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Budget 2010: good news for small practices

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The Chancellor of the Exchequer has vowed to increase the number of government contracts given to smaller firms in today’s Budget Statement to the House of Commons 

Alistair Darling said he would increase the proportion of public contracts going to Small and Medium Enterprises (SMEs) by 15 per cent as well as cutting business rates for SMEs for one year from October 2010.

Darling also offered further support for small businesses, announcing that the Government owned banks RBS and Lloyds would hand out £105 billion in new loans, with £41 billion earmarked for SMEs.

The news has been welcomed by RIBA President Ruth Reed: ‘The pledge to widen access to government contracts for small businesses will be particularly welcomed by smaller practices, which are so often frustrated by the procurement process.’

However the Chancellor refused to cut the VAT on the refurbishment and repair of existing housing to 5 per cent, despite calls from a growing number of campaigners.

Reed added: ‘The recent report by Experian for the Cut the VAT coalition outlined the potential increase in jobs in the construction industry which would be brought into the economy with a cut in VAT for home maintenance and repair to 5 per cent. We urge the Government to consider such a reduction of VAT.

‘We need to meet our carbon targets as well as fiscal targets and a cut in VAT would support this in the built environment.’

There was also good news for the regions with the number of civil servants based in London set to be slashed by a third over the long term, with 15,000 posts relocated within the next five years. A potential beneficiary is Bennetts Associates, which has drawn up plans for a civil service campus - dubbed Whitehall of the North - in Manchester.

The other key budget points for architects:

  • Housing:stamp duty holiday for homes under £250,000, to be funded by an increase in stamp duty for homes over £1million. An announcement alongside this for Local Authorities to be required to identify an adequate supply of developable land
  • Infrastructure: a green bank with investment of £2million to be matched by private funding.
  • Support for small businesses: Government owned banks RBS and Lloyds to give £105 billion in loans, with £41 billion going to small businesses. A cut in business rates for one year from October 2010 for SMEs
  • Procurement:increasing by 15%, the proportion of government contracts going to SMEs
  • Young people: extension of work or training schemes for out of work 18-24 year olds until 2012.

Postscript

More than nine out of ten smaller businesses were left disappointed by this week’s Budget, a snap poll has revealed.
 
In a survey of its members, the Forum of Private Business found that just 5 per cent believed Alistair Darling’s proposals will create an environment for their businesses to develop.
 
Similarly, 87 per cent said the Chancellor’s measures will not increase business and consumer confidence.
 
More than two thirds (70 per cent) of respondents said they expect a more realistic budget to be delivered after the general election. And when asked how they rated the budget overall, only 10 per cent of Forum members described it as ‘good’ or ‘very good’, with 52 per cent branding it ‘average’ and 38% describing it as ‘poor’ or ‘very poor’. 
 
Reflecting widespread anger at the planned hike in National Insurance rates, the Forum’s survey also found that a third (45 per cent) of respondents believed the Budget had a negative impact on employment.
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