Autumn Budget Update

5 Min Read

Following the Chancellor’s recent Budget announcement, Phil Wilson, Director of Architecture, and Robert Ray, Associate Director of Project Management, Employer’s Agent and Quantity Surveying, examine the key construction and development measures announced, and what they could mean for viability, investment and delivery across the built environment sector.

With the sector struggling, it means homes and infrastructure is not being delivered as quickly and effectively as the country actually needs. Overall, output is on a downward trend, and stubborn inflation, construction costs expected to rise by 6.6%, and global political factors add further complication, all of which continue to affect viability. In fact, 66% of respondents in recent RICS surveys identified financial constraints as a primary barrier to activity.

What was needed in the Budget was a fundamental policy or change to act as a circuit breaker to get the construction sector back on track, but instead there was a lack of significant new measures to support for planning departments or struggling contractors, or to tackle skills shortages long-term. While announcements like the additional £1.5 billion for social housing (intended to support approximately 10,000 homes) and a long-term infrastructure pipeline exceeding £750 billion provide welcome visibility, the reality is that a funded project is not necessarily a viable project and a viable project is not necessarily a deliverable one.

The Chancellor also announced there will be no major changes to Building Regulations during this Parliament, except where safety considerations make them necessary. While on the face of it this may provide the industry with greater regulatory certainty, it is questionable how much practical difference the announcement will make. The most significant recent regulatory changes affecting housing delivery have generally been driven by building safety requirements, such as the introduction of second staircase requirements for taller residential buildings. As safety-critical changes would still be permitted under the Government’s proposed approach, the announcement may offer greater certainty to developers but is unlikely to materially improve project viability or reduce delivery risk.

Aside from this, announcements on fiscal devolution, along with data centre and AI investment need more examination to identify how this converts to construction and where both the opportunities and challenges may lie. The uptake in AI-assisted planning tools for local authorities by 2027 could reduce administrative delays, but faster processing does not automatically produce better decisions. Technology must support professional judgement on placemaking, context, and heritage, not replace it.

Additionally, beyond new construction, Britain possesses an enormous built asset base of schools, healthcare, and housing requiring adaptation, remediation, and decarbonisation. Retaining and retrofitting existing buildings preserves embodied value and must sit alongside new builds as a central element of national growth strategy.

Ultimately, this Budget leaves many questions – the biggest of all being, how does it help solve the issue of viability across the sector?

Read more here.

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