OUR ECONOMIC AND SOCIAL IMPACT 2017-18

Building HOMES

Building VALU E INTRODUCTION

A breadth of experience, a depth of purpose.

Bellway has over 70 years of housebuilding experience, having grown from a family-owned, local business in North East England to become one of the UK’s largest house building groups.

Our operations not only impact sizes that meet local demand and the number of quality new homes customer requirements. we contribute to the national We directly employ over 2,900 housing stock but also the people, and hold evolution of local communities, the Home Builders and employment in sectors from Federation (HBF) building trades to sales. In the last 5 star rating - year1 alone we sold 10,307 homes a long-standing, (2017: 9,644) in a range of styles established indicator that reflect local influences and in of quality.

2 INTRODUCTION

A period of The UK’s population has been jobs and employment. The HBF growing at its fastest rate in 70 estimates that new house building challenge, and a years, and housing availability generated £38 billion of economic uniquely placed is a major issue of concern at all output to the Great Britain levels, from policy makers and economy company. planners to would-be purchasers. in 20172. Operating through 20 divisions We believe that housebuilding is covering the main population pivotal in ensuring the sustained centres of England, Scotland economic prosperity of the UK, and Wales, we are extremely and in this, our second Economic well-placed for, and committed and Social Impact Report, we set to, playing an active role in out an overview of the benefits addressing this concern. Indeed our activities deliver. we have increased the number of homes we have sold by 33% in the last three years, and by 82% in the last five years 1.

Investment in new homes is vital for regional economies as well as 1 All 2018 figures in this report are for the the broader national economy, Bellway financial year ended 31 July 2018. playing a significant role in directly 2 The Economic Footprint of House Building in England and Wales (2018) by Home Builders stimulating growth and supporting Federation and Nathaniel Lichfield & Partners.

This report aims to quantify these benefits, setting out our socio-economic impacts in the following areas:

Economic impacts

Contributions to public finance

Jobs and skills

Contributions to local authority finance

Investment in community projects

3 BENEFIT OF NEW HOMES

New homes – New homes deliver a wide range homes can be viewed in terms of of advantages that not only benefit quantitative and also qualitative benefits the customer directly, but also the benefits, not only raising the number broader economy and society. of homes but also the average far beyond According to the English Housing quality of the housing stock. Survey 2016 - updated in 2018 numbers. A further study undertaken by the - which looked at stock condition National House Building Council and age, some 56% of the Foundation4, a body that carries English housing stock was built out quality research in relation to prior to 1965. Private rented sector dwellings are on average the building industry, cited the older, with 35% built before salient features of new homes. 1919 compared to 21% of These included their ‘new blank owner-occupied homes3. As a canvas’ condition, with no result, with each new expensive home improvements development complying with the or renovations required; the most up-to-date and increasingly 10-year Warranty on structural stringent standards, from energy work; and manufacturers’ performance to security, new warranties on kitchen appliances.

3Source: English Housing Survey - Stock Condition 2016, (updated July 2018), Ministry of Housing, Communities, and Local Government. 4The Advantages of New Homes (2016) by the National House Building Council (NHBC) Foundation.

4 BENEFIT OF NEW HOMES

New homes are, by design, now Toughened or laminated safety as well as providing safe places for highly energy efficient. Each new glass is utilised in doors and children to play. In other words, home effectively embodies an windows, which are also fitted they help create not only new but automatic upgrade to incorporate with additional locks and security sustainable communities. the latest standards of insulation, devices, part of an elevated draught-proofing, and double standard of new-home safety glazing, as well as efficient and security. modern heating systems and Finally, for many people moving boilers. Indeed, a new home now to new developments, a new costs approximately half as much home offers the opportunity to to heat as a Victorian home of meet new friends and neighbours equivalent size. who are all part of a process of New homes also come with establishing a new community modern wiring, circuit breaker together. Well thought out public consumer units, and realm can help foster community, mains-powered smoke alarms. leisure and recreational activities,

5 ECONOMIC IMPACT

Multiplier Encouraging home ownership, brownfield land make no impact especially for the young and on urban sprawl or encroach effects - for first time buyers, is a policy on green-belt, brownfield supported by all major parties. development also supports our macro The government’s Help to Buy community regeneration and economic schemes continue to be an local economies. important mechanism to support Furthermore, our ongoing land this universal aspiration and in impact. purchases continue to inject 2018 39% of Bellway homes sold significant sums of money into were via the various Help to Buy the economy and in 2018 we schemes. invested £784 million in land In 2018 34% of our homes were (2017 - £655 million), bringing the sold to first time buyers (2017 - number of plots with detailed 32%), helping around 3,500 new (DPP) that homeowners get their first foot we currently own or control to on the property ladder who 26,877 (2017 - 25,655). otherwise may not have been able An oft-cited criticism of developers to purchase. In addition, a further in general is that they ‘land bank’ 20% (2017 - 22%) of our homes to the detriment of the provision were sold to affordable housing of much-needed new housing. providers and councils, allowing Our business model focuses them to be let at low rents or sold on securing land which either as affordable home ownership to benefits from outline planning people in housing need. permission, or is assessed as being Additional economic benefits likely to obtain DPP within the next derive from the type of land we few years. With a buoyant housing develop. Last year 53% of our market and strong customer new homes were built on land demand, we consistently aim to previously developed (2017 - 59%). start construction on sites as soon Not only does building on existing as is practicable.

20% 34% 53% delivered to homes sold brownfield affordable housing to first-time land providers buyers

6 ECONOMIC IMPACT

However the pace at which we can progress with developments is driven by a number of factors - how quickly detailed planning consent can be secured and implemented; market demand for houses; availability of a skilled workforce and materials; and the installation of utilities. A key issue we face is the shortage of skilled trades, which continues to be a pressing concern. Along with the rest of the construction industry we are investing in training and apprenticeships to ensure we minimise the impact that any skills shortage may have on our capacity to build. The economic benefits that result from the direct employment of our 2,900 plus staff across our 20 sub-contractors and suppliers, operating divisions are significant, and include the contributions to who again contribute to the local the economy via PAYE tax and and national economies. We National Insurance, as well as estimate that in 2018 the total their spend in the local number of jobs created by economies. In addition our Bellway’s operation in the UK construction activities lead to economy was between 27,000 5 Using data and metrics from The Economic Footprint of House Building in England and 5 significant indirect employment and 32,000 (direct, indirect and Wales (2018) by and across our network of induced employment). Nathaniel Lichfield & Partners.

£784m 26,877 27,000 - invested in land plots with 32,000 detailed planning permission total jobs

7 ECONOMIC IMPACT

Supplier spend remaining in the UK

£1.3bn Local contracts

£56m £100m Group contracts in new household spend

TOTAL £1.4bn

Spend in our supply chain also new home-owner spend provides provides a significant boost to the additional local investment. Using 6 The Economic Footprint of House 7 economy. Of our £1.6 billion data from the HBF , we estimate Building in England and Wales (2018) by spend, we estimate around £1.4 that new Bellway households Home Builders Federation and Nathaniel Lichfield & Partners estimates that at 6 billion remains in the UK , and contributed a one-off spend of £56 least 90% of housebuilders’ supply chain with the vast majority undertaken million (2017 - £48 million) to both spend stayed in the UK. 7 The Economic Footprint of House Building by our local divisions, the regional the local and national economies. in England and Wales (2018) by Home economies where we operate are Ongoing local spend from these Builders Federation and Nathaniel Lichfield & Partners estimates one-off spending on a significant beneficiaries, in a households (local shops and new home is at least £5,000. context where structural regional services) will contribute an 8 The Economic Footprint of House economic imbalance is a real and estimated £270 million per year Building in England and Wales (2018) by Home Builders Federation and increasingly high-profile issue. (2017 - £231 million)8. Nathaniel Lichfield & Partners quotes data from the Office of National Statistics In addition to this direct investment Family Spending Survey 2018 that show households across England and Wales by Bellway in local economies, spend an average of £503 a week.

£1.6bn £1.4bn £270m supply chain spend retained ongoing annual spend in UK spend from new households

8 CONTRIBUTIONS TO PUBLIC FINANCE

An ethos of Trust in business continues to be a In 2018 we paid £121 million in topic of debate in the media. This corporation tax (2017 - £107 million) responsibility - is especially true around issues of and in total, across Bellway and tax, where government revenues our employees, around £216 contributions to are vital to the funding of public million in tax revenues was paid public finances. services such as the NHS, schools, to central government (2017 - £186 and infrastructure, but which face million). These amounts are on growing pressure of demand. top of other contributions such Naturally, Bellway has an as landfill tax, business rates and obligation to our investors, but we non-recoverable VAT. In addition, are also committed to paying our our customers pay Stamp Duty fair share of tax. Our strategy is to Land Tax to the government on generate long-term sustainable the purchase of their new homes, value for shareholders, whilst and we estimate this to have been being mindful of the spirit and in the region of £34 million (2017 - legality of tax legislation. £36 million) in 20189.

Contribution to public finance

£31.8m £121.2m PAY E Corporation tax

£37.0m Stamp Duty Land Tax*

9Stamp Duty Land Tax has been calculated £26.0m based on the average selling price of Bellway’s private homes which was £323K Employers’ and *On the purchase of land by Bellway for in 2018. The fall in the total compared to Employees’ NI development (data from Bellway p.l.c.) 2017 is as a result of the government’s introduction of a zero Stamp Duty Land Tax rate for first time buyers paying £300,000 or less for a property from 22nd TOTAL £216.0m November 2017.

9 CONTRIBUTIONS TO LOCAL AUTHORITY FINANCE

Stimulating Our housebuilding activities revenue raised from new-build contribute to public finances homes, NHB is currently paid local areas - at a local level as well, where each year for five years. In 2018 we local authorities face ongoing estimate that local authorities will contributions to and severe funding shortages have received an additional £53.7 local authority combined with growing demand million boost as a result of Bellway for services generally, and homes sold (2017 - £52.3 million). finance. particularly for those required These combined contributions by an ageing population. We to central and local government estimate that our new homes sold finances highlight the positive in 2018 generated around £7.6 impact that Bellway’s activities million10 in new local authority have on the UK and regional council tax receipts (2017 - £7 economies, demonstrating the million), helping to fund local vital role that house building services in the areas where we plays in economic prosperity develop. In 2019 these same throughout the country. households will contribute a full year’s council tax payment of around £16 million (2017 - £14.4 million).

An additional benefit comes from 10 We have calculated this by multiplying the average national council tax the New Homes Bonus (NHB) Band D value for houses in England grant that central government (Department for Communities and Local Government); Scotland (Scottish pays to English local authorities Government) and Wales (Welsh Assembly) by the number of legal to incentivise the building of new completions throughout the year. homes in their area. Based on Figures based on an assumption that each completed home paid an average the amount of extra council tax of six months council tax in 2018.

Contribution to local authority finance

£7.6m Estimated council tax

£53.7m New Homes Bonus

10 JOBS AND SKILLS

Investing in Estimates from the Labour Force estimate that between 27,000 and Survey produced by the Office 32,000 jobs were supported in the future - for National Statistics show that, 2018 as a result of our operations11. between the periods of February In addition to employment jobs and skills. to April 2018 and May to July 2018, numbers, the skill-set and level of the number of people in work skills among employees is also was 261,000 more than for a year vital, both at the individual level in earlier. In addition the terms of income, and in terms of employment rate of 75.5% was broader measures such as labour slightly higher than a year earlier mobility and productivity. There and one of the highest rates since continues to be an industry-wide comparable rates began in 1971. skills shortage in house building Bellway is a significant employer in and so we continue to focus our the UK. We directly employ over attention on training and 2,900 staff, as well as providing development within our significant indirect employment workforce. We have developed a across our network of sub- structured induction programme, contractors and suppliers. We along with a suite of training courses, which saw training days increase to 4.7 days per employee (2017 - 4.2) and the overall number of training hours increase to 69,688 (2017 - 63,101).

In total, 274 (61%) of our Site Managers now hold NVQ Level 6 (or equivalent) qualifications (2017 - 235 and 48%) and we increased the number of apprentices and graduates in our business by 54% to 142 (2017 - 92).

We are members of ‘The 5% Club’, recognising our commitment to ensuring that at least 5% of our workforce will be employed in these development roles.

We are also a major contributor to the Construction Industry Training Board (CITB) Levy and The Apprenticeship Levy, contributing £1.6 million to schemes that invest in and support the training of workers across the construction industry (2017 - £1.2 million).

11 Using data and metrics from The Economic Footprint of House Building in England and Wales (2018) by Home Builders Federation and Nathaniel Lichfield & Partners.

11 INVESTMENT IN COMMUNITY PROJECTS

Investing from It is acknowledged that while we need to build many more homes, the ground up - this activity cannot be separated from the consideration of the investment social fabric, including the provision of social infrastructure, in local and long-term sustainability. communities. As a result, our investment in local communities extends far beyond the creation of new developments.

Through section 106 agreements and the Community Infrastructure Levy payment, we provide investment in locally West Midlands. One of the UK’s determined services and biggest regeneration infrastructure, and in 2018 our programmes, the partnership is commitments totalled £79 million aimed at transforming three (2017 - £118.1 million). North Solihull wards (Kingshurst, An example of the type of project Smith’s Wood and Chelmsley we participate in is our Wood) through improved homes, involvement with the North shops, schools, transport, health Solihull Partnership in the and community facilities.

Key outputs have included:

The provision of 1,400 £52 million investment in new new homes, including 670 for and improved primary schools. registered social landlords.

Construction of a new high street, £3 million investment in retail units, offices, housing improving open spaces and and an assisted living scheme in play facilities. Smith’s Wood. £49.7 million invested in new £1.8 million investment in social village centres in Chelmund’s and economic projects. Cross and Smith’s Wood.

12 INVESTMENT IN COMMUNITY PROJECTS

The partnership has already Investment in community projects seen improved employment opportunities. Claimant rates for the North Solihull regeneration wards have fallen significantly £0.3m over the past 5 years (9.2% to Health £23.4m 5.7%) and 300 locally-based Education £7.4m jobs have been created. In Highways addition, total recorded crime Improvement has fallen by 26% and 12 Solihull & Public Transport residents have been offered apprenticeships with Bellway, with 47% of total site labour recruited from the local area.

Bellway and our employees also take a lead role in assisting non-governmental and charitable bodies that play a vital part in enhancing the quality of local life. In 2018 Bellway and our employees donated a £13.5m total of £564,040 to charities, Community community groups and local Infrastructure Levy good causes, an 8% increase on £16.9m £17.5m last year (2017 - £521,920). This Sports, Leisure, Affordable included £394,453 raised and Community housing donated to Cancer Research UK, our corporate charity partner (2017 - £385,913), of which employees, sub-contractors TOTAL Section 106 and CIL £79m and suppliers raised £198,953 (2017 - £184,793). We continue to ‘double match’ every pound raised by employees for Cancer Research UK and we ‘single match’ employee fundraising for other charitable causes.

13 SUMMARY

Building a prosperous future.

This report highlights how investment in new homes plays a substantial, valuable, and long-term role in regional and national economies.

It directly stimulates growth, direct and indirect, that arise from supports jobs, and ensures our activities. It also sets out the regional economic reasons underpinning our view competitiveness through access that house building is vital in to labour. providing sustained economic prosperity in the UK. For more The housebuilding sector also information our Annual Report generates significant economic and Accounts 2018 provides output. The Home Builders details of our business strategy and Federation (HBF) estimates that financial performance, while our new house building activity Corporate Responsibility report generated £38 billion of economic sets out in detail our CR strategy output in 2017 12. Overall we and performance. estimate that as a result of Bellway’s construction activity in Both these reports can be viewed 2018, we have contributed a total at www.bellway.co.uk/corporate of £1.2 billion in Gross Value Added 12The Economic Footprint of House Building in to the UK’s economic output England and Wales (2018) by Home Builders (2017 - £1.1 billion)13. Federation and Nathaniel Lichfield & Partners. 13This figure has been calculated for Bellway The report also provides an by Nathanial Lichfield & Partners using their ‘Evaluate Framework’ and is based on overview of the wide-ranging an estimated 11,000 direct jobs supported by and significant benefits, both Bellway in the house building industry.

£1.2bn

Estimated Gross Value Added from Bellway’s construction activity in 2018

14 10,307 27,000 - 32,000 homes sold

total jobs 34%

£1.2bn £784m sold to first £1.6bn 53% time buyers

estimated investment supply chain of legal Gross Value in land in 20% spend completions Added from 2018 £1.4bn stays on brownfield Bellway’s in the UK land construction delivered activity in as affordable 2018 homes

Bellway Homes Economic Footprint 2017-18

REMOVA L

£53.7m £56m £7.6m £216m £79m £270m

New Homes one-off spend estimated contribution investment ongoing Bonus by new council tax to public in annual spend payments home owners finance community in the local in the local projects economy economy from new Bellway households

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