The Impacts of the Autumn Budget on the UK Construction Sector
The Chancellor’s Autumn Budget 2024 introduces a substantial fiscal package with significant implications for the UK Construction Sector. With £100 billion allocated to capital investment and £5 billion for housing, it targets infrastructure growth, affordable housing, sustainability, and regional connectivity. The Budget’s tax increases, dedicated funds for rail, clean energy, and road maintenance, alongside new resources for local planning and school infrastructure, set a course for a more resilient and sustainable UK. This blog explores the Budget’s core elements, growth opportunities, and potential challenges for the UK Construction Sector.
The Budget includes a £40 billion tax increase—the second-largest tax-raising Budget since 1991—amounting to nearly 1.2% of GDP. Though tax hikes are typical post-election, this Budget establishes a new fiscal policy benchmark for the current economy.
Housing Development and Affordability
The Budget introduces initiatives to expand affordable and social housing, improve sustainability, and boost planning capacity. With funding for affordable housing, energy-efficient retrofits, and social housing remediation, demand is rising for projects prioritising affordability, safety, and sustainability in the UK Construction Sector. Measures like increased stamp duty on second homes and funds for planning aim to ease market pressures, support first-time buyers, and streamline development.
Over £5 billion in housing investments targets affordability and supply within the UK Construction Sector. Key initiatives include a £3.1 billion expansion of the Affordable Homes Programme, £3 billion in guarantees for small housebuilders and Build to Rent, and £56 million to unlock 2,000 homes in Liverpool. The £3.4 billion Warm Homes Plan will retrofit 350,000 homes, primarily for low-income tenants, while £1 billion will address social housing safety. Increased stamp duty on second homes aim to relieve market pressures and £46 million for local planning staff targets faster, sustainable development.
Infrastructure, Green Construction, and Regional Development
The £100 billion capital investment plan focuses on infrastructure, education, clean energy, and road maintenance. Major projects include the Trans-Pennine rail upgrade, HS2 London link restoration, and East-West Rail expansion, alongside a £500 million road maintenance fund to repair one million potholes. In energy, funding will support 11 green hydrogen projects, while £6.7 billion for education will fund school rebuilding and maintenance, advancing connectivity and sustainability in the UK Construction Sector.
Economic Growth and Budget Viability
While the Autumn Budget sets a bold vision, it hinges on sustained economic growth. Revised OBR forecasts show stronger growth in the short term but slower expansion from 2026 onward, potentially straining funding for long-term projects. Slower-than-expected growth may force the government to redirect funds or increase borrowing, risking delays in key initiatives. There are also practical issues which governments consistently fail to resolve: slow public procurement will invariably cause delays.
