Robbie Blackhurst, chair of the Centre for Construction Best Practice, analyses the Spring Statement and its likely impact on the housing crisis, skills and planning
The chancellor’s Spring Statement demonstrated the government’s ongoing commitment to tackling the housing crisis, with a focus on social and affordable housing.
The extra £2bn per year in capital funding for housing is a significant step, with the potential to deliver up to 18,000 social and affordable homes across England. While this investment is positive, it is only one part of the solution and does not fully address the scale of the housing crisis.
Feedback from the Centre for Construction Best Practice’s (CCBP) corporate partners, highlight the need for support across all housing tenures. This includes not only permanent homes but also temporary housing solutions, which is a critical issue that requires urgent attention.
We spoke with our corporate partner Eoghan O’Lionaird, CEO of Wates Group, who stated: “The housing crisis is hitting hardest in temporary accommodation, with 123,000 households, including families living in unsuitable conditions. The impact is profound, affecting health, wellbeing and educational outcomes.”
Modular homes provide a practical, cost-effective solution to this issue. They can be built and deployed quickly, offering high-quality temporary housing. However, our partners report bureaucratic planning restrictions that hinder their widespread use.
The government could introduce a fast-track planning process for temporary housing, similar to the emergency measures used for Nightingale hospitals during the pandemic.
A fast-track system would help local authorities deliver accommodation quickly, alleviating pressure on temporary housing and improving living conditions for those affected.
Clear direction needed
The £2bn extra spend for social and affordable housing is part of a wider £4.65bn allocation for infrastructure and housing, with most of the funding expected to be spent later in the parliament.
While this long-term commitment is encouraging, the housing sector has faced numerous challenges, including rising material costs, labour shortages and regulatory pressures. Without clear action on how these funds will be managed, there is a risk that they will fail to deliver meaningful outcomes.
Levy on new homes risks further strain on developers
Additionally, the proposed £3.4bn levy on new homes, designed to fund building safety remediation after Grenfell, raises concerns.
While the intention behind the levy is understandable, it risks putting further strain on developers, particularly SMEs, which are already dealing with rising costs and regulatory burdens.
If mishandled, the levy could delay projects, reduce developer confidence and slow down housebuilding. The government must ensure that the levy doesn’t exacerbate the housing shortage or increase costs for developers and homebuyers.
For the housing sector to thrive and meet the government’s ambitious housing targets, a balance between financial and regulatory measures is necessary.
More effort needed on recruitment and retention
The £745m investment in construction skills over five years is a positive step toward addressing the skills gap. However, more effort is needed to ensure the sector can attract and retain the workforce it needs.
The built environment sector is one of the largest employers, though the rise in National Insurance Contributions (NICs) to 15% is set to place further strain on our sector, which needs to attract just under 251,500 workers by 2028 to maintain its current state, not to mention delivering long-term government ambitions.
Main contractors, subcontractors and material suppliers will feel the pinch of these increased costs, which could stifle the appetite to recruit and retain talent.
Planning reforms must incentivise builders
National Planning Reforms are a key part of the government’s strategy. However, for these reforms to be effective, they must do more than change planning procedures. The reforms need to incentivise new housing development, streamline planning approvals and reduce barriers so the industry can get back to doing what they do best – building.
The government’s housing targets are ambitious, with a goal of building 305,000 homes per year by the end of the forecast period. The Office for Budget Responsibility (OBR) estimates that this could bring the government closer to its broader target of 1.5m new homes by 2030.
While these targets are encouraging, they will require more than just supply-side measures. Demand-side solutions must also be considered, ensuring adequate support for all housing sectors, including temporary and supported housing.
The chancellor’s commitment to social and affordable housing is undoubtably a welcome step, but it must be part of a broader, more comprehensive strategy.
A holistic approach addressing both temporary and permanent housing needs, streamlining planning processes, investing in the construction workforce and ensuring developers are not burdened with additional costs is crucial.
Without a coordinated approach to rising material and labour costs, the government’s targets may remain out of reach. The built environment sector is ready to play its part, but it requires the right conditions to do so effectively.
Only then can the government deliver on its promises and truly “Get Britain Building”.
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