Following the release of Labour’s inaugural budget under Chancellor Rachel Reeves, I had the opportunity to engage in a candid discussion with Oliver Peterson, an experienced project manager at a mid-sized construction firm located in Birmingham. The setting of our conversation was a lively café, where Oliver shared his insights on the budget, echoing the observations recently articulated by Dr. David Crosthwaite, chief economist at the Building Cost Information Service (BCIS).
Focus360 Energy: property compliance services – pre-planning to post-construction. Learn more.
“The budget was a mixed bag,” Oliver remarked, his tone oscillating between cautious hope and scepticism. “The headline figure of £100 billion in capital spending grabs attention. However, as Dr. Crosthwaite rightly noted, it seems to lack the depth and actionable substance necessary to truly ‘get Britain building again’.” Labour’s budget was unveiled with a series of ambitious promises designed to revitalise the construction sector, notably including a £5 billion allocation for housebuilding over the upcoming year and an extension of the HS2 rail link to London Euston. Despite these initiatives, Oliver and many of his peers remain sceptical about the budget’s capacity to catalyse substantial growth within the industry.
Oliver expressed a critical concern shared by many in the field: “What we’re really missing here is a clear plan to tackle the skills shortage that’s plaguing us. The government talks about constructing 1.5 million homes, but without a skilled workforce, that’s just not feasible. We need a long-term strategy encompassing training and development, not merely funding announcements.” These concerns reflect those of Dr. Crosthwaite, who also pinpointed the lack of clarity on meeting these ambitious targets. While the revival of the HS2 link is seen as a positive development, there is a consensus that greater commitment is essential for other vital infrastructure projects, such as the Lower Thames Crossing.
Our dialogue naturally progressed to the Warm Homes Plan, which pledges £3.4 billion over the next three years. Here, Oliver’s perspective became somewhat more optimistic. “It’s a step in the right direction,” he conceded, acknowledging the persistent demand for high-quality, affordable housing. The additional funding for the Affordable Homes Programme is certainly welcome, but the emphasis must be on ensuring this money is utilised with efficiency and effectiveness. Oliver was also quick to underscore the necessity of stability for developers and housing associations. The proposed five-year rent settlement for social housing, as mentioned by Eoghan O’Lionaird of Wates, is seen as a promising initiative. “Certainty on rents can really help us plan ahead. It encourages long-term investment, which is crucial for delivering large-scale projects.”
The conversation inevitably circled back to the overarching impact of the budget on the construction sector. “The Chancellor’s decision to raise employers’ National Insurance contributions is a real blow,” Oliver lamented. “This will make it even more challenging for firms to hire new staff, which we desperately need.” Yet, despite these hurdles, Oliver took some solace in the government’s pledge to a 10-year infrastructure roadmap. “Having a long-term plan is essential,” he affirmed. “It provides us with a target and the consistency needed to attract investors and maintain a steady supply chain.”
As our discussion drew to a close, Oliver reflected on the broader implications of the budget. “It’s a start, but there’s so much more to be done. We need the government to truly commit to infrastructure, not just in terms of funding, but by creating an environment where projects can thrive.” The sentiment among construction professionals like Oliver and economists such as Dr. Crosthwaite is unmistakably clear: while Labour’s budget lays down a framework, it lacks the bold, transformative vision required to fully rejuvenate the construction sector and, ultimately, to get Britain building again. For now, the industry watches intently, hopeful that the forthcoming Spending Review will deliver the radical change it so urgently requires.
Be the first to comment