Published on 24 - March - 2010

News

Small firm boost but could have done better, Darling

A helping hand to small businesses was offered by Chancellor Alistair Darling's budget, but pleas for a boiler scrappage extension were rejected.

One million small firms per year, who feel they have been unfairly turned down by their bank for a loan, will be able to appeal to an independent statutory adjudicator, says chancellor Darling's budget report.

The new credit adjudicator service has the power to force banks to lend money to firms if it is judged that they have been wrongly denied credit.

To provide help with the fixed costs of starting and running a small business, Alistair Darling has announced the government will fund a temporary rise in the level of small business rate relief, so that small businesses occupying properties with rateable values up to £6,000, pay no business rates for one year from October 2010.

Procurement

Central government departments are to be set targets to increase by 15% the amount of procurement spending going to small and medium-sized firms.

Many have welcomed the extra support for SMEs.

"For too long the credit facilities for SMEs have been detrimental to their ability to survive and grow, therefore assessing fair bank behaviour and increasing support is very important for the countries recovery" said Michael Ankers, chief executive of the Construction Products Association.

Payment terms

The budget report said all central government departments would aim to pay 80% of undisputed invoices within five days. These departments will include a clause in their contracts with suppliers to ensure subcontractors are paid within 30 days. The government will also consider making immediate payments via electronic invoicing for suppliers.

Capital Allowances

The chancellor has announced a doubling of the £50,000 annual investment allowance for expenditure on plant and machinery. Businesses will be allowed to deduct in the first year investments in plant and machinery, from taxable profits.

Due to the public's take up of boiler scrappage vouchers, campaigners have called for the government to allocate an additional £50 million to the boiler scrappage scheme and to include in the scheme's scrappage criteria, boilers with a higher rating than G.

"We have consistently called for the government to extend both the list of energy saving products that are eligible for a lower rate of VAT and the boiler scrappage scheme", said Michael Ankers, chief executive of the Construction Products Association.

He added: "We are therefore very disappointed that both of these suggestions have been ignored by the government, as these really would have given a clear indication of the government's desire for a more sustainable future".

Green Investment

Darling announced the government would establish a Green Investment Bank with £2 billion for projects that the private sector might otherwise reject. The GIB has a mandate to invest in low-carbon infrastructure. The government will start by investing £1bn and will seek to match this with at least £1bn of private sector investment.

Training

An announcement to extend a guaranteed place in training for all 19-24 year olds who have been without a job for 6 months for an extra year (until March 2012) has been welcomed by ConstructionSkills, the sector skills council for the construction industry. However the organisation is urging government to go further to meet the challenge of skills shortages by supporting funding for all trainees over 19 years and removing barriers to older recruits accessing training.