The Scottish Building Federation has welcomed plans to target additional funding towards shovel-ready construction projects.

The plans were unveiled at Westminster as part of Chancellor George Osborne's Budget for 2013.

However, the Scottish Building Federation has also criticised the Chancellor's refusal to introduce a targeted cut in VAT on building repair and maintenance works to stimulate smaller scale building activity.

Speaking about the Budget, Scottish Building Federation Executive Director Michael Levack said: "The commitment to prioritise an additional £300 million towards capital investment in Scotland is welcome. But considering that Scottish construction output fell by more than £1.1 billion last year alone, it is clear that more could and should be done to support the industry.

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"Aside from additional capital investment, we have consistently called for a targeted cut in VAT on building repairs, maintenance and improvements to give particularly smaller construction firms a much-needed boost."

Mr Levack added: "While pontificating about the need to tackle tax avoidance, the Chancellor has ignored the plight of legitimate building companies that struggle to compete against the 'cash-in-hand' cowboys that are the parasites of our industry. What is more, he has missed a golden opportunity to stimulate investment in initiatives to make our built environment greener and more energy efficient.

"Overall, the Chancellor seems determined to stick to the existing economic course. In reality, Plan A is doing too little to support the construction sector as a means of stimulating growth in the wider economy. As a result, I fear we will continue to bump along the bottom for some time to come."

(JP)