While the proof of the pudding will be in the delivery, Chancellor Rachel Reeves’ Spending Review offers a number of positive messages for the UK construction sector. PBM considers a number of responses from across the industry, including from the Builders Merchants Federation, Federation of Master Builders and more…
The BMF has welcomed a £39 billion boost for affordable housing announced by the Chancellor of the Exchequer, Rachel Reeves, in today’s Spending Review. The BMF believes the investment is a major boost for the delivery of social and affordable housing, which will provide significant long-term market stimulus. The trade body also confirmed that the building materials supply chain is in good shape to support market growth.
John Newcomb, CEO of the BMF, said: “This is a major boost for house builders, housing associations and local authorities and a big increase on previous funding arrangements. The provision of additional funding will boost the building of much-needed social and affordable housing and provide the crucial market stimulus that the BMF and other trade associations have been asking for.
“As well as funding new developments, the extra money may help housing associations buy up thousands of new units that private developers have already built as part of their affordable housing commitments, which are currently empty because housing associations cannot afford to buy them.”
John continued: “BMF members have been actively strengthening their manufacturing, distribution and sales footprint across the UK, to ensure the availability of the building materials required to support housing growth. We’ve also launched one of the largest industry sector recruitment programmes, Building Materials Careers, www.bmcareers.com to attract the right talent and skills into the building materials supply network to further support the materials supply chain.”
The FMB states that the Chancellor’s decision to spend £39bn to boost social housing projects is a welcome move to help tackle the housing crisis, “but the delivery of these homes needs to be open to small local housebuilders who are often shut out of the procurement process.”
Brian Berry, Chief Executive of the FMB, said: “The Chancellor’s commitment to social housing needs an accompanying delivery strategy that puts SME builders at its heart. Small, local firms are uniquely positioned to unlock the potential of overlooked small sites, deliver high-quality homes, and boost local economies. By working in partnership with housing associations, SMEs can also help tackle the industry’s skills gap by training and employing people in their own communities.”
Brian added: “It is also pleasing to see £1.2bn investment in apprenticeships and training, but we know from the Construction Industry Training Board (CITB) that the UK will need more than a quarter of a million more workers entering the industry by 2028 if the Government is serious about meeting its 1.5 million new homes target. Today’s announcement simply doesn’t go far enough.
“It’s also disappointing that, once again, no progress has been made on the Government’s flagship commitment at last year’s General Election to retrofit 5 million homes. The UK’s housing stock is amongst the oldest and least energy-efficient in Europe. If we are to meet our net-zero goals, a comprehensive retrofit strategy is essential. SME builders are ready to deliver, but they need direction, support, and for the Government to follow through on its pledge.”
Allan Wilen, Economics Director, commented: “Funding for social housing has been a longtime coming. However, whilst the Spending Review promises plenty of support over the next decade, it’s essential that early progress is made to provide the capital funding required for housing associations to bring forward more social housing projects and the resources to take on social and affordable homes provided by private housebuilders through the section 106 obligations.
“However, it appears that there is still a lack of political commitment to address the poor energy efficiency of the UK’s housing stock, most of which is privately owned, in order to cost effectively deliver net zero and protect households from future energy price rises.”
He continued: “Current funding programmes remain focussed on improving the energy efficiency of existing social housing and tackling fuel poverty. Whilst direct public subsidies to homeowners to upgrade the energy performance of their homes is unlikely to find political favour, the tax system could encourage homeowners to take action.
“For example, stamp duty rates could vary according to a homes EPC rating and/or stamp duty rebates could be available to purchasers undertaking energy efficiency improvements to their new home.”
On communities & amenities, Allan added: “Local amenities were also mentioned within the review, with a commitment to support 350 communities upgrading their public services and spaces from parks and landmarks to libraries and youth centres. This will provide a good, steady stream of work for local contractors and subcontractors, potentially supporting SME builders who have had a tough ride over the past few years.”
He also said: “Education buildings, often overlooked in previous Spending Reviews, also featured. The Government has earmarked budget to address crumbling classrooms and put an end to temporary learning spaces, a reference to the RAAC eradication programme, which is already in full-swing. Not only that it’s doubled down on its commitment to ‘rebuild’ 500 run-down schools up and down the country.
“However, many might feel that the allocation is not nearly large enough to address the extent of dilapidation which exists across many state schools up and down the country.”
The NHBC has welcomed the Chancellor’s Spending Review announcement for social and affordable housing boost, but cautions “quality must remain a priority.”
David Campbell, NHBC’s Chief Operating Officer, said: “We welcome the government’s continued focus on affordable and social housing, with today’s announcement from the Chancellor Rachel Reeves of a £39bn boost for the sector over the next ten years.
“The target of 1.5m new homes by the end of this parliament is an ambitious one, which is why it’s important the potential of all tenures and all types of housing is maximised. The demand for affordable homes across the UK is acute, and it’s encouraging to see long-term targeted funding for this sector.”
He added: “At NHBC, we’ll be seeking to ensure new homes are built to the quality owners and occupiers should expect, and that this is maintained during any period of growth. This will pay dividends in the long-term, for the industry, for local communities and for home occupiers.”
Royal Institution of Chartered Surveyors
CEO Justin Young said: “This is a significant and welcome announcement from the Government. For too long, the housing sector has lacked the long-term certainty needed to plan and deliver at scale. RICS has consistently called for an increase in public investment to match the ambition of building 1.5 million homes, and this 10-year programme does just that.
“RICS also welcomes the focus on developing the energy infrastructure required to support energy security and grid decarbonisation, supporting economic growth.
“Importantly, this commitment provides the clarity and confidence that local authorities and the wider built environment sector need to get construction started and to invest in the people, skills and materials that will make this ambition possible.
“We now need to ensure this ambition translates into action, with the right enabling conditions in place from a well-resourced planning system to a skilled a workforce. RICS and our members are ready to support the delivery of high-quality, affordable homes for communities across the UK.”
Chief Executive Officer Simon Ayers MBE said: “TrustMark is pleased to hear the announcement in today’s Spending Review to fully meet the Government’s Warm Homes Plan commitment to upgrade homes through energy efficiency measures, alongside installing heat pumps and other low-carbon technologies, such as solar panels and batteries.
“We look forward to continuing to collaborate with the Government and industry to deliver these commitments to support thousands of households in the months and years ahead.”
