On March 3, 2021, Chancellor Rishi Sunak announced the Budget 2021. The focus on the Budget for this financial year is sustainability. The government has set aside various funds to help companies make the switch towards greener solutions, so that the UK can reach their net-zero carbon goals and tackle climate change. The budget also announces several incentives to help and support various aspects of the construction industry. Here are some of the main highlights from the Budget 2021:
UK Infrastructure Bank
Budget 2021 allots £12bn of funds for the establishment of an Infrastructure Bank in Leeds to boost the industry’s progress towards reaching the net-zero goal. The industry welcomed the changes as they feel that the Budget will lead the industry in the right direction. The setting up of the UK Infrastructure Bank is one of the biggest developments that will help boost the industry in the future. The Bank will launch with an initial capital of £12bn and aims to attract up to £40bn in private investment into green projects. This Bank will also help the government’s lending to local governments for various large and complex infrastructure projects in the future, creating new opportunities. This initiative will surely help the industry move towards a green future and reach net-zero goals
Green Saving Bond
The Budget mentions the introduction of a Green Saving Bond to encourage people to take the opportunity to contribute to tackling climate change.
The Budget sets £10m of seed funding to back up the MHCLG (Ministry of Housing, Communities and Local Government) for setting up the MMC(Modern Methods of Construction) Taskforce.
Benefits for SMEs
Various schemes are to be set up to help small and medium businesses. To encourage digital growth, the Budget talks about a scheme that allows small businesses to access free online technology advice along with 50% discounts on new productivity-enhancing software. The government also introduced a ‘Help to Grow’ scheme to assist SMEs to get management training to help them improve their business. The Budget announced doubling the incentives for businesses that hire apprentices.
The Budget 2021 makes provision for the extension of the furlough scheme, which is specifically to pay 80% of employees’ wages, until the end of September.
Funding for Infrastructure
Over £1bn will be allotted for 45 new town deals. Additionally, there is funding set aside for setting up the infrastructure for offshore wind farms.
Corporation tax is expected to increase to 25% in 2023.
What do these changes mean for the industry?
Certain provisions made for in the Budget, such as the Help to Grow initiative for SMEs, will certainly give the industry the training it needs to grow and adapt to the new normal. Further, the extension of the Furlough Scheme also takes the stress off companies that are having a difficult time when cash flow is tight and can give companies the time they need to get back on their feet. Additionally, the extension of the apprentice fund will further help employers taking on apprentices and encourage employers to create job opportunities.
The Budget also announced that corporation tax would increase to 25% but not until 2023. This delay can help the industry greatly at a time when many small and medium-sized businesses are struggling due to the pandemic.
Lastly, the Budget includes various initiatives to boost the transition towards the net-zero goals for the industry. The allotment of £126m of funding towards 40,000 traineeships is a great step towards getting the industry back on its feet post-covid and helping them move towards greener solutions. The Budget has ensured appropriate funding for training and education within the industry to help the achievement of sustainability goals. Such provisions will ensure that the industry that is lacking the right skill base will learn to innovate and help the government reach the 2050 target.