Budget and spending review focused on growth but industry reacts to missed opportunities
Rishi Sunak delivered his third budget and an autumn spending review aimed at delivering on the levelling up and recovery programme. The focus of the chancellor’s budget was on encouraging economic growth and fiscal discipline, however, while construction leaders welcomed investment in housing and infrastructure there was criticism about missed opportunities for delivering net zero carbon targets.
Measures revealed by the chancellor included £2.6 billion being set aside for 50 road projects, the cladding tax on developers will raise £2 billion over a decade, and £1.8 billion in funding for housing developments on brownfield sites as part of a target to build 180,000 new home per annum. But no mention came of an integrated rail strategy and the future of the eastern leg of HS2.
Jeff May, Director of Government Relations and Business Development at the Construction Products Association, said: “We were disappointed to see little help for major industrial users with energy costs, or any further financial details on net zero strategies. That said, we welcome a handful of relevant items in particular: the announcements on businesses rate, and the extension of the uplift to the Annual Investment Allowance.”
Simon Lewis, construction partner law firm Womble Bond Dickinson, commented:”The £5 billion grant which will be set aside to pay to remove unsafe cladding from the highest-risk buildings in the country was of course welcome in today’s Budget Announcement, but as always, the devil is in the detail. Given the significant number of buildings that have been found to be unsafe, limiting this just to “higher risk buildings” and only for cladding is overlooking all of the other unsafe buildings that fall outside these parameters.”
Brian Berry, chief executive of the FMB said: “The chancellor has missed the opportunity to give householders peace of mind about how they can tackle the net zero challenge. With nothing on retrofit for owner occupiers in last week’s Heat and Buildings Strategy, I’m struggling to see how the country will reach its legally binding net zero targets by 2050 if it doesn’t fix the UK’s 29 million leaky homes.”
Graham Harle, CEO of Gleeds Worldwide, said: “Last weeks’ news on the Governments heat and buildings strategy, gave the Chancellor a chance to announce serious funding for a long term national retrofit programme to improve the energy efficiency of the UK’s 30 million buildings but we heard nothing and news of the much delayed revised integrated rail plan was also absent. But when achieving Carbon zero is seen as a bigger issue by most people than Covid, the lack of investment in this area was a missed opportunity.”
Brendan Sharkey, partner at MHA, says the significant investment in infrastructure and training is what the construction sector hoped for but the immediate problem is actually the labour shortage and nothing was done to solve this: “The Chancellor can’t do much about the cost of materials but he can do something about labour. He recognised the value of people with certain skills coming to the UK but it is unclear (and unlikely) the new visa system will do much for the construction sector.
“Two-year visas for key construction workers would have been the single best thing he could have done to address the shortage of labour in the industry. The fear must be that all of his investment promises won’t go as far as he would like but will instead just push up costs because business can’t source the labour.
Cllr James Jamieson, Chairman of the Local Government Association, said: “Capital investment in skills, transport, housebuilding, and the provision of school places for children with special educational needs and disabilities (SEND) announced today are positive. It is also good that the Government will provide additional funding to help councils continue their ongoing efforts to support people at risk of rough sleeping and homelessness and to fix potholes and improve our local roads.”
