Construction still front and centre despite limited Spring Statement announcements
This week, chancellor Rachel Reeves delivered the government’s annual Spring Statement amid a typical blend of excitement and trepidation. As well as updates in line with already-announced government plans, there were changes in funding for several sectors – with some receiving additional support and others being the victim of cuts.
One of our immediate observations was the lack of specific focus on the construction sector, which has been a key economic driver for the government since its general election victory. However, looking beyond the headlines, construction remains a priority – and announcements of recent weeks remind us that the Spring Statement shouldn’t be viewed in isolation.
Our development director Jonathan Parker said: “You could hear the Spring Statement and think construction has been overlooked, but the reality is that the start of 2025 has been full of funding and policy announcements for the sector.
“The start of the year has seen procurement reform come into force, and the Planning and Infrastructure Bill published – currently making its way through the House of Lords. The past two weeks has seen £2bn of investment announced for new social homes, and £600m for construction skills and training.
“There’s a clear direction of travel set by the government, aligned with the planning reforms brought into play last year. There is also a commitment to delivering on housing promises especially – backed by recognition that skilled professionals and talent attraction are vital to delivery.”
So, looking beyond the Spring Statement, is the government doing enough to support the construction sector with overcoming its major challenges and achieving its ambitious targets?
Jonathan continued: “Combined with seeing inflation fall slightly in February, there’s a lot to be positive about – but there is some hesitance too. We must stay grounded and work towards all barriers to delivery being removed, not just some, and big questions remain around whether we have enough planning professionals – or skilled people across the sector at large.
“Resource and viability remain large challenges, especially as many councils remain strapped for cash and need to ensure every penny stretches as far as possible. So, how will funding specifically support this, and is there a need for JVs between the public and private sector to deliver what the government needs?
“The appetite is there and there is clear ambition to reach what Labour states would be a 40-year high in housebuilding, but without the vehicles to move development forward the vision cannot be delivered. Whether it’s creating development partnerships between the public and private sectors or drastically increasing the planning and procurement capacity in councils, it’s going to take a combined effort to realise future visions.”
The government has adopted a complex and turbulent construction sector, making the challenge of sustainable growth particularly difficult. For our director of national delivery, Karen Carter, the priority should be identifying opportunities where we can solve historic challenges and make immediate progress on new targets simultaneously.
Karen said: “Using the £600m skills funding announced recently as an example, this covers upskilling and the development of new technical colleges but is this coming too late and just another piece of paper to cover the cracks? Realistically, it will take several years to see any impact and there is no guarantee we will be in a stronger position than we are now – unless the funding is used strategically and the necessary outcomes are achieved.
“As a sector, we need to leverage today’s projects to contribute to our futureproofing efforts and development of tomorrow’s skills. Social value-led procurement that incorporates clear specifications can go some way towards that.
“If we can meet the government’s ambitious targets for construction, the future looks bright and we will all benefit – from housebuilders to niche product manufacturers and beyond. We think the sector is still front and centre in the government’s national plans for growth, so let’s keep them there and ensure we justify continued attention.”
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