Low-carbon spending snub leaves builders on critical list

Published:  27 June, 2013

There is scant encouragement for beleaguered construction small and medium enterprises (SMEs) in the Comprehensive Spending Review, according to the Federation of Master Builders (FMB), which argues more needs to be done to support investment in low-carbon refurbishment.

Aside from commitments to spend on infrastructure and affordable housing, the Chancellor offered little in the way of incentives for growth in the private sector, leaving many small building companies stuck on the economic critical list.

Despite welcoming funding for more apprenticeships and the indication that local authority borrowing caps could be lifted, which would allow councils to sell or borrow against assets to build or refurbish affordable housing, the FMB says the Chancellor missed an open goal by not making a major long-term investment in low-carbon refurbishment, which could have helped the government meet tough emissions reduction targets and made the UK’s 26m houses greener and cheaper to heat.

Brian Berry, chief executive of the FMB, said: “George Osborne’s claim that the economy is ‘leaving intensive care’ may ring hollow for many construction SMEs – the FMB’s State of Trade Survey of members, many of which work in the domestic repair, maintenance and improvement market, showed workloads in this sector still falling in the first quarter of the year.

“The government clearly now recognises the importance of investing in Britain’s infrastructure. Our housing stock is a vital part of that infrastructure; it is ageing and inefficient, yet the refurbishment sector remains a Cinderella in terms of public investment. The government can expect to raise an average of £4bn a year over the next 15 years from the European Emissions Trading Scheme and the Carbon Floor Price, but its flagship refurbishment programme, the Green Deal, has seen only £125m invested in incentives for homeowners to carry out this kind of work.

“The right package of direct investment and fiscal incentives could unleash the huge potential of this market. This would offer greater certainty and hope to the thousands of firms who work in this market, support jobs and growth for years to come and help future-proof Britain against the ever-rising price of energy. This should be a key plank of the government’s long-term economic plan, but at present there is no sign that it is.”

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