Commenting on today’s Autumn Budget announcement, CPA Economics Director, Professor Noble Francis, said: “The Chancellor announced a challenging Budget that we believe provides room for cautious optimism. Whilst prioritising the stabilisation of UK finances and promotion of growth across the economy, there were a number of measures related to supporting the construction and manufacturing sectors and our key asks. Chief amongst those will be the near-term spending increases in affordable house-building; continued spending on repair, maintenance and improvement for a select group of hospitals; a wider commitment to increased capital investment including maintenance programmes for the NHS, schools and transport infrastructure including an almost 50% increase in funding for local roads maintenance; fuel duty relief (our sector is one of the largest users of the road network); an initial £3.4 billion towards heat decarbonisation and household energy efficiency through the Warm Homes Plan over the next three years; incentives for corporate R&D investment and provision for a new Industrial Strategy.
“That said, we also have concerns over the Government’s 10-year infrastructure and new housing strategies, which the industry will have to wait until Spring 2025 at least to learn about. Similarly, the New Hospitals Programme remains under review, although details are expected sooner, in November. Whilst the significant rises in the National Living Wage will benefit workers, it will increase costs significantly for employers. This is not only due to those on the National Living Wage but also for those on the levels above this who will want to maintain the premium. In addition, the increases in employers’ contributions to National Insurance will also add extra costs for employers at a time when the construction product manufacturing and distribution sectors have been hit hard over the last 18 months. Finally, whilst talking so much about investment, the government has decided not to progress with the road schemes on the strategic road network such as the A5036 Princess Way, A358 Taunton to Southfields, M27 J8 Southampton, the A47 Great Yarmouth Vauxhall Roundabout and A1 Morpeth to Ellingham.
“This Government will soon face a critical juncture, when its plans and ability to deliver its national infrastructure and construction pipeline will hopefully establish its credibility with industry, in marked contrast to its predecessors. Our hope and ambition is that Government appreciates the importance of the UK construction sector as an enabler for growth, productivity and so many of its policy ambitions.”
