Iain McIlwee, CEO of the BWF, said the government’s continued commitment in the budget to new housebuilding and infrastructure was “very welcome” and followed an earlier announcement of a Housing Growth Partnership initiative to bring in added support for small builders.
“But our concern is that it may, on closer scrutiny, turn out to be a Budget of indirect and hidden costs to the construction industry, the very engine of growth the Chancellor is depending on most,” said Mr McIlwee.
“Like others, we have serious concerns about the future security of income for housing associations and their likely ability to maintain their development or refurbishment programmes.
“Affordable housing is already on its knees. Planning reforms to be announced on Friday will need to reduce development costs significantly to give us any chance of a sustainable social housing sector in the future.
“Changes to the tax breaks for private landlords are less than expected, but could also impact on the funds available for domestic RMI work, which is so essential to the refurbishment to our ageing housing stock. That’s bad news for builders and the retrofit supply chain.
“And looking at the direct impact on SMEs in the construction supply chain, while an increase in the minimum wage for the lowest paid is welcome, we cannot ignore the fact that such increases have a knock-on effect throughout a business, creating inflation in a firm’s total wage bill.”
The BWF’s latest State of Trade survey among Britain’s joinery manufacturing firms reveals that 73% of respondents had seen a sharp increase in labour costs.