Budget is a ‘critical’ moment for construction

By Ged Henderson

28 Oct 2024

Joe SullivanMHA

This week’s Budget will be a critical moment which has the potential to set the tone for the construction sector over the coming years, according to one Lancashire business adviser.

Looking ahead to Wednesday’s statement, Joe Sullivan, a Preston-based partner in the real estate and construction team at national accountancy and business advisory firm MHA, highlighted the sector’s ‘glaring omission’ in the government’s recently announced Invest 2035: UK Modern Industrial Strategy.

The S&P Global’s Construction Purchasing Managers Index (PMI) has maintained a position above 50 for several consecutive months, including jumping to 57 in September, a two-year high.

Joe said that re-enforced the sense the sector was on the path to recovery, buoyed by improved supply chain conditions and a notable reduction in labour shortages.

However, he claimed there were several headwinds facing the construction industry and it was critical for the government to use the budget to include the sector its growth plans.

He said: “While the announcement of Labour’s housing plan has been welcomed, our clients are telling us that the uncertainty as to further announcements in this month’s budget is causing a delay with investment decisions.

“Achieving the government's housing targets will require planning reforms and significant investment in infrastructure, such as transport, schools, and healthcare, along with policies to attract businesses and create local employment opportunities.

“The industry also faces an urgent skills shortage. The Construction Industry Training Board estimates a need for 152,000 more workers to meet housing targets, while the Home Builders Federation highlights that one in five builders is over 50, underscoring the need for fresh talent in the sector.”

Joe added recognising construction as a key growth sector in the Budget would ensure access to the necessary investment and policy support.

He said: “This includes funding for skills development, incentives for sustainable 'green' construction practices, and streamlining planning processes to make it easier for firms to meet the government's housing target of 1.5 million new homes and a new generation of towns,” he said.

“The budget will be a critical moment for the industry, with the potential to set the tone for the coming years. With careful planning and strategic investment, businesses can position themselves to capitalise on the evolving market landscape.”

Matthew Johnson, associate partner at Preston-headquartered accountants and business advisors WNJ, said companies were bracing themselves for a ‘bad news’ Budget.

He said: “The warnings are clear. Prime Minister Keir Starmer has already declared this month’s Budget is “going to be tough”. The only question is: Just how tough?

“The run-up has seen intense speculation on what tax hikes chancellor Rachel Reeves will announce when she stands up in the Commons to deliver her speech on Wednesday.

“And again, the writing has been on the wall, as she has now started talking about a £40bn funding gap – almost twice the size of the £22bn “black hole” Labour identified on taking office.

“If the pundits are right there are going to be some big announcements around taxes that will have impact on both businesses and individuals.

“From inheritance tax to fuel duty, the reports all point to a wide range of options being considered in the government’s bid to raise the cash it needs as it looks, in its own words, to “fix the foundations”.

“Little wonder the North and Western Lancashire Chamber of Commerce has reported that “taxation anxiety” is in the air for many businesses.”

The chancellor is planning to increase the amount of money the government raises in inheritance tax, according to a BBC report.

It is not known how many people are likely to end up paying more, or how much more they would pay under the plans that are reportedly under consideration.

The BBC says it is understood multiple changes to the tax, which currently includes several exemptions and reliefs, are on the table.

The tax includes a series of exemptions which over the years several governments have considered changing in order to raise more cash. It seems Labour is ready to bite the bullet.

Senior government figures have also been hinting that there will be increases to the amount of National Insurance (NI) paid by employers.

There has been growing speculation that the chancellor will scrap the NI exemption on employer pension contributions.

That has led to warnings such a move could hit payments into staff pension schemes and slow hiring or future pay rises, with small business hit the hardest.

Enjoyed this? Read more from Ged Henderson

Latest news

1

‘Simpler’ council structure is on the cards westminster-london.jpeg

‘Simpler’ council structure is on the cards

07 Nov 2024

2

New strategic partners revealed for Preston Partnership Preston partnership launch

New strategic partners revealed for Preston Partnership

07 Nov 2024

3

FWP delivers multi-million pound York racecourse redevelopment York racecourse

FWP delivers multi-million pound York racecourse redevelopment

07 Nov 2024

4

Eric Wright submit plans for new £2.5 sports and leisure facility at Waverley Park Plans for Waverley Park

Eric Wright submit plans for new £2.5 sports and leisure facility at Waverley Park

07 Nov 2024

5

Plans submitted for 1.3m sq ft Chorley logistics hub Plans have been submitted for the park

Plans submitted for 1.3m sq ft Chorley logistics hub

06 Nov 2024

PC PrestonMacan GIF980x120
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
The Lancashire Festival of Business
FOB 315
Exhibitions
30 Jan 2025

The Lancashire Festival of Business

Impact Conferencing, Burnley, BB12 6QP

09:00 - 16:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
11 Jun 2024 - 04 Dec 2024

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 16:30

Skills Bootcamp in Procurement - Cohort 2
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Seminars
15 Oct 2024 - 17 Dec 2024

Skills Bootcamp in Procurement - Cohort 2

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

mBITfor transformative leadership and coaching
mBIT coach Practitioner.png.png
LBV Hub Seminars
14 Nov 2024 - 17 Nov 2024

mBITfor transformative leadership and coaching

Unlocking Possibilities training venue, 166 Waterloo Road , Blackpool, FY4 2AF

09:00 - 17:00

The Business Network Central & East Lancashire
LBV Header (14).png.png
LBV Hub Networking
14 Nov 2024 - 14 Nov 2024

The Business Network Central & East Lancashire

Mytton Fold, Blackburn, BB2 7NP

11:30 - 14:15

Avidly Activates UK 2024 - Activate your customer-driven sales and marketing
avidly activates audience having a good time.jpg.jpg
LBV Hub Networking
14 Nov 2024

Avidly Activates UK 2024 - Activate your customer-driven sales and marketing

Everyman Cinema, Holmes Mill, Clitheroe, BB7 1EB

10:00 - 16:00

North West HR Employers Forum
CBP-logo LBV.png.png
LBV Hub Seminars
20 Nov 2024 - 20 Nov 2024

North West HR Employers Forum

Wham Stadium, Accrington Stanley, Livingstone Road, Accrington, BB5 5BX

09:00 - 12:00

Live Work Create: Building Community In The Modern World
Live-Work-Create-Building-Community-1024x1024.png.png
LBV Hub Networking
20 Nov 2024

Live Work Create: Building Community In The Modern World

Society1 Coworking Space, Preston, PR1 3LT

18:00 - 20:00

LBV119 Magazine Launch Event
DSC9389
Networking
20 Nov 2024

LBV119 Magazine Launch Event

Stonyhurst College, Clitheroe, BB7 9PT

16:00 - 18:00

Emergency First Aid at Work
Chamber Logo1.png.png
LBV Hub Seminars
21 Nov 2024

Emergency First Aid at Work

FGH Training, 3rd Floor, Storey House, White Cross Business Park, Lancaster, LA1 4XQ

09:00 - 05:00

Blackburn & Darwen Youth Zone Quiz Returns for 10th Year!
Quiz Pic.jpg.jpg
LBV Hub Fundraisers
21 Nov 2024 - 21 Nov 2024

Blackburn & Darwen Youth Zone Quiz Returns for 10th Year!

Accrington Stanley Football Club, Accrington, BB5 5BX

17:00 - 20:30

SPARK The Apprenticeship Marketplace
UCLanAerialCampus.jpg.jpg
LBV Hub Networking
21 Nov 2024 - 21 Nov 2024

SPARK The Apprenticeship Marketplace

University of Central Lancashire, Preston, PR1 2HE

09:30 - 13:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV118 Online Graphic
Subscribe now

Weekly news bulletin