A neutral Budget

 

5 April 2012

George Osborne's third Budget presented few surprises - and not just because it had been so thoroughly leaked to the press. Osborne's speech had something of the déjà vu about it, because it was essentially fiscally neutral - the Chancellor gave with one hand while taking away with the other. In the current economic climate, he has little room for manoeuvre and economic policy is still very much framed by the Comprehensive Spending Review's spending cuts.

Yet the Chancellor did manage to offer the facilities management sector some welcome crumbs of comfort. The 1 per cent off corporation tax this year to take it to 24 per cent (and 22 per cent by 2014/15) will boost the FM supply side. The rise in personal income tax allowance to within spitting distance of the £10,000 mark from April 2013 will make millions of lower-paid workers in the facilities sector, such as cleaners and security guards, £220 a year better off. And the extra £100 million to improve military accommodation will be a boost to FM service providers working with the MoD at a time when other areas of defence are facing cuts.

Osborne's additional £150 million to support the roll-out of super-fast broadband in Belfast, Brighton, Bristol, Cardiff, Edinburgh, Leeds, Manchester, Newcastle and Birmingham is excellent news and will help businesses to move away from major cities and set up in other areas, easing congestion, reducing commuting times and improving work-life balance.

The review of the much-criticised Carbon Reduction Commitment, meanwhile, is a step in the right direction. Many will agree with Osborne's description of it as "cumbersome, bureaucratic and imposing unnecessary cost on business". But hinting that he may scrap it and introduce an alternative environment tax in the autumn creates uncertainty for business and many will have hoped that the complex CRC would have been completely scrapped at this Budget. Meanwhile, this year's CRC payments will still go ahead.

The addition of enhanced capital allowances - allowing firms to write off more investments against tax - in five of the UK's 21 Enterprise Zones, including London's Royal Docks, will create local jobs and boost growth. There was also welcome news for planning and infrastructure with government support for £150 million of tax increment financing to help councils promote development and £270 million for the Growing Places fund, which enables the development of local  funds to address infrastructure constraints.

However, many FM businesses will be disappointed that more was not done to cut red tape and to accelerate deregulation. The consultation on the introduction of a large annual charge on properties held by corporates may cause alarm bells.

Overall, the economic picture looks more positive with the independent Office for Budget Responsibility revising up UK growth forecast for 2012, from 0.7 per cent to 0.8 per cent with 2 per cent next year. Slow progress perhaps, but progress nonetheless. Yet while the 2012 Budget offers some small areas of headway for FMs, it's what happens when the growth forecast becomes growth fact that is more important.

Gareth Tancred, chief executive of the BIFM