Desperate times call for desperate measures, and the Chancellor’s Pre-Budget Report (PBR) delivered recently could herald a new era of co-operation between the Government and the construction industry. The PBR announced that £3billion worth of investment that was due to be carried out in 2010-11 is to be brought forward – news that has been welcomed by the Civil Engineering Contractors Association (CECA). Some of that investment will go towards road projects, flood defence schemes and the necessary infrastructure for new social housing projects also announced in the PBR.
In addition to this injection of capital into construction projects, Chancellor Alistair Darling also announced a raft of initiatives designed to take the pressure off small and medium sized companies, including temporary rate relief on some properties and the relaxation of tax payment periods for struggling companies UNDP Recruitment. The aim of the PBR was to stabilize a shaky economy and get businesses moving again, particularly in the battered and bruised construction industry.
The announcement was roundly welcomed by the leading construction organizations, which see the plan as an attempt to give a little more breathing space to an industry that has been savaged by the economic downturn. Many companies also see the Government’s plans as good news for jobs in construction and engineering, motivating the market out of stagnation and back into active recruitment and gearing up for the mother of all fightbacks.
Recruiters will now be able to breathe a little easier as the Chancellor gives them the room they need to spread their tax obligations (including corporation tax, VAT, national insurance and income tax) across monthly installments rather than making large, one-off payments. This means that companies have more floating capital to invest in recruitment and projects that, a few months ago, looked as if they were at risk of being completely mothballed. The plans also allow recruiters to offset losses against profits from the last three years, rather than only the previous year as before. This means that if 2009 turns into the recession that everyone is predicting, recruitment firms will be able to claim a tax rebate, giving them more capital to invest in filling high level construction jobs.