in the ground, not a study on the best way forward.

“The total expenditure announced today equates to The Prime Ministers plans equate to £100 per head of the population and many are questioning whether this is enough. This should be enough is converted into contracts that start in 2020 to keep construction firms going, getting back into work those laid off from sites and encouraging firms to start thinking of training up further employees.

“It is very pleasing to see that the £5bm expenditure includes £900m for “Shovel ready local growth projects”. These can deliver – and when these projects are started the whole of the local economy picks up – workers spend on our High Streets and in shopping malls, enjoy nights out with friends and pay rent to landlords.

“The Prime Minister reminded his audience that his government are committed to delivering 50 new schools and 40 new hospitals. However, to drive an economic recovery he must ensure that that these projects are started now to give the construction industry the confidence to invest in their businesses, and the workforce they will need.

“The level of investment previously announced, if bought forward and converted into spades in the ground, can generate skilled and well-paid jobs throughout the country – but the projects must get going, and contracts need to be let.

“If these ambitious plans are delivered it is good news for the UK economy and our National Infrastructure, but there is still a huge need for new homes. The planning reforms announced will create opportunities for developers, but it would appear that “Bank of Mum and Dad” is still going to be the main provider of finance for these homes. A cogent plan is essential to provide homes for the whole nation.”

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