Labour's economic growth plan promises greater stability for construction, but uncertainty remains

Yesterday Rachel Reeves outlined the government’s plans for economic growth, setting out Labour’s intentions to cut investment funds for several transport projects, including the ‘Restoring our Railways’ scheme. The government is also reviewing the Conservative’s previous pledge to build 40 new hospitals by 2030. 

However, the Chancellor did announce a multi-year spending review that will set the budgets for government departments for at least three years and provide “long term certainty”. 

Kelly Boorman, national head of construction at RSM UK, comments: “The government’s announcement yesterday promises clarity and greater stability for the construction industry, given its focus on three-year budgets. This transparency and strategy will enable construction businesses to plan and manage delivery of projects more efficiently, linking closely to government’s industrial strategy and mandatory housing targets to help build a more resilient economy. 

“However, industry needs more information on Skills England and its role in encouraging greater innovation and new technologies in construction to support its role in the transition to net zero and ensure sustainable and long-term growth. Given yesterday’s announcement that there are cuts to infrastructure and public spending projects, businesses need greater transparency on the government’s industrial strategy in relation to investment in skills and infrastructure. There’s an opportunity for industry to diversify its workforce and create new roles for people with different skillsets, especially in tech and AI. This also needs to be considered in conjunction with access to EU labour.”

She added: “While innovation was at the forefront of yesterday’s speech, there remains uncertainty how this will be applied to construction procurement to ensure efficiency of delivery. This will be an integral part of the government realising its ambitious housing targets, so it’s important this is addressed as part of accelerated planning reform, infrastructure spend and productivity challenges.”