The wider industry has given a decidedly lukewarm response to the Chancellor’s Spring Budget, with the majority regarding the statement as “underwhelming”.
There is concern that promises of growth made during the Autumn have now been replaced by a more overall cautious approach that does little to boost the industry’s prospects.
RIBA President Muyiwa Oki said: “With a General Election on the horizon, it’s no surprise that announcements aim to boost household budgets.
“But the Government has lost sight of the bigger picture and missed a key moment to improve our buildings – especially our homes.
“A weak economy, housing crisis and climate emergency demand urgent attention.
“Millions of substandard, ageing homes are leaking energy and money. The government must bring forward a National Retrofit Strategy – a well-funded programme to boost the green economy, cut emissions and lower people’s energy bills.
“Today’s investment in new housing is welcome, but it’s a drop in the ocean compared to what is needed. Without more support, we will fail to deliver the number of high-quality, sustainable homes and places the country needs. A simplified, well-resourced planning system will not only address housing challenges, but boost sustainable development, grow the economy, and make people healthier and happier. It's essential and long overdue.
“We will continue to work with the Government to create a better built environment for everyone.”
Eddie Tuttle, Director of Policy, External Affairs and Research at CIOB, agreed that the budget speech ‘lacked long-term focus’ on issues like housing supply.
The CIOB is hoping the next budget, regardless of who is in power, will seize the opportunity to drastically improve the skills landscape for the construction sector – which is crucial for the success of levelling up and reaching our national housing targets.
“We’re pleased the Government is extending access to finance for small and medium-sized businesses – which make up much of the construction industry - through the Recovery Loan Scheme,” he said.
“It also is pleasing there is an intention to build more homes; however the Government must give serious consideration to one of our key focuses – ensuring all homes built are of the highest quality and are future-proofed to reduce the need for retrofitting down the line.
“We have made it clear that a national retrofit strategy is essential to driving down emissions from operating and using buildings, which currently accounts for 19 per cent of the UK’s carbon footprint.
“The Government also needs to urgently review its unfit-for-purpose apprenticeship system, which regrettably was not mentioned in today’s budget.
“For the construction sector, many businesses feel unable to offer apprenticeships due to an ongoing struggle to retain staff, with many leaving to work elsewhere once qualified.
“A wholesale review of both the system and its funding is needed to make sure training is affordable and incentivised for construction businesses to deliver the number of qualified professionals needed by both the sector and wider economy.”
Gillian Charlesworth CEO at BRE responds to Spring budget 2024: “While there was some good news today for individuals, with cuts to National Insurance and reforms to child benefit, this was not the net zero Budget the country needed. The UK urgently requires a clear, long-term plan to decarbonise our homes and buildings, and there is still a long way to go to drive the much-needed transition to clean heat.
This plan needs to involve a raft of measures, from shifting levies from gas to electricity to encourage householders to install heat pumps, to providing guidance for local authorities so they can deliver retrofit programmes in each area of the country.
“Maintaining funding for our net zero commitments – including those related to the built environment – is crucial if we are to achieve our climate goals by 2050. It is disappointing to see that this detail was lacking from the Chancellor’s statement today.”
The UKGBC said the Chancellor had failed to address the 'urgent need for upgrading homes and buildings’.
Simon
McWhirter, Deputy Chief Executive at UKGBC said: “Unfortunately we’re
yet again seeing vote-chasing sticking-plaster politics as opposed to
the longer term political leadership we so desperately need. The
Chancellor has failed to address the urgent need for upgrading our homes
and buildings in this budget, which wouldn’t just help address the
climate crisis, but also directly tackle rising energy bills,
poor-quality homes and provide a jobs boost into the economy.”
Russell Dean, Residential Product Group Director at Mitsubishi Electric, said the firm would have liked the Spring Budget to focus on supporting households to move away from gas boilers and towards more renewable alternatives.
“This will be vital to decarbonising the UK and reaching the government’s own target of 600,000 heat pump installations annually by 2028,” he said.
"To achieve this target, Mitsubishi Electric is calling for the government to rebalance the cost of electricity and gas. The cost of electricity in the UK is higher than the cost of fossil fuels. From April gas prices will be capped at 6p/kWh while electricity will be capped at 24p/kWh – which puts unfair costs onto households wishing to adopt and install heat pumps.
"Rebalancing this cost would make electricity more affordable – particularly relevant at a time when the cost-of-living is causing huge strain across the UK. It would also move household energy requirements away from fossil fuels and volatile oil & gas prices, back UK energy security as the nation moves to renewable energy sources, and help to grow the green economy and employment in Britain.
"In the long term, we would like to see levies removed from electricity bills to balance these costs. In the short term, we support the Heat Pump Associations’ call for a Domestic Heat Pump Tariff Discount, which would reduce the price of electricity used for hot water and heating produced by a domestic heat pump.”
Dr David Crosthwaite, chief economist, BCIS, said the Spring Budget has continued the trend of fiscal events being distinctly underwhelming for the construction industry.
“There was very little in it that would give confidence to investors or to firms who are operating in still very challenging conditions,” he added.
“The Chancellor says he has a plan for ‘sustainable, long-term growth’ but we’re simply not seeing evidence of that in the announced policies and investment.
“Despite construction being a key lever of economic growth via the multiplier effect, there was no increase in spending announced.
“The repeated commitments to housebuilding were limited to only certain areas and schemes and there remain many questions over how the government intends to increase efficiencies in the planning process.
“Likewise, the claim of investing in infrastructure is there, but still not enough detail following the cancellation of HS2 Phase 2 and promised ‘Network North’ plans.
“As part of the Spring Budget, the government also responded to a framework, recently set out by the head of the National Audit Office, to help deliver tens of billions of pounds of government savings.
“One of the National Audit Office’s key concerns on getting value for public money was around national infrastructure.
“In its response, the government describes the recently updated National Infrastructure and Construction Pipeline as a 'critical document and dataset for industry, which provides more certainty and confidence in the future shape and scale of infrastructure work’.
“Unfortunately, the pipeline fails to do that in a number of ways, not least in its lack of clarity and less than convincing pledge to tackle skills shortages.
“Construction needs investment. We need more major projects to stimulate the economy and get Britain growing again.”
