Construction businesses have been busy reviewing what the recent Autumn Budget announcements mean for their operations in practice.
At the heart of the Government’s announcements were commitments to modernizing approaches and delivering sustainable projects.
The construction industry has been a key player in the UK’s recovery following the height of the Covid-19 pandemic. So it is perhaps because of its ongoing growth and ability to continue functioning throughout lockdowns that it did not feature as heavily as other sectors in the review. However, where spending on transport, housing and health has been announced, the industry is now poised to support delivery of this work.
While there are still set to be challenging months ahead it is predicted economic recovery from the pandemic will be quicker than first anticipated.
The boost this has created allows for significant increases in public spending without any significant increases in tax, said the Chancellor, Rishi Sunak. This spending is now set to benefit the construction industry broadly, including:
Infrastructure & Transport spending
Billions of pounds has been pledged to upgrade infrastructure nationwide, including £24bn for road maintenance and £2bn for cycling and walking networks.
Infrastructure projects have delivered particularly high output throughout 2021 as upgrades and new developments work to ease congestion, improve public transport and link regional economies. Construction contractors are already enjoying the benefits of this, seeing higher values for projects overall.
£1.8bn extra has been made available for housing supply, to create more than one million new homes. An additional £2bn will be spent on bringing 1,500 hectares of brownfield or derelict sites back into use. This includes £300m specifically for smaller brownfield sites, hoped to create more opportunities for SME developers.
To meet sustainability and net zero targets, a £3.9bn fund has been established to aid the decarbonization of buildings. And a further £1.8bn will be made available to support low-income households to transition to green energy solutions.
On top of this, £65m has been ringfenced to modernize the planning process, making it digital to improve access to key information and increasing caseworkers’ capacity to improve outcomes and speed up decision-making.
And perhaps the most significant announcement, impacting all business types and sizes, was the national living wage increase, up by 6.6% to £9.50p/h; benefitting workers across the board. The Government has said it wants to develop a ‘high wage, high productivity’ economy.
Local authorities, investors and developers are now looking at how best to deliver on these funding pledges, creating attractive, versatile and sustainable developments. Working with experienced construction contractors will help each to capitalize on the opportunities presented.