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Budget 2014: New £500m Builders Finance Fund

Jessica Middleton-Pugh

In a Budget aimed at "getting Britain building again", the Chancellor unveiled a range of measures for boosting UK construction, including a new loan fund for small housebuilders, £150m to kick-start stalled developments, and increased investment in infrastructure projects.

The BFF will offer loans to developers and help sites of up to 250 homes that have been stalled due to difficulty in accessing funds.

Jonathan Seddon, managing director of Seddon, said: "As a builder, Seddon is obviously pleased that the Government has extended its commitment to assisting first time buyers purchase new-build homes, which should have a positive impact on demand.

"However, we are concerned that many in the industry continue to ignore what is an obvious barrier to the supply of new homes, particularly now the country is gearing up to start building again.

"As a family owned business Seddon has been able to make a commitment to apprenticeships and training throughout the recent lean years, and although I appreciate it's been harder for some of our investor and shareholder owned competitors to justify this expense through the tough times, we all have to pull our weight to ensure we have people with the skills to deliver what's being promised."

Jonathan Pochin, managing director of Pochin Construction, said: "The Budget was an encouraging step in the right direction for UK house building, with the announcement of further actions to address the national housing shortage.

"However, following promises to boost youth employment and get Britain building, it could be that the Chancellor has missed some opportunities to maximise the full potential of the wider construction industry.

"The regeneration of inner city housing and the motion to develop 200,000 new homes will stimulate growth in the sector, but public sector building and development of new infrastructure remained a minor issue in the wider statement.

"In order to invite strong investment and viable career prospects, the government needs to invest in construction and provide intelligent development for the next generation of skilled workers."

Steve Housden, the North West spokesman for the CITB, said: "The Chancellor's announcement of substantial investment in housing and infrastructure projects is great news. The challenge now is to ensure that the sector has the skilled workforce that it will need to take advantage of the return to growth.

"Over the next five years the CITB believes that the construction industry will need to recruit 120,000 new apprentices and fill 180,000 new construction jobs nationally. Only by working together can we be sure of winning the war for talent. Failure to invest in the future will mean missing out on the opportunities that will be out there for the taking.

"Investment in infrastructure continues to drive growth in the North West with the new Mersey Gateway Bridge and the Carrington Power Station requiring a steady stream of skilled workers over the coming years. Private housing is also expected to flourish in the short term with the support of the Government's 'Help to Buy' scheme placing a large number of first time buyers on the property ladder."

On the Government's announcement that it will consult in summer 2014 on options to improve the CIS for smaller businesses, Lee Downs, finance director for Manchester-based contractor Russells Construction, said: "I welcome the government finally recognising the need to improve the Construction Industry Scheme which can be a burden for many small businesses. At Russells, we deal with many small and medium sized subcontractors who simply do not understand the rules of the scheme and do not have the necessary administrative capacity to adequately ensure the rules are properly adhered to. Failure to comply with the rules, which can often be misleading, can lead to penalties and I would like to see the government taking this opportunity to simply the whole process. I am hopeful that this will happen when the government consults in spring 2014."

Karen Campbell, head of property and construction at the accountancy firm Grant Thornton in the North West, said: "In terms of stimulating demand, house builders will be disappointed at the Chancellor's apparent lack of focus on housing. There were some welcome measures including the extension of the Help to Buy scheme and the £500m Finance Fund. However, to boost the supply of homes needed to meet demand housebuilders want to see an effective release of public land for house building, increases in the borrowing capacity of housing associations and extended government guarantees to back financing for new development.

"Among the better news were the budget announcements around new housing and infrastructure projects such as the continued support of HS2 and the £270m guarantee for Mersey Gateway bridge – great examples of investments which will improve people's lives now and in the future."

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