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Budget poses plenty of questions for industry

Last week’s Budget and accompanying Fixing the Foundations report provided more than expected for construction to chew over, with a few unexpected proposals that pose some big questions:

1) Can Network Rail survive in its present form?

We already knew Sir Peter Hendy was to be put in charge of sharpening procurement and delivery at one of the industry’s biggest clients, but appointing HS1’s Nicola Shaw to review the funding and structure of Network Rail could see the surgery become more invasive, meaning a full-scale break-up may even be on the cards.

2) Can we finally ramp up housebuilding?

There may have been a degree of smoke and mirrors around George Osborne’s planning shake-up, but the chancellor does seem to be baring his teeth at NIMBY councils.

Add to that the £100m housing growth fund and we could see smaller housebuilders return to the market.

“The chancellor does seem to be baring his teeth at NIMBY councils”

But the real concern has to be how much this increase will be offset by the expected drop in housing association developments after social rents were cut.

No doubt Mr Osborne believes HA surpluses can take up some of the strain of welfare cuts - but it doesn’t make for a coherent housebuilding policy.

3) Is productivity the new sustainability?

That certainly seems to be the case given the decision to shelve the 2016 zero-carbon homes target.

It’s a move that has understandably upset many in the sector.

There are equivalent EU targets in place for 2020, so this is merely a delay - one which will on balance remove obstacles for SMEs and allow housing performance issues to be ironed out.

The really low-hanging fruit is in the existing stock, where again the red box was unhelpful.

We’re still signed up for an 80 per cent cut in emissions by 2050, but where will the momentum to get there come from?

4) Whither the CITB?

On the face of it, last week’s announcement of a training levy across all industries should at least address what at times can seem an arbitrary system over who does or doesn’t pay.

“Such a radical step by government is already prompting outsiders to question whether the industry still needs its own training board”

But such a radical step by government is already prompting outsiders to question whether the industry still needs its own training board.

As a bare minimum, the consultation expected in the autumn over the proposed system could afford the opportunity to ask whether the rules the CITB is bounded by are counter-productive to the bigger picture of producing more apprentices.

It’s too early to say whether George’s Budget box surprises will amount to major disruptions or minor deviations from the status quo.

But they certainly provide plenty to think about over the summer and, for organisations such as the CITB, plenty to play for.

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