The construction industry cautiously welcomed Labour chancellor John Healey’s first budget, which offered support for housing, devolution and skills.
Healey also announced a pause on new building regulation changes for the rest of parliament “except continued building safety improvements” and said the government would create a UK data centre covenant which would ensure schemes invest in local communities, create local jobs and protect local water supplies.
However, the government has paused the Commercial Payments Bill, which was due to come into force next year.
Trowers & Hamlins construction partner Katie Saunders said the bill would have had “a significant impact on improving cashflow for SME construction companies and protecting the vulnerable supply chains which support the sector”.
CM has compiled the key announcements and industry responses.
Housing/devolution
Key announcements:
- Introduction of the Your First Home equity loan scheme;
- Additional £1.5bn of funding to the Social and Affordable Homes Programme (SAHP);
- The removal of biodiversity net gain requirements for brownfield sites of 1.5 hectares in England;
- A fiscal devolution roadmap to overhaul the funding model for regional and local government in England.
Chartered Institute of Building (CIOB) head of policy and public affairs David Barnes said:
“The confirmation of funding for the new Your First Home and First Time Buyer ISA scheme should stimulate demand for new homes.
“However, demand side intervention must not be hampered by unresolved supply side constraints – resolving planning and infrastructure challenges will be key. Otherwise, there is a risk that greater purchasing power simply meets the same restricted supply.”
Andrew Reynolds, Rider Levett Bucknall (RLB) chief executive of UK and Europe, said:
“The confirmation of the Good Growth Funds for regional mayors and incubator funds for those regions without mayors is welcomed. Devolved powers and the relevant funding must also be accompanied by the commercial, procurement and programme delivery capability needed to turn funding into successful projects and ‘good growth in every postcode’.”
Mott MacDonald managing director for buildings in UK and Europe, Mark Ewen, said:
“The government’s commitment to the devolution agenda in the budget is a significant step towards unlocking growth, enabling regional authorities to take a more strategic, long-term approach to investment.
“Local leaders need the certainty and capacity to build credible investment pipelines and bring forward projects that reflect the priorities of their places. The real opportunity is to connect decisions around infrastructure, housing and regeneration rather than treating them in isolation, turning greater local control into meaningful, lasting change.”
Skills
Key announcements:
- Investment of £100m in local apprenticeship services as part of the government jobs guarantee pledge;
- A target of at least 3% of workforce on large government construction and infrastructure projects to be apprentices;
- £15m funding for Leeds College of Building to boost construction training.
CITB chief executive Tim Balcon said:
“The sector needs 41,000 additional workers every year. Clear regional work pipelines will give employers the confidence to invest. Devolution must help employers build a highly skilled workforce and enable people to thrive throughout their careers.”
David Barnes, head of policy and public affairs at the Chartered Institute of Building (CIOB), said:
“We welcome the £15m funding announced for the Leeds College of Building as an investment in construction training and the skilled workforce the country needs. However, this must form part of a sustained commitment to construction education nationwide.”
Eoghan O’Lionaird, chief executive of Wates Group, said:
“The rising number of young people out of work and education is a challenge that could define a generation… At Wates, creating opportunities for young people is already an important part of what we do, from work experience through to apprenticeships and graduate hiring, and we are ready to build on that in support of the government’s ambitions.”
Digital/IT
Key announcement:
- A British data centre covenant with strict tests that data centres must meet to invest in local communities, create local jobs and protect local water supplies. In return, critical data centres will get the grid connections they need, and where necessary, be allowed to build onsite generation while they wait.
Drees & Sommer UK managing director Ken Wood said:
“Clarity on data centre development is appreciated. It is no secret this has been a growing area of investment, but uncertainty around planning has left many developers and suppliers with question marks over when they can expect spades in the ground.”
