SPRING STATEMENT: Industry Response

Robbie Calvert, the RTPI’s Head of Policy and Public Affairs

 “Planning reforms are at the heart of the Government’s growth plan. The acknowledgement from the Office for Budget Responsibility that planning will be central to increasing the UK’s economic activity over the coming years is encouraging.

“But, while reforms are important, more could be unlocked by investing in planning itself. Our research has found that planning reform and increased housing development could miss out on over £70 billion in additional value by not investing in planning. We won’t achieve the economic growth this country desperately needs if we don’t significantly invest in the planning system.

“Beyond this forecast, there will be additional ambitions for planning services resulting from the implementation of the Affordable Housing Programme, the Planning and Infrastructure Bill and local government reform.

“Planning consents can’t do this alone, we need to ensure that the entire construction industry is geared up to deliver on this scale.”

Matt Gregory, Senior Vice President of Voice & Mobility at Infios 

“The importance of supply chain agility and resilience has been placed in sharp focus in recent months – amidst the looming threat of trading tariffs and rising price inflation. As the government works to improve fiscal performance, they once again have neglected to specifically address how they aim to improve the state of logistics in the UK. This is despite its huge effect on the strength of the economy, continuing the flow of goods and materials and helping to meet planned infrastructure projects.”

“Fortifying the logistics sector,  including pledges on infrastructure projects, requires specific investment. While £600M has been promised for construction training, there is a lack of clarity on how the government plans to support the wider supply chain – including ensuring that materials are available, and that the broader logistics sector has access to the skills it requires. The government needs to define what action it is taking to reduce the associated costs with cross-border trade – whether a reduction in red tape or other reductions in business rates.”

Karl Horton, chief data officer at BCIS (Building Cost Information Service)

“There wasn’t much in the Chancellor’s statement for the construction industry to rely on over the coming months, especially with the OBR halving its 2025 growth forecast since the Autumn Budget.

“It’s interesting that the government is now talking about getting ‘within touching distance’ of its housing target after months of the industry outlining why it was so unlikely 1.5 million new homes was possible, though the £2 billion additional investment in social and affordable homes is welcome.

“Elsewhere, the already-announced £625 million investment to train up to 60,000 skilled construction workers over the next four years is still insufficient to replenish the workforce lost since before the pandemic.

“While making the industry more attractive to new workers isn’t solely the government’s responsibility, firms have little incentive to expand their workforce and invest in training while economic uncertainty persists.

“Unfortunately, investment and funding decisions are subject to ongoing volatility, with the threat of tariffs and escalating trade tensions hanging over the UK.”

Dr Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU)

“Today’s Spring Statement was largely concerned with macroeconomic issues – the top notes of which focused on defence, welfare and public sector reform. But, at LGIU, we know that much of what was announced today will have a potentially significant impact on local authorities and the communities they serve.

The halving of the health-related part of universal credit was already known, but the fact that this reduced provision will then be frozen for the rest of the parliamentary term is news. A large number of the most vulnerable people in our communities will be impacted by these cuts – the DWP estimates up to 3.2 million families. Inevitably – it will be councils that will have to find the resources to support them and pick up the pieces, putting further strain on already stretched council budgets.

However, there were some bright spots for councils. Several areas and local authorities will receive boosts to their local economies – thanks to the large increase in defence spending. This is to be hugely welcomed for those regions. Likewise the OBR’s projection that we are on track for 1.3 million of the promised 1.5 million houses by the end of the parliamentary term is very positive news.

Housing, planning and skills are foundational for local government, so it was good to hear them feature prominently in the Chancellor’s speech. However, it was not clear how central councils actually are in the Chancellor’s plans for delivery, which is very concerning. These are policies that can only be successful if they are designed and delivered to fit local circumstances and that can only be done in partnership with local government.

From a local government perspective – the elephant in the room today was the fact that the shape of local governance is changing and changing fast with the introduction of mayoral strategic authorities and local government reorganisation. There was no indication anywhere in today’s Statement of a connection between the measures announced and the proposals – already well in train – for devolution and reorganisation.

The Chancellor left a great many questions deferred for local government – with councils left waiting for the answers.”

Alex Till, Chairman of National Enterprise Network

“The Chancellor has effectively abandoned start-ups and small businesses in this Spring Statement. Enterprise Agencies across the country have become vital hubs for new businesses seeking support, advice and funding assistance. However, over the past year, funding for these agencies has virtually disappeared or has been reduced, with no indication from the Chancellor about future support. As a result, Enterprise Agencies are being forced to reduce operations, severely impacting the support available for new businesses. Combined with the upcoming increase in employee National Insurance, living and minimum wage and the new employment rights bill, this all represents a significant blow to the small business community,”

Andrew Orriss, CEO at STA (Structural Timber Association)

“Today’s announcements follow a positive start to the year for structural timber with February’s ministerial approval of DEFRA’s Timber in Construction Roadmap (TiC), highlighting a strategic commitment to leverage timber as a key material in our built environment.  Additionally, the Government’s recently introduced Plan for Change, recognises the pivotal role of sustainable construction in driving economic growth and addressing climate challenges.

“There can be no doubt that increasing the use of structural timber and offsite manufacturing is one of the most effective ways of ensuring the rapid and high-quality delivery of these vitally needed homes, while also meeting urgent decarbonisation obligations.

“The Structural Timber Association remains dedicated to working collaboratively with government, industry partners, and stakeholders to drive a transformative approach to construction that meets our economic, social, and environmental objectives.”

Brian McArdle, Managing Director Gleeds UK

“The Chancellor’s first budget raised taxes by £41.5bn and, while we did not expect this second to reverse them, what she did need to do was restore confidence to those operating in the built environment who currently feel dispirited, unsure and under-confident. The news of £600m worth of investment to train up to 60,000 additional skilled construction workers as well as a Local Skills Improvement Plan (LSIP) which will benefit from £20m is to be welcomed, but there was nothing in today’s statement to buttress investor confidence. It’s certainly not jam today it is jam tomorrow and any jam available seems to be being spread over an ever-widening piece of toast. This was not a statement that will empower investors. It was a fingers-crossed approach from a Chancellor being driven by the markets, rather than the other way round.”

Viki Bell, Director of Operations at the Construction Equipment Association (CEA)

“Labour’s ambition to fix the planning system and unlock housebuilding is positive in principle – and the OBR’s suggestion that reforms could take us to a forty-year high in delivery is encouraging. However, much of what was discussed today has already been announced, and there was very little new information for the construction equipment sector.

The commitment to build 1.3 million homes and bring the target within ‘touching distance’ of 1.5 million is ambitious, and we continue to monitor this pledge. The £600 million to train 60,000 construction workers and set up ten technical excellence colleges is a step in the right direction, and we will work to ensure this is delivered and aligned with industry needs.

Our members need practical support – clear timelines, a stable pipeline of work, and a commitment to UK manufacturing. Construction Equipment is key to these deliverables, as is the battle against equipment theft, which is a clear strategic threat to these ambitious growth plans.

The good news was no further tax rises – but the sting for businesses came earlier this year, with increased national insurance. The real test will be the autumn budget.

Tim Balcon, CEO at the Construction Industry Training Board (CITB)

“Despite navigating an uncertain world, the Chancellor’s Spring Statement this week has been accompanied by two significant announcements for the construction industry. Firstly, the £600 million package for construction skills to catalyse the Government’s homebuilding target. Second, the £2 billion investment into affordable homes to accelerate delivery

“As part of the construction skills package, CITB is providing £32 million to support the Government’s aim to fund over 40,000 industry placements each year. Additionally, we’ll be doubling the size of our New Entrant Support Team that helps make finding, recruiting and retaining an apprentice or new entrant easier for employers.

“The Government’s continued support for the construction industry through increased investment in construction skills is extremely welcome. As an industry, we need to collectively grasp this opportunity and be better at shouting about what a fantastic industry this is, the prospects it can offer people, and attracting people into pursuing a career in construction. I genuinely believe this is a once-in-a-generation chance to us to recruit and train our workforce – equipping more people with the skills they urgently need now and in the future.

“The Government aims to build 1.5 million new homes and approve 150 major infrastructure projects by the end of the decade – indeed, plans for Lower Thames Crossing were approved earlier this week. The opportunities aren’t just on the horizon, they’re in the here and now.”

Timothy Douglas, Head of Policy and Campaigns for Propertymark

“The Spring Statement had a clear focus on the vital role housing plays in the UK economy and as part of the UK Government’s plan for growth, so it is encouraging to hear that planning reforms will boost national income. However, workforce challenges remain and it’s vital that local councils have the resources required to deliver effective planning and infrastructure so communities up and down the country and the wider economy really benefit.”

Allan Wilen, Glenigan’s Economic Director

“The Spring Statement is hardly a game-changer for construction, but no news is good news. Developers have been waiting on the sidelines, and if confidence returns, we could see a surge in project starts. Glenigan data shows that £129 billion worth of projects have secured planning approval over the past year, and many of these schemes could now break ground.”

Iain Halls, Partner at Ceres Property, commented:

“Our new Labour Government was quick to put its stake in the ground with respect to new housing delivery, setting what many saw as an overly ambitious target of 1.5m new homes by 2030.

Despite widespread scepticism over the ability to meet such targets, it’s clear that the fresh slate of a new government had a positive impact on the construction sector, with a notable uplift in construction output for both new public and private housing materialising in the months that followed.

However, it certainly seems as though Labour’s first budget since 2010 has derailed the positive momentum building across the construction sector, with output levels falling in the months since.

Whilst it could be argued that there’s a seasonal element at play here in the run up to Christmas, the budget itself was considered a largely negative one for the construction industry and its impact is likely to be felt long beyond the closing months of 2024.

The general consensus is that despite some announcements on infrastructure investment, Labour simply didn’t go far enough in addressing the more prominent issues such as rising material costs and supply chain issues. At the same time, Labour’s hike to National Insurance Contributions has been a bitter pill to swallow, reducing the appetite for recruitment and further straining the labour shortage.

Of course, there are additional factors impacting construction output that have been at play for far longer than those announced via the Autumn Budget. Perhaps the most significant is the bottleneck being caused by the building regulations implemented since the Grenfell tragedy. Whilst wholly necessary, we’ve seen delays with respect to remediations on existing developments and, in turn, this has caused a log jam for any new developments over seven stories in the last two years.

If Labour is to meet its target of 1.5m new homes over the next five years, it certainly needs to do more to stimulate the industry that will help them to achieve it and investing in more skilled construction workers is, at least, a step in the right direction.”