£4,000 to take on apprentices – scheme extended

Charlie Revill, an apprentice with Forest of Dean Stone Firms (FoD), completed his level three apprenticeship at Bath College in September. He says last year was difficult but that “I learnt more than I expected to”. Kirk Imm, his manager at FoD, says: “He’s an exceptional student. He’s always had a ‘thing’ for stone.”

The government's offer of up to £4,000 for each apprentice a company employs has been extended at least until the end of March 2022. 

And the CITB is still paying training grants to cover travel and accommodation, as well as training fees, for the apprentices while they are at college if they have to travel and stay away.

Cash incentives for firms were introduced as part of the national Plan for Jobs initiative in July 2020. They are worth up to £3,000 on top of the £1,000 already available if you take on an apprentice who is aged 16-18, or under 25 if they have an education, health & care plan, or have been in the care of their local authority.

The payment can be spent on anything to support a company's costs. It does NOT have to be repaid.

The incentives were originally available until September this year, but now the government has extended it so companies can continue to benefit into 2022. Applications for the cash open on 11 January 2022.

A Plan for Jobs progress report says more than 85,000 apprentices have been hired under the incentive payments scheme so far, with 75% of those taken on being under 25.

From 11 January you will be able to apply for the payment of £3,000 for apprentices that start with you any time from 1 October 2021 to 31 January 2022. You have to get the application in before 15 May 2022.

To apply for the payment you need to create an account on the Government’s dedicated Apprenticeships Portal (click here to go to that). Once your account is set up, you can make your claim.

You can read more about the offer on the Construction Leadership Council's Talentview website here.

 

Understandably, the value of stone arriving in the UK took a dive as a result of the first Covid-19 lockdown in 2020. Nobody was quite sure what was allowed and what was not, including the government. This was, after all, a novel experience for us all. Many building sites and companies throughout the construction industry closed down. However, the government then made it clear construction work could continue and most of it resumed after a five-to-eight-week shut down.

With a lot of the stone destined for the UK coming from China and India and already on the sea by the time the UK was locked down, there was a bit of a lag between the start of the first lockdown towards the end of March and the fall in stone arriving at the docks. By the end of the year, imports were ahead, month on month, of their 2019 level. Brexit probably played a part in that. When the UK left the European Union at the start of 2020, nobody was too sure what it would mean and there was a general feeling that it could result in a drop in sales. As it turned out, whatever the impact of Brexit might have been, it was lost in the impact of the Covid-19 effect, which saw the biggest fall in UK GDP since the 'Great Freeze' of 1709.

Construction was hit worst. It saw the biggest fall of any sector by a considerable margin, according to the Office for National Statistics (see graph below).

On the other hand, it had the best recovery and by the end of the year was almost back to where it had started the year, while the rest of the economy was still lagging further behind.

Stone imports have done even better, as the graph below, based on tax (essentially VAT) information from HMRC shows.

Some companies did not shut down even during the first lockdown. It tended to be the big national builders that closed sites, while some local builders carried on working and stone companies carried on supplying them, even in the face of the occasional over-zealous police officer reportedly slapping on a spot fine, believing that building workers were not essential industries. The government did not help because it did not declare that construction workers were essential, but Alok Sharma, at that time Secretary of State for the Department for Business, Energy & Industrial Strategy, did write an open letter on 31 March praising construction companies for continuing to work, which he said was in line with the Chief Medical Officer's advice. Still a little ambiguous, but construction sites did start to open again afterwards and most of the rest had resumed work by the time the pubs re-opened in July. Of course, that led to a rise in Covid-19 outbreaks again and there was another lockdown by the time Christmas arrived.

The virus distracted people's attention from Brexit, although the end of the transition year (2020) of Britain leaving the EU did bring some disruptions at the docks, compounded by a new computer system at Felixstowe taking time to get up and running properly, a blockage caused by coronavirus PPE that was apparently the wrong kind so the medical community did not want it, and reportedly a certain amount of increased activity as companies, including stone companies, stocked up in case there were any delays as a result of the new import regulations from Europe (which some firms said there were, including a difficulty in finding drivers to move stock from the docks).

It is perhaps a little early to tell exactly what the outcome of the coronavirus and Brexit will be. The government has put hundreds of billions of pounds into helping companies and their employees survive the impact of the events, which has helped to minimise the impact so far, although an extra 700,000 people, mostly younger people (under 35), have joined the unemployed. More jobs may go when the government ends the furlough scheme that has kept people on at least 80% of full pay when they are not working.

The graph below (again from HMRC tax payments) puts last year in the stone industry into a longer term perspective. Because tax returns can be delayed, the figures for last year will continue to be adjusted for several months, but the adjustments are not usually major and are normally slightly upwards. Although the fall in imports to May were significant, by the end of the year most of the deficit had been recovered. The year as a whole was not as bad for the stone industry as the economic crash following the 2007-08 credit crunch had been in terms of the value of imports, and the indications are the recovery has been quick this time, which it was not after the 2009 contraction.

The stone industry in the UK before the coronavirus 

According to data from HM Revenue & Customs (HMRC - the UK tax collector) there was a jump in the value of stone imports in August in 2016 following the Brexit vote, but to some extent this will reflect the increase in sterling prices being paid as a result of the fall in the pound following the referendum. However, importers and their customers had already been making significant changes in their buying patterns as a result of the economic crisis of 2008, buying more lower price stone from the Far East and less from Europe.

The value of UK stone imports has returned to an upward trend since 2012. There was some hesitation about taking projects live towards the end of 2015 and the first half of 2016 as the referendum in the UK on leaving the European Union approached. Since the result was announced that the UK was to leave the EU (Brexit, as it is known) after the vote on 23 June 2016, confidence seems to have returned to the market, even though the result was unexpected by most people. Stone companies were busy in the summer and autumn of 2016. Many were also busy for much of 2017, as is clear from the figures now in (the graph below showing the long term growth in the stone market in the UK was added in July 2018).

According to data from HM Revenue & Customs (HMRC - the UK tax collector) there was a jump in the value of stone imports in August in 2016 following the Brexit vote, but this will reflect the increase in sterling prices being paid as a result of the fall in the pound following the referendum. However, importers and their customers had already been making significant changes in their buying patterns as a result of the economic crisis of 2008.

According to the World Bank, the UK economy as a whole showed consistent growth since 2010 and greater growth for much of that time than seen in general in the developed world, due in no small measure to a rapidly increasing population. In the year to June 2016 UK population grew again by more than 500,000 to top 65million, with 335,600 of the extra people the result of net migration and, therefore, immediately economically active.

The UK population grew by 5million people in the decade to the end of 2018. The growth has been reflected in relatively strong construction activity, although in 2017 and 2018, following the Brexit referendum, Europeans have started to go home ­– there has been a net loss of slightly more than 100,000 people from the former Eastern European countries. Of the 165,000 EU27 nationals working in construction in the UK, the government number crunchers at the Office for National Statistics estimate that 71% are from the former Eastern European block and 10% from Ireland.

With the Brexit vote out of the way, investment and consumer spending on property seem to have soared ahead, encouraged by government schemes and the removal of stamp duty (a tax on house purchases) on lower end housing. Natural and engineered stone supplied by stone companies remain materials of choice for commercial properties, home repair, maintenance & improvement (RMI) and higher-end new build housing, as well as hard landscaping, conservation work and memorials.

The graphs here, showing the value of imports and arrivals at current prices and the volume, are from figures produced by HMRC, largely from VAT returns. Only trade (imports and, from Europe, arrivals) are recorded. Most stone (and a still growing proportion), by volume and value, comes from India and China. Other significant areas that stone in the UK comes from include Turkey and, increasingly, the Middle East and North Africa, especially Egypt.

More stone is being used in construction in the UK all the time – for cladding, interiors, hard landscaping and roofing (almost all slate, mostly from Spain and Portugal). The figures here also include memorials. There was a spike in the value and volume of stone landed in the UK from overseas in 2008, followed by a fall after the economic crash and then a return to growth, although the prices being paid for it have fallen considerably.

The figures shown here do not represent all the stone coming into the UK because of the way they are collected. Natural Stone Specialist magazine has produced the graphs from figures using the most relevant commodity codes used by HMRC. We believe this will include the majority of stone coming into the UK while excluding other materials, and the same data sets are used for each year to produce meaningful comparisons.

One of the most striking changes since the economic crisis of 2008 is the fall in the price of stone, although it lagged behind the crisis (understandably). This reflects the increasing proportion of stone coming from low cost parts of the world rather than Europe, the bargaining strength of the UK as its economy recovered quicker than most of the rest of the world after 2008, and a fall in world prices of stone reflecting a fall of international demand, especially in America, although that has since recovered. It is also partly a consequence of the strength of the hard landscaping sector, which has grown faster than most other sectors and uses stone that is typically less expensive than that used in other sectors (polished marbles and granites used for interiors and memorial stones are more expensive than granite and sandstone paving and walling).

The value of stone coming into the UK is calculated in sterling prices at current values (ie the exchange rate at the time the value was recorded). The fall in the value of sterling of 20% and more against major foreign currencies following the Brexit referendum vote in June 2016 will clearly have put up these prices, although, anecdotally, suppliers gradually passed those increases on rather than putting up prices by the full amount straight away. Overseas suppliers also took some of the hit, so the prices of stone landed in the UK were not immediately much higher.

For the whole of 2016, the value of stone imports, according to the commodity codes used here, was £413million, about 5.5% more than in 2015. That was for 4.2million tonnes of stone, up 10.5% on 2015. Compared with 2008, that was 96% growth in volume but, due to the steady fall in the prices of stone arriving in the UK, meant the value of the stone was actually less than in 2008 (a fall of 3%). One reason for the fall in prices is because less stone came from Europe - down 26% by volume. A substantial amount of the stone still coming from Europe is roofing slate from Spain and granite setts from Portugal for landscaping. It is the more expensive polished marble and finished masonry that has seen most of the downturn, so the average price of stone from Europe has fallen 40% since 2008. From the rest of the world the fall in price is 18.6%.