The chancellor yesterday (26 November) set out her spending plans in the autumn budget.
For the construction industry, it was a mixed bag of partial wins and major gaps – although Rachel Reeves emphasised the importance of infrastructure projects for the country’s economy, the scale of the funding is seen by many as insufficient.
Cost pressures remain high for the sector, with rising taxes, fuel duty changes and delayed energy costs relief flagged as threats to profitability and investment. Others have warned about weakening sustainability commitments.
Below are the reactions of some of the main bodies and organisations across the industry.
Desiree Blamey, managing director at Considerate Constructors Scheme
The budget committed £8.3bn for major infrastructure projects and £1.2bn for brownfield development, but underfunding risks slowing progress on safe, sustainable development, something CCS is committed to driving.
Speeding up planning approvals is welcome, but speed must never compromise quality. We need reforms that deliver responsible construction, prioritising safety, sustainability and community benefit.
Brian Berry, chief executive of the Federation of Master Builders
The announcement on landfill tax reform is a big win for small housebuilders, saving them thousands on new-build costs.
The £48m investment to boost planning capacity is a further positive step. Local planning departments are under immense strain, and this funding will help unlock stalled housing projects, but this seems a small sum of money to fix a very big problem.
A well-resourced planning system is essential if we are to meet housing targets, and SMEs must be at the heart of delivery. Supporting small builders to get spades in the ground will ensure Britain gets the high-quality homes communities need.
Richard Beresford, chief executive of the National Federation of Builders
Construction feared the worst from the budget, particularly on landfill tax. While we were heard on this proposal, lower rate landfill tax will still more than double. Furthermore, businesses that employ directly, take on apprentices, or choose to decarbonise their vehicle fleets, will be throwing their arms up in frustration.
There was nothing on stamp duty land tax rebates for the most efficient homes, no cancelling of the Building Safety Levy and not a murmur on Help to Buy, all of which means industry will remain in the mud.
Death by a thousand taxes has already killed off many businesses, with insolvency rates still high within the construction industry. The government must therefore redouble its effort to make projects more certain for investors, while helping the construction businesses that deliver them become more viable.
Dr David Crosthwaite, chief economist at the Building Cost Information Service
There’s little in this budget for the construction sector. Plus points include £900m additional capital for the Lower Thames Crossing scheme, free training for under-25 apprentices for SMEs, and steadfastness on spending review investments in infrastructure and housing.
Yet the chancellor’s celebration of the government’s planning overhaul to “get Britain building” seemed misplaced. Construction output and housebuilding data tell another story – one of slow demand and a shrinking workforce.
Increasing the cost of doing business is likely to be inflationary. Higher costs will inevitably be passed on, placing further upward pressure on tender prices and reducing firms’ ability to hire.
This could pile on more friction at a time when construction activity is already fragile. For construction, already faced with chronic labour gaps and rocky investor confidence, this budget might create more issues than it solves.
James Corrigan, UK managing director for infrastructure at Turner & Townsend
It was welcome to see funding confirmed for Lower Thames Crossing and certainty on Heathrow’s expansion earlier in the week.
NISTA’s (National Infrastructure and Service Transformation Authority) pipeline and yesterday’s announcements are positive steps in providing the industry with visibility and clarity on priorities and public resources. But with high demands on infrastructure over the coming decade, we need the government to work with our industry to drive more private investment into the sector, plug the funding gap and deliver on Labour’s growth agenda.
With the budget firmly in place, it is up to our industry to have the confidence to create meaningful growth through coordinated delivery of resources, strategy and appropriate investment models.
Justin Young, RICS chief executive
It is encouraging that the government is prioritising necessary reforms to the business rates system, and we are committed to supporting this effort through our members’ expertise.
Whilst these changes are welcome, there are several measures which may weaken the housing market, such as raising tax on dividends, property and savings income by 2%.
Furthermore, it seems that commitments to sustainability are weakening. RICS is working with the government to mitigate these effects and help it deliver its objectives.
Viki Bell, chief executive of the Construction Equipment Association
The construction equipment sector was barely referenced in the chancellor’s speech, despite its central role in supporting growth, infrastructure delivery and UK manufacturing.
Rising costs remain a major concern. Freezing fuel duty offers some relief, but the new mileage charges for hybrid and electric vehicles will add costs elsewhere in the supply chain.
We are also concerned that support to cut electricity prices for manufacturing will not begin until 2027. Energy costs are impacting UK manufacturers now, and delaying action risks weakening competitiveness and discouraging investment in new equipment.
