Calls for government’s economic stimulus plan to prioritise housing
A new economic stimulus package unveiled by the Scottish Government should prioritise housing as well as commercial and industrial projects, the Scottish Building Federation has said.
First Minister Nicola Sturgeon yesterday announced plans to accelerate capital spending on infrastructure projects, starting with an additional £100 million of funding in this financial year.
The move is part of a package of measures to support and stimulate the economy in the wake of the EU referendum.
Ms Sturgeon said the capital funding will be used to speed up delivery of health and other infrastructure projects to support and create employment in the sector however the Scottish Building Federation has urged the Scottish Government to focus its efforts to accelerate capital spending on those sectors of the industry most likely to boost employment.
Vaughan Hart, managing director of the trade body, said: “In this period of economic uncertainty following the Brexit vote, any moves to accelerate investment in construction projects are of course welcome. However, if the objective is to stimulate employment within the Scottish construction industry, we would argue that investing in housing and smoothing the path for commercial and industrial projects ought to be the priority.
“Over the past ten years, we have seen a dramatic shift in industry output away from housing and commercial and industrial activity towards infrastructure, which accounted for almost 30 per cent of a record Scottish industry output of more than £14 billion last year. At the same time, industry employment has declined from more than 235,000 in 2008 to 175,000 in 2015.”
Vaughan Hart added: “A strategy focused on rebuilding industry confidence and stimulating employment needs to target additional funding towards housing as well as clearing obstacles to commercial and industrial output. A good start would be to reinstate business rates relief for empty industrial properties.”
Industry body Homes for Scotland highlighted the importance of channelling such funding into the delivery of more desperately needed homes, in a move which would boost jobs and the economy.
Chief executive Nicola Barclay said: “This £100m funding boost is welcomed as a means to support and stimulate the economy in what are uncertain times for many industries, including the home building sector.
“With projects being assessed for accelerated funding based on key criteria such as the number of jobs that will be supported or created and the likely impact on the supply chain, those focused on the delivery of more new homes should be prioritised given the significant social and economic benefits this offers.
“Every new home built in Scotland supports four jobs and helps boost economic growth through the supply chain. The industry also contributes to improving health and education outcomes and fighting fuel poverty.
“We would therefore urge the Scottish Government to prioritise housing when considering how these funds will be allocated in order to secure the thriving economic future we all want to see.”
Gail Hunter, director RICS in Scotland, added: “The Scottish Government is right to recognise the continued uncertainty affecting business confidence and development. Increased investment in job creation and infrastructure investment are vital to creating stability. With a growing housing crisis, and concerns around connectivity, both the Scottish and UK Governments must encourage prospective investors to consider infrastructure projects, and maintain Government investment; together these measures will generate the highest economic impact, and will help create and maintain jobs.
“Our most recent Construction Market Survey indicated a decline in market confidence, therefore accelerated capital spending on projects will provide confidence to the construction industry through infrastructure funding and development. This will help increase stability during a period of uncertainty and ensure that the UK and Scotland are well-placed to take advantage of growth opportunities in the future.”
Projects will be assessed for accelerated funding against a range of criteria including how quickly work can start, the number of jobs that will be supported or created, the likely impact on the supply chain and geographic spread.
Further details of the Capital Acceleration Programme, including the projects to be supported by the initial £100m of additional funding and details of funding for future years, will be announced in due course.
The First Minister also called on the UK government to give early certainty about EU Structural Funds and to urgently announce its own economic stimulus package, which would enable the Scottish Government to do even more to accelerate capital spending.