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£5bn Government injection to help small builders

At the Conservative Party conference in Birmingham this week, Communities Secretary Sajid Javid and Chancellor Philip Hammond revealed that the government are planning to make new money available for builders in the UK.

This will consist of a £2bn Accelerated Construction scheme to make publicly-owned brownfield land available for quick development and the already announced £3bn Home Builders Fund, which seeks to help fund the development of 25,500 homes by 2020.

How it will work

The intention of the new funding is to provide short-term loans for small builders, which will be borrowed from the public sector. This will help them build quicker as public land will be made available with outline planning permission already available to them and money will enable them to undertake any required remediation work on the brownfield sites prior to construction starting.

The ministers are also urge builders to use modular technologies to meet housing demand, as it will shorten the delivery time.

Redevelopment

At the conference the ministers also confirmed that they are also pushing ahead with allowing office blocks to be repurposed or replaced entirely with residential developments. This alone has the potential to create 4,000 homes by the start of 2022.

Chancellor Philip Hammond commented: “There has been a housing shortage in this country for decades, and this Government is determined to take action to tackle it. “We’ll use all the tools at our disposal to accelerate housebuilding and ensure that, over time, housing becomes more affordable. That is why we are committing £2 billion of additional investment towards this.”

Sajid Javid concluded: “Tackling the housing shortfall isn’t about political expediency. It’s a moral duty. And it’s one that falls on all of us. Not just in Parliament, but in business, in local government and in our communities. So my message today is clear: it’s time to get building.”

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Major Chinese deal to boost Birmingham housebuilding and economy

A deal has been signed between Birmingham City Council and the fifth largest property developer in China to focus on HS2 and deliver homes for Birmingham.

As part of the agreement, which is estimated to be worth up to £2bn to the local economy, the Hong Kong Stock Exchange-listed company Country Garden intend to explore large-scale investment opportunities in and around the city.

The news of this agreement follows this week’s China visit by Prime Minister Theresa May for the G20 summit. Following the referendum result, the government have being investigating the potential for Chinese investment in major UK construction projects..

Council leader Cllr John Clancy commented on the potential that China have to offer, saying “The landscape has inevitably changed post-Brexit and Birmingham is already out of the starting blocks. That’s why I’m here selling our city to many of China’s leading investors.

“This agreement is about bringing good jobs and quality homes to Birmingham. Country Garden have a proven track record of building homes at pace and scale. They have played a major role over the last 20 years, as housebuilders have met the massive demands of China’s rapidly expanding economy.

“Bringing this level of investment and experience to Birmingham would be a massive economic boost to the region’s businesses, skills base and families. It’s about bringing new, big capital spend to the city, quickly. This is about building houses, jobs and futures for young Brummies and families across the region.

“Country Garden understand the demands in Birmingham and are clearly excited at the prospect of investing in our young, growing city.”

Country Garden founder and chairman Mr Yang Guoqiang commented “I have been impressed with Birmingham’s ambition and huge potential and I am delighted to announce this investment commitment to support significant housing and infrastructure development in the city.

“We have a proven track record in delivering quality housing at a scale to match Birmingham’s ambitions and with major projects coming to the city, including the forthcoming High Speed two project, these are exciting times for Country Garden and Birmingham.”

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Construction bosses in ‘tax scam’ warning amid calls for HMRC to investigate

Bosses at Crossrail and some of the UK’s biggest construction firms are being warned against engaging in a ‘scam’ which is aimed at dodging new tax rules introduced by HM Revenue and Customs to close tax loop holes and clamp down on ‘umbrella’ employment models.

The warning in a letter to bosses from Britain’s largest union, Unite comes after the union obtained documentation of employment business service providers continuing to offer construction firms an alternative to direct employment to reduce national insurance and employment costs by more than 25 per cent.

Unite is also calling on HMRC to investigate the scam which sees employment business service providers offering ways to side step the new supervision, direction and control test (see notes), which came into force on 6 April, by engaging skilled workers on a self-employed and ‘tax efficient’, basis.

The new ‘test’ was introduced by HMRC in part to prevent employment business service providers or ‘intermediaries’ from engaging workers through a ‘tax efficient’ ‘umbrella’ employment model.

The loophole allowed employment business service providers and employment agencies to minimise employer national insurance contributions and drive down wages by getting workers to claim tax relief on travel and subsistence to supplement their low pay.

In a presentation seen by Unite, one employment business service provider boasts of consulting with ‘highly skilled legal and financial advisors’. The firm goes on to offer a ‘status check’ on whether any skilled workers can be employed without supervision, direction or control. A move not only designed to reduce employment costs and be ‘tax efficient’, but one which Unite says could undermine health and safety and erode industry standards.

Unite national officer, Bernard McAulay said “Everything we’ve seen and heard points to a brazen attempt by employment business service providers to side step a tax loophole which was closed just last week.

“We’ve already had reports from construction workers being pressured to declare themselves self-employed and sign contracts agreeing to accept liability for any unpaid tax and national insurance should the tax man come knocking as a result of this scam.

“The reason HMRC closed this tax loophole in the first place was because employment business service providers were exploiting temporary workers by getting them to claim tax relief on travel and subsistence to top up low wages at the same as minimising employment and national insurance costs.

“This latest mutation of bogus self-employment would effectively see workers, who should be directly employed, being stripped of holiday pay and their automatic enrolment pension contributions, while allowing employers to pay no national insurance and circumvent nationally agreed rates of pay.

“We know that this ‘scam’ has been circulated throughout the construction industry and to companies on major projects, such as Crossrail by of at least one business service provider.

“Unite urges HMRC to investigate and calls on the construction industry to turn its back on ‘shady’ employment practices which are designed to bust nationally agreed rates of pay at the expense of the taxpayer.”

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