Stormont fiasco 'making building projects uncertain'
Builders have complained that they cannot plan ahead because they cannot be sure that publicly funded projects scheduled past the end of March will get the go-ahead because of the Assembly’s failure to make a budget.
The Construction Employers’ Federation (CEF), the body representing local building companies, warned that a lack of certainty surrounding how much money would be made available for infrastructure and how it would be spread across projects was making it impossible for firms to plan ahead for ordering materials and managing employee numbers.
No funding lines have been made past March for publicly funded construction projects, and because the Executive has been dissolved, no new budget can be put in place. It is believed there will not be one until March at the earliest.
The CEF previously warned that poor infrastructure was holding back Northern Ireland in the race to secure inward investment.
The construction body also highlighted in its pre-election plea that some of the region’s largest construction firms faced paying double towards training from April. The Construction Industry Training Board’s Levy is 0.65% of payroll, while the new Apprenticeship Levy will be 0.5% of payroll in excess of £3m. It is thought that 25 firms will have to pay both levies from April unless a resolution is found.
John Armstrong, managing director of the CEF, said: “As the industry looks to the new financial year, the lack of agreement by the Northern Ireland Executive on a budget for 2017-21 is a cause of huge concern.
“Uncertainty around the continuation of funding lines is not helpful for business planning nor for government clients seeking to get projects commenced, advanced or completed. With the Assembly now dissolved, it is clear that no budget will be agreed before, at earliest, the middle of March.
“That will come as a major blow to an industry already facing significant sustainability challenges in the short to medium term that are tied to low margins, insufficient pipelines of work, skills shortages and the potential impact of the Apprenticeship Levy.
“A vibrant construction industry in Northern Ireland is absolutely vital to economic growth. The industry employs north of 60,000 people locally and provides substantial additional economic benefits through its multiplier effect.
“However, the latest political impasse comes at a challenging and uncertain time for local contractors. Growth over the last 12 months has been limited, with the short to medium term horizon of new work looking mixed due to a combination of factors, undoubtedly including Brexit.
“The lack of clarity surrounding the Northern Ireland Executive’s budget post-April is adding to these sustainability challenges, and it is incumbent on all parties, post the election, to speedily address outstanding issues and get on with delivering a unified devolved government.”