UK construction reacts to Chancellor’s Spring Statement
This post was originally published on this site
While the UK construction sector continues to digest Chancellor Rachel Reeves’ Spring Statement, here we gauge the initial reaction of some of the leading figures within the industry.
Stephanie Cox, Director at E3P, a multidisciplinary environmental consultancy:
“The Chancellor has suggested today that the planning reforms will add £6.8bn to the economy, and put the Government ‘within touching distance’ of the ambitious housebuilding target of 1.5m homes. Once again, the budget cites grey-belt land as a solution to the house crisis, but its complexities have been overlooked.
“Building on this land is costly and difficult. It was already a risk for developers to consider remediating this land. After today’s spending cuts, developers – particularly those focused on owner-occupied schemes – will be even more cautious than before. However, with a clear direction from the Government on the challenges and opportunities involved with grey-belt land, developers could have greater confidence in delivering the housing the UK needs.”
Conor Leyden, CEO of the LK Group, a geo-environmental consultancy and contractor:
“The construction industry welcomes the announcement that £600m has been pledged to train 60,000 new workers. However, it’s disappointing to see that Reeves has not offered incentives for businesses that are working tirelessly to tackle the ongoing skills shortage.
“It’s no secret the talent vacuum is worsening, while outputs are dropping and this statement a missed opportunity from the Government to support those who will be training these new workers. It’s the businesses who provide apprenticeships and traineeships, who will ultimately drive more young people into the sector.
“SMEs are already dealing with the ramifications of national insurance hikes and increased interest rates and, for many, offering on-the-job training is getting harder. Without access to skilled workers, the industry will not be able to deliver the Government’s ambitious housebuilding targets.”
Kelly Boorman, partner and Head of Construction at RSM UK:
“Today’s announcement signals that the government is continuing to prioritise housebuilding as a lever for long-term economic growth, with renewed focus on addressing the construction industry’s labour shortage. We know the industry sees Skills England as helpful in addressing workforce shortages*, yet less than a third think the government will achieve its target of building 1.5m homes during its five-year term in parliament, with workforce shortages cited as a key barrier.
“Although commitment to training 60,000 construction workers is a step in the right direction, there remains a massive gap to fill given the industry is reliant on manual workers and has an aging workforce. With planning reforms expected to accelerate housebuilding and increase GDP by 0.4% in the next 10 years, it’s essential training and upskilling begins now to tackle the labour shortage.
“In addition, the transition towards modern methods of construction over the next few decades will mean greater focus on technology to innovate and build more efficiently. The role of new technologies therefore needs to be embedded in training, while also incentivising construction businesses to invest in technology to ensure housing targets are realised and boost economic growth.”
Karl Horton, Chief Data Officer at BCIS:
“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 1.5m 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.”
Paul Wakefield, planning partner at law firm, Shakespeare Martineau:
“While not divulging any new details on the UK’s planning system, today’s Spring Forecast has shown glimmers of hope that the changes already underway are having a positive effect.
“With the revised NPPF now in effect for three months, the Chancellor revealed that the OBR predicted a forty-year high on housebuilding along with an additional 1.3m homes over the next five years. These estimates have set a clearer scene for what the planning system can expect, providing the reassurance that housebuilders have been desperately seeking to accompany announced reforms.
“Not only affirming a nation impacted by a housing crisis, the Forecast will also likely raise spirits within the government who will presumably continue on their path of streamlining the planning system. The OBR’s vote of confidence is likely to be seen as a green light for the government to press ahead, or even go further and faster than they have done so far.”
Terry Woodley, Managing Director of Development Finance at Shawbrook:
“Despite challenges across the industry there could be a renewed sense of optimism among the development sector following the news that the OBR believes recent planning reforms will lead to housebuilding reaching a 40 year high. Shawbrook’s own research revealed that 59% of developers we asked were already confident that 1.5m new homes could be delivered in five years.
“Key facets of the Planning and Infrastructure bill, which passed its second reading this week, like planning committees, development corporations and strategic planning elements should reduce red tape and streamline processes, which will play a crucial role in delivering the ambitious new homes target. This, combined with the commitment to fill skills shortages by increasing training and jobs within the construction industry should give developers further confidence and the clarity needed to pursue plans.”
Rebecca Wilkinson, Partner and Property & Construction sector specialist at Menzies LLP, a leading UK business advisory and accountancy firm:
“The Spring Statement was mainly a recap on measures the Government has already taken to try to boost the economy and contained very little new content.
“For the Construction sector there were two main points of focus: planning reform and increasing the supply of skilled construction workers.
“Reforms of the National Planning Policy Framework (NPPF) were announced in December 2024 with the aim of increasing housebuilding in England. If successful the reforms will increase annual housebuilding by around 30% by 2029-30, which the OBR estimates will add £6.8bn to the economy.
“The Government has realised that boosting skills in the construction sector is key to delivering the planned number of new homes and to delivering infrastructure projects. It has therefore committed to investing £625m in England over four years to deliver up to 60,000 additional skilled construction workers. This funding will be used to support construction-focussed skills bootcamps, fund new construction Foundation Apprenticeships and to deliver more construction courses. The funds will also be used to establish ten new Technical Excellence Colleges specialised in construction in every region in England.
“The measures sound positive but it will take time before they have a positive impact. In the meantime, the Government has done nothing to address soaring construction costs and the increasing number of construction sector insolvencies.”
McPhillips Managing Director, Paul Inions
“Having ruled out tax rises ahead of today’s statement, the Chancellor left herself with little option but to cut public spending if she wanted to stay within her own fiscal rules.
“There is only one way out of her current predicament and that is to do everything she can to help the private sector start to grow. Unfortunately, the rise in employer’s National Insurance contributions which comes into effect next month and changes to employment laws do nothing to help.
“However, the extra £600m of funding to train tens of thousands more skilled construction workers over the next four years is certainly welcomed. If it can deliver on the Chancellor’s promise to train up to 60,000 engineers, bricklayers, electricians and carpenters by 2029 then it will be a big step forward.
“McPhillips runs its own training centre and we know that investment in skills at entry level pays huge dividends further down the line.
“We certainly need this sort of national investment if we are to speed up work on the UK’s infrastructure and build the 1.5m homes the Government has promised in the next five years.”
Ben Standing, Partner specialising in planning at UK and Ireland law firm Browne Jacobson:
“Putting the planning system front and centre of its economic growth mission is a wise call by the government, which is taking a refreshingly bold and speedy approach to clearing the road for future developments.
“But Westminster should be aware that none of these changes will offer a quick fix and reorganising the system at large isn’t going to solve the issues it wants to tackle on their own given there are other structural challenges, in particular around skills needs.
“A £600m fund to train up to 60,000 more construction workers across ten new technical excellence colleges indicates recognition from the government about this. However, extra money must be complemented by a dedicated skills strategy that addresses the sticky issue of how to encourage young people to take up construction careers.
“Similarly, while legislative changes should make the planning system work smoother, we’re yet to hear from government how it intends to bring communities along this journey.
“At the moment, the discourse is around which areas carry the ‘burden’ of new housing but this points to a broader reputational challenge for development, which is in desperate need of a makeover to be regarded more positively by the public.
“To turn this perception around, there must be a concerted effort by central and local government, in partnership with the construction industry, to meaningfully engage communities hosting new public infrastructure – whether this is housing developments, renewable energy schemes or transport projects – and identify how local people can benefit.”
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.”
The Royal Institution of Chartered Surveyors (RICS) CEO, Justin Young:
“We are glad the Chancellor has announced a number of measures RICS have been advocating for to support housebuilding, skills development and businesses.
“The announcement by the government of an additional £2bn investment to build 18,000 new social homes is an enormous boost for the sector. Alongside ongoing reforms to planning, this should provide increased confidence for housebuilders across the country. According to RICS data, the gap between housing demand and supply continues to widen, so these new social homes will prove vital for supporting new supply and crucially housing the most vulnerable.
“The £600m of additional funding for construction sector skills is a decisive investment in the UK’s built environment. This should help secure the next generation of construction sector workers and professionals as we look to tackle the challenge of an aging workforce alongside acute labour and skills shortages. If this can be combined with a new GCSE for the Built Environment in England, we can drive fresh talent to take up the new opportunities afforded by this investment.
“We are pleased the government will publish plans for much needed business rates reform later this year – hopefully creating a fairer system for businesses as they face increasing financial pressure.
“Given that the country currently faces deep economic challenges, these measures are certainly positive news for the built environment. While this isn’t everything on our list of asks, this is certainly a step forward. We look forward to its and continuing our conversation with the government as it seeks to transform the built environment.”
Roger Morton, Director of Business Change, NHBC:
“We welcome the Government’s bold commitment to ‘Get Britain Building Again’ through a £625m investment in construction and house building skills. Crucially however, this is not just about creating opportunities for young people. The construction and house building industry offers excellent, long-term career opportunities for everyone, regardless of age or background.
“It is vital this investment recognises the diverse talent the industry will need to thrive. From school leavers to career changers and those returning to work. House building is not a one-size-fits-all sector. It is a dynamic industry that depends on a strong, skilled and inclusive workforce.
“The Government’s investment is a pivotal moment. With Government, industry and training providers aligned, we have a unique opportunity to deliver a more productive and sustainable sector that genuinely offers opportunity for all.
“This is why NHBC is committing £100m to our own national training programme. This will include 12 new multi-skill training hubs across the UK. These hubs will provide immersive, on-site learning from day one and deliver high quality apprenticeships in key trades such as bricklaying, groundwork and site carpentry. We are equipping the next generation and those re-entering the workforce with the confidence and skills to raise standards, build a stronger industry and quality homes for the future.
“In addition, support the announcement of a further £2bn investment in social and affordable housing. The demand for affordable homes is significant and it is encouraging to see targeted funding being allocated to meet this need. It will help to provide much needed security and stability for thousands of families across the country.
“As more people come into the house-building industry, NHBC will continue playing its key role in ensuring homes are built to the highest quality. This a responsibility that is even more critical during periods of growth. Our commitment to setting the highest industry standards in house building and prioritising quality will ensure long-term benefits for the industry, for local communities and homeowners.”
Matt Russell, CEO at Zest:
“The Chancellor’s statement cements the construction sector’s position as one of the UK’s high-growth industries. Despite economic uncertainty impacting many sectors, housebuilding firms are one of the few that haven’t seen an impact on hiring and have been the biggest investors in their employees, driving economic growth across the UK.”
Andrew Baldwin, Head of Policy and Public Affairs at the Association for Project Management (APM):
“The Government clearly understands the world has changed and is adjusting spending priorities accordingly. The world’s increasingly volatile, uncertain, complex and ambiguous nature is something that has long been recognised by project professionals.
“We welcome the Government’s approach to digital transformation and the progress that can be made here. Digital change must modernise legacy systems but also include strategic leadership and governance as part of the transformation. That will take time and money.
“We are also encouraged by the investment in major projects announced today. The project profession already adds £186.8bn of value to the UK economy each year, as well as social benefits beyond measure. We therefore want to see even greater commitment to project delivery: investment in major projects must include investment in Government departments. They must be able to attract and retain the best talent, and to train people and give them the tools to succeed. To do that, the Government must also invest in digital literacy and cross-department inter-operability systems, and refrain from arbitrary cuts to departments.
“At a time when the Government is investing heavily in major projects, creating the new National Infrastructure and Service Transformation Authority (NISTA) and thinking about a legacy, the capacity to deliver these projects must be strengthened.”
Lee Parkinson, Chief Executive at Efficiency North:
“We find ourselves at yet another crossroads in construction, where, even with the highly-encouraging announcements, we must remain grounded. This long-awaited backing for a new skills mission is a step forward but we can’t overlook the fact that the industry does require an additional 50,000 workers each year just to meet existing demand.
“There certainly seems to be some mobilisation across the sector, but the key now is ensuring there’s a comprehensive and collaborative effort to fully embrace and capitalise on this investment.
“With apprenticeships being one of the biggest drivers of social value generation within construction, there’s a real opportunity for clients to serve the workforce of tomorrow and drive the creation of real, project-initiated, and future-proofed apprenticeships.
“Equally, this presents an opportunity to ensure apprenticeships are not only compliant with the evolving regulatory landscape but tailored to meet these new norms. This calls for an effectual approach to procurement and on-going contract management to ensure that the delivery and completion of apprenticeships become a direct and measurable outcome of their capital investment.
“In doing so, employers can not only achieve their own ambitions but also help replenish the nation’s workforce, which has become increasingly depleted over the years. And with what we can see as the growing enthusiasm among younger generations to join our industry, now is the time to pave the way for a thriving, sustainable future in construction, securing long-term career development.”
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 £600m package for construction skills to catalyse the Government’s homebuilding target. Second, the £2bn investment into affordable homes to accelerate delivery.
“As part of the construction skills package, CITB is providing £32m 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 1.5m 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.”
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 £129bn worth of projects have secured planning approval over the past year, and many of these schemes could now break ground.”
Roger Mortlock, Chief Executive of CPRE, the Countryside Charity:
“Addressing the housing crisis is about so much more than powering growth. It’s about building the homes people need in the right place. We heard too little from the Chancellor today about affordable homes, homes for social rent or the 1.2m homes that could be built on brownfield sites in England alone.
“The Chancellor has misplaced confidence that the ‘grey belt’ will solve the housing crisis. It will only deliver car-dependent, identikit estates of unaffordable homes across our countryside and undermine the Green Belt, which Labour itself invented. “With the OBR predicting that house prices will continue to rise, the UK’s housing affordability crisis shows no sign of abating. People in rural areas are often worst hit, thanks to higher house prices and lower average incomes.
“The Chancellor appears to have no plan to hold the housebuilding industry to account and ensure it actually delivers the homes the government is promising. We know the big housebuilders control supply to maximise profit. They have a role to play, but unchecked, it’s like putting the fox in charge of the hen house.”
Alex Vaughan, Costain CEO:
“Following the Chancellor’s Spring Statement, all eyes will now be on June’s Spending Review and the desperately needed 10-Year Infrastructure Strategy. “The successful delivery of complex, transformative infrastructure requires long-term planning and clear decision-making, and a 10-Year Infrastructure Strategy, overseen by a dedicated Cabinet Minister, is vital to provide a more structured and consistent approach. We look forward to seeing more details in the months ahead.”
Sarah Edwards, MP for Tamworth and Chair of the All Party Parliamentary Group (APPG) for SME Housebuilders:
“This substantial investment in construction training is a pivotal development for SME housebuilders across the UK. By equipping a new generation of skilled workers, we can enhance the capacity of SMEs to contribute meaningfully to the nation’s housing goals. The APPG is committed to collaborating with the Government to ensure that this initiative effectively supports SMEs, enabling them to thrive and deliver the much-needed homes our communities require.”
Edwin de Silva, of STARK UK and a key industry voice:
“This Bill marks a step in the right direction for SME housebuilders. We are pleased to see that many of our concerns, particularly around planning delays and access to land, have been acknowledged. However, the real test will be in the implementation. It is crucial that these measures genuinely level the playing field and remove barriers that have long hindered the growth of SME developers.”
The post UK construction reacts to Chancellor’s Spring Statement appeared first on Construction Industry News.
Responses