Budget 2021 – What installers need to know

Chancellor of the Exchequer, Rishi Sunak, has delivered his 2021 Budget speech.

The Budget 2021 and Spending Review covered several issues of particular interest to the plumbing and heating industry, including:

  • £24bn earmarked for “a multi-year housing settlement.”
    • £11.5bn of the funding will aim to build 180,000 new affordable homes, with brown field sites targeted for new housing.
  • £1.6bn over three years will be dedicated to roll out new T-levels for 16 to 19-year-olds. It also funds 40 additional hours learning per student per year for 16-19-year-olds.
  • £2.8 billion capital investment so young people and adults can learn in high-quality facilities, establish Institutes of Technology across England, and raise the condition of further education colleges in England.
  • A total investment of £554 million by 2024-25 to substantially increase retraining and upskilling opportunities for adults. This includes giving more adults access to courses at Level 3 in high demand areas such as engineering and digital skills, scales up Skills Bootcamps, supports reforms to the adult skills funding system, and invests in the skills local employers need.
  • No rise in fuel duty.
  • A £421 million Household Support Fund, which will provide Local Authorities in England with an additional support for vulnerable households to cover the cost of essentials such as food and energy bills this winter.
  • To make buildings and homes warmer and more environmentally friendly, the Budget confirmed £3.9 billion to decarbonise buildings, including £1.8 billion to support tens of thousands of low-income households to make the transition to net zero while reducing their energy bills.
  • Increasing public investment in R&D to £20 billion by 2024-25.
  • Up to £200 million funding to deliver eight freeports in England, creating regions that will flourish as hubs for global trade and investment.

However, the Chancellor did receive criticism for the lack of focus on sustainability in his speech, and for cutting Air Passenger Duty, with COP26 right around the corner.

Kevin Wellman, CEO of the Chartered Institute of Plumbing & Heating Engineering (CIPHE) has welcomed the budget: “The Chancellor has built on previous announcements around the Prime Minister’s lifetime skills guarantee and further funding for apprenticeships, by focussing on T-Levels and building new Institutes of Technology. It is encouraging to see the Chancellor investing in vocational and adult education, especially when we are on the cusp of having to upskill engineers for the move to low carbon heating. However, I implore government to work more closely with the CIPHE to ensure that training from T-Levels to technological enhancement is fit for purpose. As ever, we would urge government to push further to help SMEs in developing the next generation of the workforce.

“Overall, the budget looks good for the industry, with funding for new housing and confirmation of investment to make homes and buildings warmer and more environmentally friendly. I sincerely hope that the shortage of adequately skilled installers does not prevent the Chancellor’s aspirations coming to fruition. It is hoped that there will be long term benefits to the supply chain with the confirmation of eight freeports in England with more to come in Northern Ireland, Scotland and Wales. However, this will not deliver the urgent solution required regarding the availability of essential plumbing and heating industry materials as we head into the winter months.

“For consumers, it is encouraging to see government intervention for low income families, with the introduction of the £421 million Household Support Fund. There will be many vulnerable people struggling with high fuel bills, having to make the stark decision between eating or heating this winter. It’s vital that help and support is available for those who need it.”

However, ECA sees the lack of support for the transition to a green economy as a serious omission. The widely trailed skills pledge also won’t necessarily deliver the right type of training to produce the highly skilled and adaptable workers necessary to produce the new low carbon homes and infrastructure promised in the budget.

ECA’s Director of Workforce and Public Affairs, Andrew Eldred outlined the attributes of a highly skilled worker:

“While we welcome the relief for small businesses installing green technologies, creating a low carbon building is not just about new tech, it’s also about what goes on behind the scenes.

“Highly skilled workers are central to finding the right solution to make a building function efficiently. A skilled worker finds the right solutions to reduce carbon emissions, rather using a one size fits all approach.

“Fast-track training routes, such as bootcamps may be counterproductive. If an installer doesn’t understand how their technology interacts with the rest of a building it can prove expensive and even dangerous for the consumer.

“We’d have liked to see more about investment in green upskilling, and particularly about increasing our engineering and technical capacity to deliver the transition to a green economy. We remain concerned about the lack of nationwide planning for EV charging points, and critically there was little about encouraging the further decarbonisation of the grid with more renewable energy and by abolishing disproportionate levies on electricity.”

It was a mixed budget for the Bathroom Manufacturers Association, BMA Chief Executive Tom Reynolds said:

“We welcome the Chancellor’s announcement of additional capital investment across transport, hospitals, prisons and housing. This will not only improve our infrastructure, but will provide some encouraging market opportunity for bathroom manufacturers.

“BMA was also part of a coalition of trade bodies calling for reform of business rates head of the budget. We therefore welcome the Chancellor’s introduction of a new green investment relief and business rates improvement relief. This will benefit not only manufacturers but also our key channel partners in retail and merchanting.

“However, Bathroom Manufacturers will be very disappointed the Chancellor missed the opportunity in the Comprehensive Spending Review to put substance behind the Heat in Buildings Strategy.

“Decarbonising our 27 million existing homes, including through upgrades to bathrooms, is vital if we are to meet our national climate targets. Without coordinated action, adequately funded, home decarbonisation will be at a slower pace than necessary.”