What does the Autumn Budget mean for infrastructure, housing and skills?

Last week Chancellor Philip Hammond announced the Autumn Budget, setting out his key policies for local government and the construction and housing sectors. The Chancellor’s announcements reaffirmed the Government’s commitment to innovation and improving efficiency, by prioritising upskilling the nation.

In an endeavour to ‘look forwards’ and to ‘seize all the opportunities for Britain’, the Chancellor echoed manifesto pledges to build a stronger regional Britain and improve connectivity between UK cities.

The bundle of fresh money and policy included an extension to the Autumn Statement’s infrastructure fund - from £23 billion to £31 billion, £1.7 billion of which will be committed to a new transforming cities fund. Through improved connectivity and supporting the creation of jobs across the UK, the Chancellor committed to maintain his predecessor’s promises to the Northern Powerhouse and the Midlands Engine.

It was particularly promising to see commitment to specific large infrastructure projects, including improvements for the Tyne and Wear Metro, and rail and road connections in the Cambridge – Milton Keynes – Oxford Corridor. It also included £300 million to ensure HS2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail improvements. These significant projects show this Government's willingness to make Britain a world leader in innovative infrastructure.

However, the Chancellor’s biggest announcement was saved for housing, which saw £44 billion committed in Government support to boost construction, in order to meet a new target of 300,000 new homes a year, by the middle of the next decade.

But as ever, the devil is in the detail. The Government has not been able to deliver 300,000 new homes a year since the 1970s. One way to go about meeting this target is to increase the level of council and housing association building, alongside the private house-builders, but at the moment finance is still too much of a stumbling block.

A good start has been made by lifting the Housing Revenue Account (HRA) cap in high demand areas, giving councils better access to finance and the ability to build more affordable homes. However, the Government could go further and lift the HRA cap for all authorities.

The Government has also set out ambitious plans for further reform of the planning system, putting more pressure on local authorities to deliver permissions. To achieve this however, councils will need to be properly resourced and will only be able to deliver permissions more quickly if the authorities facing the greatest pressure have sufficient funding for their planning departments.

It was promising to see the Government use its purchasing power to drive adoption of modern methods of construction, such as offsite manufacturing, through its ‘Transforming Infrastructure Performance’ programme. Greater use of modular and offsite housing solutions is a huge opportunity and will be an essential part of increasing output. The Government and industry must embrace this as soon as possible, so the public sector and their communities can reap the benefits.

Crucially, the Government pledged £204 million of funding for innovation and skills in the construction sector, including training a workforce to build new homes, and £34 million to scale up innovative training models across the country. This is a positive step forward and absolutely vital for industry capacity, which cannot be stretched any further, and it is a good signal of intent to fight the growing skills gap.

The Budget’s wide-ranging package of policies and reforms are a great step in addressing the almighty challenge we have ahead of ourselves. As a nation we need to embrace the new investment and innovation to upgrade the nation’s buildings and infrastructure to build a stronger Britain that works for everyone.

Our article below explores the consequences of a growing skills shortage facing not just the construction industry, but many others, and why promises like this are a vital step in addressing this and avoiding a construction crisis post-Brexit.