Chancellor Rachel Reeves has set out her plans for the UK economy during her Spring Statement in the House of Commons.
It came as the Office for Budget Responsibility (OBR) - which monitors the government's spending plans - unveiled its latest economic forecasts.
The OBR has estimated changes to England's planning system announced last year will boost housebuilding by 170,000 over five years - the changes are forecast to grow the size of the economy by 0.2% by 2030, and 0.4% by 2035.
The Chancellor £625m will be spent in England over four years to boost existing schemes to train workers in the construction sector.
Allan Wilen, Glenigan’s Economic Director, said: "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 £129 billion worth of projects have secured planning approval over the past year, and many of these schemes could now break ground.”
Eddie Tuttle, Director of policy, external affairs and research at CIOB, said: “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.
“Our research into young people’s perceptions of construction careers, published in March, found two thirds (68%) of young people aged between 16 and 24 hold a positive view of construction careers and around a third (31%) would consider working in the construction sector. However, almost half (47%) said information about it was not included in the careers advice they received whilst in education.
“Therefore, vital consideration should be given to how construction career opportunities are promoted to young people if we are to get more of them taking up the training places the Government is planning to create. Construction is a career that has something for everyone. Without proper communication of the varied opportunities within the industry, additional funding towards construction careers will go to waste.
“We were pleased to learn of plans for the new Teacher Industry Exchange Scheme to encourage industry experts into further education roles to ensure their valuable skills and knowledge are passed on the next generation. High quality training experiences are vital if we are to tackle the large drop-out rates in construction, and thought must be given to ensuring jobs are available for those completing courses.
“Finally, we welcome the creation of the Construction Skills Mission Board and look forward to hearing more about how it will function. CIOB alone has access to 50,000 members with a variety of expertise in construction. Without the views of those who work for or run their own construction business, we risk the mission board failing to develop the targeted policy solutions needed to address the skills gap in both the short and long term. We urge the Government to set up clear communication channels between the mission board and professional bodies like CIOB.”
With the impact of the Autumn Budget still fresh in people’s minds, The CPA said it was not expecting much from the Spring Statement that would be directly relevant to UK construction, manufacturing or distribution.
“The focus of the Chancellor’s Spring Statement was always likely to be on ‘difficult decisions’ regarding the pressure on government finances and increased defence spending in the light of greater global uncertainty and risks,” it said.
“As the onus was on the government to stick to its fiscal rule, the options were to either increase taxes or cut spending, and the Chancellor focused on reducing day-to-day government spending across the civil service and social care to ensure that capital expenditure was broadly maintained from the Autumn Budget, which is positive.
“Another positive is that the Spring Statement included an additional £2 billion in social and affordable housing in 2026‑27, which acts as a bridge to long‑term investment into social and affordable housing through to the government’s Spending Review in June. In addition, amongst an additional £2.2 billion for the Ministry of Defence, there will be an allocation to secure better homes for military families. The government also reiterated that it is committing £625 million in England over four years to enhance existing training routes, ensure a sustainable flow of skilled construction workers, and support employers in investing in training, with the aim of delivering up to 60,000 additional skilled construction workers during this Parliament.
“However, the Office for Budget Responsibility (OBR), which produces the independent economic forecasts accompanying the Chancellor's Spring Statement, now forecasts that house building in the UK over the five-year parliament will be 1.3 million net additional dwellings, which would approximate to around 1.0 million net additional dwellings for England. As the government's target is 1.5 million net additional dwellings over the 5-year parliament in England (as housing and house building policy in Scotland, Wales and Northern Ireland is devolved), the government will fail to meet its target by around 50%.
“However, this is in line with the CPA’s forecasts, and the CPA has been highlighting this to its members since the new government took office last year.”
Simon McWhirter, UKGBC’s Deputy Chief Executive, said: “We welcome the Treasury’s £2 billion investment in social and affordable housing, but these homes need to be aligned with a Future Homes Standard which ensures the high quality and energy efficient homes people deserve, and prevents the need for expensive retrofitting in the future. The current proposals are simply far too anodyne and much more bravery is required.
“The UK urgently needs a comprehensive long-term National Retrofit Strategy, to deliver the warm, comfortable, healthy homes people need, with funding to match. The initial £3.4 billion committed in last year’s budget is also welcome, but not enough. Too many people are still living in damp, draughty homes that are making them sicker and poorer.
“Investment in our net zero future supports industry, business and society – it is central to Labour’s promise to bring down household energy bills and revitalise the UK’s towns, cities, and infrastructure. The Chancellor previously said there was “no trade-off between economic growth and net zero”, but we need to see these goals embedded in a long-term strategy.”
RICS CEO, Justin Young, said: “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 £2 billion 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 £600 million 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.”
The Chartered Institute of Architectural Technologists (CIAT) welcomed the confirmation of skills funding and investment in affordable homes through the Chancellor’s Spring Statement.
Responding to the statement, Eddie Weir PCIAT, President, said: “The Spring Statement shows just how crucial modernising the built environment is to the UK economy, with the OBR forecasting that the changes to the National Planning Policy Framework (NPPF) already implemented will deliver an additional 170,000 homes by 2029, boosting GDP by 0.2% over the same period.
“CIAT also welcomes the confirmation of £2 billion for the affordable homes programme in 2026-27 and £625 million over four years to expand and upskill the construction workforce. These green shoots of progress are welcome, but much more will be needed to deliver 1.5 million homes by 2029, and to upgrade a further five million years through the warm homes plan.
“Chartered Architectural Technologists will be looking to the upcoming Spending Review to provide the additional investment required to tackle the housing crisis and deliver the high-quality, sustainable homes people need.”
