Government’s first budget must be bold and not delay decisions

When Chancellor Rachel Reeves presents the Autumn Budget to Parliament at the end of this month, 118 days will have passed since Labour’s election win—nearly double the 61 days Gordon Brown took to set out his spending plans the last time Labour took power from the Conservatives, and almost three times longer than the 42 days George Osborne needed before his emergency post-election budget in 2010.

The fact that Liz Truss and Kwasi Kwarteng’s mini-budget in September 2022 was unleashed just 17 days after she became Prime Minster proves that speed is not always of the essence. However, in the intervening period since this summer’s general election, a lack of substantiated detail from the government has left an air of uncertainty hanging over the construction industry – not least with recent reports of potential cuts to major schemes, and a decision on the Lower Thames Crossing being delayed again until at least May 2025.

Ahead of Labour’s first fiscal event in 14 years, BCIS experts outline their hopes and concerns.

Dr David Crosthwaite, Chief Economist – ‘We need commitment to the project pipeline’

The government needs to be bold in order to deliver on its pledges for housing, infrastructure investment, and decarbonisation, while addressing critical economic and industry challenges. This needs to be sooner rather than later. With the Spending Review and 10-year Industrial Strategy due to be published in spring 2025, it’s vital that key decisions aren’t just delayed until next year.

I’d like to see a commitment by the government to the existing project pipeline. If that’s not possible, then a new project pipeline needs to be established, and that needs to be done fairly quickly. We need to provide the industry with some certainty, ensuring that upcoming projects are going to go ahead and that there are defined budgets for them.

If reports are to be believed, the government is set to tinker with corporation and capital gains taxes. This is unlikely to stimulate investment in construction, as investment in fixed capital typically leads to more construction activity.

I’d like to see more investment in fixed capital outlined in the budget, and that would include roads projects, rail projects, hospital building, and prison building—things that are generally part of the existing project pipeline.

More generally, I think we need more clarity on what the new government is proposing. We’ve heard catchy slogans and some promises, but nothing concrete about how these things will be delivered in practice. So, I’m really keen, and I’m hoping to actually see this in the budget, that we’ll get some details on how they plan to “get Britain building” again.

Addressing the skills shortage is critical. The government must invest in education and training to create a pipeline of workers equipped with green construction skills, including retrofit, heat pump installation, and sustainable modern methods of construction (MMC). This needs to be done alongside resolving existing shortages across the industry.

James Fiske, CEO – ‘Mandating embodied carbon should be a net zero priority’

The most significant contribution the government could make to decarbonisation would be the introduction of a mandate for the reporting of embodied carbon, which makes up 20% of UK built environment emissions, through the industry Part Z proposals. This would also help to ensure that the government’s ambition to build 1.5 million homes could be achieved as sustainably as possible, without compromising its net zero targets.

Labour has pledged to invest £21.7 billion in carbon capture and storage, as part of its plan to reignite Britain’s industries, create jobs for the future and attract investment. This has the potential to herald a new and exciting era for clean energy and be integral to the government’s aim to make Britain a clean energy superpower by 2030.

However, this investment needs to be aligned with a wider strategy that supports the built environment to decarbonise. Our industry has long been a hotbed of innovation and we are often shown what’s possible when a commitment to sustainable practices and new technologies are combined. We can’t do more of this without more funding, which is why we need more investment in initiatives, such as Innovate UK developing clay as a low-carbon alternative to concrete. Equally, we need to invest in education and training to develop a pipeline of workers with green construction skills that include retrofit, heat pump installation and sustainable modern methods of construction (MMC). This is in addition to dealing with existing skills shortages across the industry.

I hope that the Warm Homes Programme to raise EPC ratings and lower energy bills will be properly funded. The £6.6 billion Labour has promised amounts to just £1,320 when divided among 5 million homes, a woefully inadequate sum.

Karl Horton, Chief Data Officer – ‘Cancelling major projects increases costs in the long-run’

I am really concerned that the government is going to use the Autumn Budget, in light of it revealing a £22 billion black hole in the public finances, to take a sledgehammer to some vitally important schemes.

Delaying or cancelling major projects would shrink industry output, reduce job opportunities, and hurt sectors dependent on construction activity. This approach runs counter to Labour’s commitment to growth and the ‘get Britain building’ agenda, which focuses on expanding infrastructure to drive economic recovery. These cuts could severely weaken efforts to promote long-term growth and investment in the UK.

If we set costs aside for a moment, infrastructure projects are ultimately about delivering social and economic benefits to the nation. They are designed to improve the welfare of our people — whether through better road and rail networks or by expanding healthcare and education facilities to meet the needs of the next generation. You cannot fix the NHS or Prison Service without improving and expanding their built estates.

From a construction standpoint, halting these projects now would drastically reduce output in the short to medium term. While cancelling may relieve immediate financial strain, history shows us we’ll likely pay more to reintroduce these plans down the road.

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