Industry reaction | Chancellor’s Summer Economic Update

Industry reaction | Chancellor’s Summer Economic Update

This week, Chancellor Rishi Sunak delivered his Summer Economic Update setting out the Government’s ‘Plan for Jobs’, which is designed to spur the UK’s recovery from the Coronavirus outbreak. Here we gauge opinion from across the sector to the announcements.

The plan for jobs is the second part of a three-phase plan to secure the UK’s economic recovery from coronavirus. As the UK enters the second phase in its recovery, the Chancellor’s plan is designed to support jobs by focussing on skills and young people, create jobs with investment in shovel-ready projects and greening infrastructure, and protect jobs through a VAT cut for the hospitality sector and a landmark Eat Out to Help Out discount scheme for diners.

Highlights include a new £2bn Kickstart Scheme that will be launched to create hundreds of thousands of new, fully subsidised jobs for young people across the country. A total of £1.6bn will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job. The raft of announcements also includes £1bn funding to make public buildings, such as schools and hospitals, greener, as well as a £50m pilot scheme to trial new ways of decarbonising social housing.

The £5.8bn investment in shovel-ready construction projects includes — £1.5bn for hospital maintenance and upgrades, over £1bn to start to rebuild schools in the worst condition in England, plus £760m this year for key maintenance work on schools and FE colleges (already announced), and £1bn for local projects to boost local economic recovery in the places that need it most.

The Chancellor of the Exchequer Rishi Sunak said: “Throughout this crisis I have never been the prisoner of ideology. For me, this has never just been a question of economics, but of values.

“We believe in the nobility of work. We believe in the inspiring power of opportunity. We believe in the British people’s fortitude and endurance.

Our plan has a clear goal: to protect, support and create jobs. It will give businesses the confidence to retain and hire. To create jobs in every part of our country. To give young people a better start. To give people everywhere the opportunity of a fresh start.”

The third phase will focus on rebuilding, with a Budget and Spending Review in the autumn.

Positive measures, but unfinished business regarding council support
Cllr James Jamieson, Chairman of the Local Government Association (LGA), said:“The social and economic challenge we face as a nation cannot be underestimated. We are pleased that the Chancellor has acted on council calls by announcing investment in skills, creating jobs, apprenticeships and opportunities for young people. Councils have also been leading calls for a green recovery so initiatives, such as social housing decarbonisation and a focus on green jobs, are also encouraging steps.

“Councils are deeply concerned about local economic decline and rising unemployment. Locally led action will be key if every part of the country is to bounce back from this economic shock — as set out by our discussion paper Rethinking Local. Councils want to work with the Government on how to best target increased national investment to help young people and adults secure jobs and get millions of people back into work.

“With the potential for more than a million young people not in education, employment or training this September, the scale of the challenge facing our young people is enormous. A six-month placement scheme for those facing long-term unemployment is positive and this needs to be available immediately, as many were furloughed or lost their jobs or apprenticeships almost four months ago.

Our recent research found a million green jobs could be created in England by 2050 as the nation transitions to a net zero economy. Localising and devolving skills investment, back to work support and a job guarantee is critical so councils, which are driving the climate change agenda locally, can work with businesses and education providers to ensure everyone benefits from this expected demand for green jobs. We also want to work with government, employers and providers to create green apprenticeship opportunities for young people as part of this green investment package.

“While the measures announced are positive, there is also unfinished business when it comes to fully supporting councils and some sectors. Councils continue to lead local areas through this crisis and are committed to working with the Government to help communities, but further measures are needed to fully address the severe financial challenges they face as a result. It is also vital that the Government develops a package of support for swimming pool and leisure centre providers if we are to ensure that communities do not see their cherished facilities close forever.

“The next six months have the potential to shape the direction of this country for years to come. With full funding and the right powers, councils can grasp the opportunity to not just recover from this pandemic but to go further and address the stark inequalities the virus has exposed, develop a green recovery, address skills gaps and rebuild the economy so that it benefits everyone.”

Long-term funding needed to kickstart social housing building boom
Kate Henderson, Chief Executive of the National Housing Federation — which represents social landlords to more than six million people — commented: “It’s good to see the Government announcing a really comprehensive package of support for young people and others facing unemployment. Social landlords are the biggest investor in employment support and skills after the Government, and sadly since lockdown they have been supporting many young people get financial help and claim Universal Credit. We’re pleased to see the government have listened and the extra funding for some of these schemes announced today is very welcome — we know they make a real difference.

“But helping young people into work alone is not enough to give the next generation a fresh start. We have known for years that the severe shortage of social homes is stopping young people get on in life. Homelessness among young people has risen dramatically, increasing numbers of young people are unable to move out of their parents’ homes and many are forced in to debt because of the high cost of rent. This has all been exacerbated by the pandemic. Waving stamp duty will help some people, but it doesn’t solve the problem of the shortage of homes or help those who are really struggling.

“Earlier this week we welcomed the Government’s confirmation that funding for the Affordable Homes Programme will go ahead and the funding for a social housing retrofit pilot. But significantly more, long-term funding, from the government is needed to kickstart a building boom of social homes at the scale we desperately need. This is the only way to create enough affordable homes, rebuild left behind communities across the country, create local jobs as well providing young people with access to enough training and employment support.”

Good start but more investment needed in new homes
Chartered Institute of Housing (CIH) Chief Executive, Gavin Smart said: “The announcement of £50m to retrofit social housing, plus £2bn towards a new ‘green homes grant’ for lower income households is a good start, although much more investment is needed. It also brings the potential to create much-needed jobs. This must be the first step in addressing the climate change emergency and has the potential to reduce fuel poverty.

“Government must ensure it is followed quickly by a clear plan and resources to get the housing stock up to the targeted energy efficiency levels by 2035 — and meet the Government’s firm commitment to achieve that enormous task. We’re seeing just the first instalment of a promised £9.2bn investment in the Conservative manifesto and we now look to the Spending Review in the Autumn for the Government to demonstrate a clear commitment to delivering a zero-carbon future for the nation’s housing stock.

“The temporary cut in stamp duty might provide an opportunity to stimulate the housing market but, without increasing supply, this is likely to lead to an increase in already high house prices. That’s why we need to see housing — and homes — at the heart of Government’s plans for economic recovery. The Chancellor’s Autumn Budget and Spending Review will provide an early opportunity for government to invest in new homes, including the 90,000 homes at social rents needed each year to solve our acute housing crisis.”

Positive step to engaging young people into careers in housing
Vanessa Howell, CIH Head of Professional Standards commented: “We’re pleased at some of the announcements that the Chancellor made in relation to training and apprenticeships.

“The £2bn ‘kickstart’ programme to create high quality six-month work placements is a fantastic way to prevent those who are at risk of unemployment. This will help them to build their skills, gain experience and develop confidence.

“At CIH, we believe apprenticeships are a great way for employers to develop their workforce but also for employees to continue to learn and grow. The new bonus announced which will give employers a further incentive to hire apprentices over the next six months is a great way to introduce new people to the sector, develop the skills and competences of individuals across the sector and equip the sector to meet the challenges being faced during these changing time.”

“We feel more needs to be done in relation to engaging young people into careers in housing and these incentives are a positive step towards supporting this.”

Liquidity advantages for social housing providers
Bethan Evans, a Partner with national law firm Clarke Willmott LLP, and with specialist experience in clean energy projects and social housing, said: “We were pleased to see the announcement by Chancellor Rishi Sunak that housing associations could be eligible to benefit from the UK Government’s new green economy package.

“Social housing providers may benefit from funding for retrofitting insulation, double or triple glazing, smart meters and modern heating systems in existing stock. This will have liquidity advantages for social housing providers, as well as providing a boost for the economy through trades and supply chains and, most importantly, lowering tenants’ energy bills. The focus on promoting sustainability is also to be welcomed.”

More clarity and confirmation on long-term plans needed
Julie Hirigoyen, Chief Executive at the UK Green Building Council (UKGBC) said: “The Chancellor has recognised the huge potential of energy efficiency to create jobs, and the money announced for upgrading buildings is a much needed first step.

“In respect of homes, we urgently need more detail on how the Green Homes Grant scheme will be implemented. Done well, it has the potential to kickstart a retrofit revolution across the country, but, done badly, this could cause more harm than good to people’s homes and to the industry. It’s crucial to avoid the mistakes of previous retrofit schemes by ensuring that all measures and installers under the scheme are properly accredited and deliver real improvements. The allocation of £50m to social housing is also a welcome announcement, although frankly just a drop in the ocean compared with the Conservative manifesto commitment of a £3.8bn Social Housing Decarbonisation Fund — far more of which should be brought forward immediately.

“Furthermore, given that the announcement contained a range of financial incentives and tax cuts, it missed the opportunity of tying these in more directly with the green buildings agenda. UKGBC has previously called for a VAT cut on refurbishments and variable stamp duty rates as incentives to drive up consumer appetite for more efficient homes, which would stimulate demand for these cash grants.

“Finally, we urgently need confirmation that the announcements are part of a clear, long-term and ambitious plan to bring all our 29 million homes and circa two million commercial buildings up to decent standards of efficiency. Such a plan would include target dates for minimum energy efficiency standards across all property types, and a range of policy and fiscal measures to ensure these can be met. This is not only vital to reaching net zero, but also for ensuring that industry, and the supply chain in particular, can gear up and invest in both the skills and innovations required.”

Green jobs for the green recovery
Claire Petricca-Riding, Head of Planning and Environment at Irwin Mitchell said: “These measures take the equivalent of 270,000 cars off the road. They come on the back of Boris Johnson’s ‘build, build, build’ speech last week when he discussed the levelling up on infrastructure projects.

“It is hoped that such measures will make us assess energy efficiency to cut carbon emissions. Whilst home insulation might not be a sexy message, it is an important one. The combination of this and “green” jobs is not necessarily an overly new message as we have been hearing some of this over the last few weeks — but it does bring the environment to the heart of decision-making and the recovery programme.

“It is a long way from the ‘cut the green c***’ from the previous administration and the reliance on fracking as a primary energy source. It would have been nice for some of the levelling up to focus on renewable energy projects, but as the Shadow Chancellor said — we are assuming this will come in the Autumn budget. Or if not assuming — then we live in hope that this vital element of the ‘green print for a green recovery’ is on the cards.

“This is all positive and a move in the right direction, but when viewed against the German Government’s £36bn spend into climate change-cutting, economy-boosting measures and France’ £13.5bn at tackling the climate emergency; £3bn doesn’t seem to be in the right ball park for our ‘world leading’ green recovery.”

Fundamental change needed in how we look at buildings
Richard Hyams, former Norman Foster architect and founder of award-winning practice astudio, commented: “The Government’s pledge of a £3bn green investment package to decarbonise public buildings and minimise emissions from homes in the UK is a welcome step, we must use this incentive as a stepping stone to go further if we are to meet the UK’s net zero emissions goals by 2050.

“Buildings and construction together account for over a third of global energy use, and nearly 40% of all CO2 emissions in the UK. To ensure a green and socially responsible recovery from this pandemic, we need to fundamentally change how we look at these buildings. We think of buildings as absorbers of energy, but they should become generators. Beyond introducing new insulation for public buildings, we should be assessing its carbon footprint, omitting the use of fossil fuels and retrofitting buildings with innovative materials, such as smart glass or “living walls” lined with algae compounds that can generate biofuels.

“New insulation is vital in tackling fuel poverty as well as increasing the sustainability and affordability of existing homes, but we must also remember we face another crisis in affordable housing, with a third of local authorities missing their housebuilding targets even before the pandemic. The Government and everyone in the sector must look to more efficient and affordable ways of delivering truly sustainable and accessible homes, and use this and other funded incentives to innovate and change the current broken housing model, technologies such as offsite manufacturing to reduce project timelines, lower carbon and waste production, while sacrificing neither the quality of our buildings nor the safety of the workforce.”

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