Organisations across the built environment have mostly welcomed Rachel Reeves’s economic update delivered yesterday (26 March) in Parliament.
The chancellor reiterated the government’s previous commitment of £625m towards the training of up to 60,000 new workers and the creation of 10 new Technical Excellence colleges across every region in the country to help meet the 1.5 million new homes target.
However, some bodies have also raised concerns about the impact of the national insurance increase and proposed reforms to inheritance tax, which they argue could threaten small businesses.
Here’s a roundup of reactions from bodies in the sector.
Eddie Tuttle, director of policy, external affairs and research at CIOB
“We’re pleased construction is finally being recognised as a key economic driver and welcome this substantial investment.
“Having continuously called for government to develop a long-term plan to improve the pipeline of people entering the construction sector, we are encouraged by the latest plans to address the ongoing skills shortage by increasing funding for educational and workplace training through an injection of £600m over the next four years.
“However, it will take several years for the thousands of workers the government is planning to recruit to be trained to a competent standard and ready to work, so the plans are unlikely to have an immediate impact on the industry’s capacity to build the 1.5 million homes the government is committed to. The impact of the increased funding will not come to fruition until this parliamentary period is coming to an end, so while we very much welcome the plans, we question if this will enable the government to meet its ambitious housing targets.”
Ian Atkinson, partner at Womble Bond Dickinson’s construction practice
“[The chancellor’s] announcement of the £625m package for skills in construction, expected to provide up to 60,000 new skilled workers, is a potential gamechanger for the industry.
“This investment will help bridge the skills gap, ensuring we have a qualified workforce to meet the growing demand for housing and infrastructure projects. With experienced workers retiring, a longstanding diversity issue to address, major changes in construction-related legislation, and the implementation of increased technology and innovation, this funding is crucial. But it needs to come quickly so that challenges around construction skills become a thing of the past, and future talent is attracted to the industry.”
Steve Mulholland, CEO of the Construction Plant-hire Association
“[The spring statement] failed to address the challenges facing the construction sector arising from the national insurance hike and proposed reforms to inheritance tax. These changes threaten the existence of thousands of family-owned businesses in the construction sector.
“Next month’s national insurance hike will make it more difficult for family-run businesses to recruit and tackle the skills crisis, while changes to inheritance tax could force many to sell up just to cover the tax bill.”
Karl Horton, chief data officer at the 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 Office for Budget Responsibility 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 £2bn additional investment in social and affordable homes is welcome.
“Elsewhere, the already-announced £625m 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.”
Mike Robinson, chief executive of the British Safety Council
“While this wasn’t intended to be a budget in a traditional sense, we welcome the announcement that day-to-day spending across government has been protected; particularly when this comes to arm’s length bodies like the Health and Safety Executive and the Building Safety Regulator.
“The chancellor reiterated the government’s mission of national renewal, which both fuels and is fuelled by growth. This has seen significant reforms to England’s planning regime which will help to unlock growth, and is supported by £600m to train, retrain, and upskill the next generation of our construction workforce.”
Chris Ball, UK & Ireland president at AtkinsRéalis
“The spring statement confirmed the fiscal realities and tough choices facing the UK, but it also reinforces the need to forge ahead with plans that would unlock economic growth across the country.
“The additional £2bn funding for affordable homes will help to deliver on the government’s housing targets, but it could also drive immediate growth by increasing the share of funds for scalable SME housing providers who can grow capacity and invest in innovative manufacturing methods to speed up delivery of high-quality, low-carbon, affordable homes across the country.
“Recent announcements on vital infrastructure projects such as Lower Thames Crossing and airport expansion at Heathrow and Gatwick all send a positive message to industry: as we await the publication of a long-term project pipeline within the 10 Year Infrastructure Strategy, we also stand ready to contribute to the models, plans and discussions needed to realise the potential for growth and deliver value for money.”
