With the impact of the Autumn Budget still fresh in people’s minds, we were not expecting much from today’s Spring Statement that would be directly relevant to UK construction, manufacturing or distribution. The focus of the Chancellor’s Spring Statement was always likely to be on ‘difficult decisions’ regarding the pressure on government finances and increased defence spending in the light of greater global uncertainty and risks. As the onus was on the government to stick to its fiscal rule, the options were to either increase taxes or cut spending, and the Chancellor focused on reducing day-to-day government spending across the civil service and social care to ensure that capital expenditure was broadly maintained from the Autumn Budget, which is positive.
Another positive is that the Spring Statement included an additional £2 billion in social and affordable housing in 2026‑27, which acts as a bridge to long‑term investment into social and affordable housing through to the government’s Spending Review in June. In addition, amongst an additional £2.2 billion for the Ministry of Defence, there will be an allocation to secure better homes for military families. The government also reiterated that it is committing £625 million in England over four years to enhance existing training routes, ensure a sustainable flow of skilled construction workers, and support employers in investing in training, with the aim of delivering up to 60,000 additional skilled construction workers during this Parliament.
However, the Office for Budget Responsibility (OBR), which produces the independent economic forecasts accompanying the Chancellor's Spring Statement, now forecasts that house building in the UK over the five-year parliament will be 1.3 million net additional dwellings, which would approximate to around 1.0 million net additional dwellings for England. As the government's target is 1.5 million net additional dwellings over the 5-year parliament in England (as housing and house building policy in Scotland, Wales and Northern Ireland is devolved), the government will fail to meet its target by around 50%. However, this is in line with the CPA’s forecasts, and the CPA has been highlighting this to its members since the new government took office last year.