Three months into a new administration, what has the government achieved since it took office and what does the construction industry hope and expect ahead of the Autumn budget on 30 October?
On 4 July, Labour won a landslide victory in the UK General Election, ending the unbroken 14-year conservative administration, and with it bringing its vision for “change”.
At the heart of prime minister Keir Starmer’s vision for change was the plan to ‘rebuild Britain’ after years of stagnation in planning and infrastructure.
At the time this naturally pricked the ears of many in construction with industry leaders including Balfour Beatty CEO Leo Quinn and industry bodies like the The Chartered Institute of Building (CIOB) welcoming the new government and its plan to drive growth.
It has now been three months into Keir Starmer’s premiership, and less than a month away is Labour’s first budget which will outline the government’s revenues and expenditure for the next fiscal year.
How has Labour performed since they took office and what does it mean for construction? What should we expect to see from the autumn budget? And what does the industry want to see on 30 October?
The first three months
The first insight into the new government’s plans going forward was the King’s Speech, where King Charles outlined the direction of travel for Labour’s first 12 months in office.
In it, the King unveiled 40 policy bills and draft bills, with planning reform playing a vital role in accelerating the delivery of high-quality infrastructure and housing
In their election manifesto, Labour pledged to build 1.5 million homes over the next five years.
Chancellor Rachel Reeves, as well as putting an end to the ban on inshore wind, outlined how Labour will reach its 1.5 million goal.
Reeves announced revisions for the national planning policy framework which would see reviews for green belt boundaries and prioritisation of brownfield and grey belt land for housing development to meet housing targets.
In August, deputy prime minister Angela Rayner announced new mandatory house building targets under Labour would rise to 370,000 a year from 300,000.
Then by the end of the month Rayner launched a new “Homes Accelerator” to speed up the delivery of 200 stalled housing sites which could deliver up to 300,000 new homes.
Industry bodies like the Home Builders Federation welcomed these housing proposals, having previously criticised the current state of the planning system.
David O’Leary, executive director of the HBF, said at the time: “The planning process and everything associated with it delivers too little land and has long been a significant constraint on house building.
“Government has shown a welcome desire in the weeks since the election to address the problems.”
To address the chronic skills and labour gap in construction, the government also launched Skills England, a new government organisation to address the ‘broken and fragmented’ skills and training system.
David Barnes, head of policy and public affairs at the Chartered Institute of Building (CIOB), said: “Skills England has been created to bring together key partners and institutions to meet the skills needs of the next decade, but further detail on the funding model and its influence on policy decisions will be hugely important to ensure it is efficient and effective.”
In September, seven years on from one of the worst tragedies in British history, findings of a public inquiry into the Grenfell disaster was published, bringing with it harsh lessons for the construction industry.
One of the key recommendations from the final Grenfell report was the establishment of a “construction regulator”, to drive “much-needed change in the culture of the construction industry”.
It also recommended the appointment of a Chief Construction Adviser to the lone Secretary of State on “all matters affecting the construction industry” – and called for the urgent review of the definition of a higher-risk building for the purposes of the Building Safety Act.
The Autumn Budget – what to expect
This week, The Guardian reported Rachel Reeves had until Wednesday to decide whether to change the government’s fiscal rules to potentially unlock up to £57 billion in additional spending on infrastructure at this month’s budget.
The Office for Budget Responsibility (OBR) will calculate the impact of the changes and produce its forecasts for the Budget.
Influential think-tank, Institute for Public Policy Research (IPPR), has urged the chancellor to introduce a ‘public sector net worth’ target at the Budget in order to measure the total value of public assets.
This would, in the think-tank’s view, allow further borrowing to invest without breaking Labour’s manifesto commitment to balance day-to-day spending and fill the £22 billion ‘blackhole’ inherited from the previous government.
What are the industry’s expectations?
Construction industry bodies shared their own hopes and expectations for the budget and how the government can shape the next fiscal policy to support the sector while improving the build environment.
Director of operations for the Civil Engineering Contractors Association (CECA) Marie-Claude Hemming said: “The UK economy has suffered for too long from underinvestment in infrastructure, and consequently has displayed anaemic economic growth for years – to the detriment of our businesses and communities.
“Our industry stands ready to deliver on increased investment in infrastructure, which recent research has shown will need to total a whopping £1.6 trillion by 2040.
“As the Chancellor prepares to deliver her first Budget, it is vital that the Government is laser-focussed on delivering sustainable growth, and a small change to the fiscal rules – one that reflects the value of the UK’s public assets – has the potential to reboot the economy and unblock schemes in all parts of the UK by bringing projects forward to market.
“We look forward to working with the Government to identify exactly where and when such investment can be best targeted, so that CECA members can get on with delivering the world-class infrastructure required for the high-growth, zero-carbon economy we all want to see.”
Meanwhile, David Hawkes, interim associate director of policy at the Institution of Civil Engineers, said the budget needs to make clear the outcomes the government wants to deliver from infrastructure investment, which should be informed by what the public’s needs are.
Hawkes said: “It’s no good investing in transport infrastructure that doesn’t get people where they want to go. Agreeing what outcomes the country needs to work towards is the first step.
“Different funding models should be considered, and private sector finance should be part of the conversation.
“However, for the private sector to invest, the government needs to understand what barriers and risks exist and mitigate them.
“The private sector needs clarity on what financing models will look like and HM Treasury should also outline requirements for programme management to control costs and ensure projects deliver intended outcomes.
“Our research tells us that the public continue to view the government as responsible for delivering infrastructure, regardless of how it has been paid for.
“This means that the government and the investment community need to make a clear case about risks, rewards, and benefits, and clearly communicate those to the public in a transparent and easy to understand way.”
CIOB head of policy and public affairs, David Barnes, argued the government needs to apply greater focus on the skills crisis faced in the sector.
Barnes said: “We hope to soon see the Government launch its new industrial strategy including some much needed certainty that greater investment will be made into existing and new infrastructure projects, of which construction will play a crucial part.
“There has been a significant amount of attention given to the Government’s housebuilding targets, but we are still lacking detail on how we develop the skills and capacity to deliver on these ambitions.”
According to the Home Builders Federation (HBF), under Labour’s homebuilding plans alone, the equivalent of an additional 152,000 workers will need to be found.
Barnes continued: “We need more detail on the new growth and skills levy, which will replace the existing apprenticeship levy, as it’s currently unclear to employers who this new levy applies to, what contributions they will be required to make and how they can access funding from it to upskill existing and new employees.
“It is important however Government does not focus on levy-only solutions, and instead take a root and branch approach.
“One transformative solution would be to implement the House of Lords’ built environment committee recommendation to create an English built environment GCSE, to inspire the next generation of professionals.
“Consideration must also be given to the funding of under-resourced roles such as planning officers and building control officers, both of which are integral to the housebuilding process.
“Government has also talked about a home upgrade revolution and we’d like to hear more about how it plans to get this off the ground as it will have far reaching impact across the sector, which has in the past had negative experiences with short-term schemes that have not been properly planned.
“It’s vital those responsible engage with industry experts to ensure the right people with the right skills are in place to assess homes and plan and deliver retrofitting schemes that will be for the long-term.”
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