Later this month the Chancellor of the Exchequer will set out his Autumn Budget and Spending Review to Parliament.
It should not be underestimated how important this is both to the UK economy, and to companies from across the UK construction industry.
This Spending Review will set the money available to public bodies to deliver their priorities over the coming three years. As such it is the moment at which strategic priorities and budgets are set for government departments. As outlined in the recent construction pipeline publication, many capital programmes are already supported by long-term funding settlements. As a result, the Spending Review can be expected to add further detail to government’s approach to investment paid for by the public purse.
The Construction Leadership Council has written to the Chancellor outlining how the Government can get best return on money committed to construction delivery and maintenance.
We need to be clear on the circumstances in which this letter has been prepared. Last year we all welcomed the enormous and unprecedented financial interventions that the Government delivered to support companies and employees through the biggest crisis in generations. We also welcomed the significant investment commitment in last year’s Spending Review. Inevitably however, the pandemic has left the public finances in an extremely challenging state.
It may surprise people in the industry that this has not led to the preparation of a long list of new projects we want the Government to back. We all know that there is a huge amount to be done, not least in accelerating the decarbonisation of the UK’s existing building stock, and it is clear that construction is a huge driver of economic growth.
Put simply, there is little point in presenting the Government with a further list of works that almost inevitably would have to be ignored, and in the process losing the opportunity to emphasise those things that the government could and should continue to invest in. We should remember that the Government has already displayed its confidence in the industry through its support to building back better including major investments including HS2 and the Health Infrastructure Plan.
We hope and expect that the Chancellor will use the Spending Review to commit to maintaining existing levels of investment beyond the current spending review period. This will sustain employment and growth in a way that few other industries can – levelling up communities large and small across the whole of the UK.
Our second ask is linked to the Government’s commitment to deliver net zero carbon by 2050. We know as an industry that one of the single largest interventions to achieve this would be a programme to retrofit the UK’s existing housing stock, driving carbon out of the heating and running of homes.
We are not asking for money at this stage but instead something that is in the long term more important. In advance of the completion of the Heat and Buildings Strategy, we are calling for the national retrofit programme to become a strategic priority for government in the coming three years. This will mean that it is an area of significant concern for senior ministers to work with industry, developing a fully funded programme paid for both by public and private sector, to secure a step change in the carbon performance of the built environment.
We have welcomed the work that has already been done by the Construction Innovation Hub to improve the productivity of industry. Building on this work will act as an enabler of the retrofit programme, driving the innovation to push down cost. For this reason, our only specific new funding ask is that the Government continues to match industry support for the Hub to develop new and better approaches to retrofit. This support will also underpin ongoing work to develop digital twins of UK built assets, allowing them to be much more effectively managed, securing lower long-term costs and much better carbon performance.
We know that to deliver all this we will need to upgrade our skills. We are not calling for a specific funding intervention for construction but instead have asked that the government sustains its efforts to promote future skills by maintaining existing support for employers to take on apprenticeships and continues to refine the operation of the Apprenticeship Levy.
The CLC’s mission is to support the sector to provide leadership and to collaborate to deliver industry change. The Government plays a huge rule in delivering this change – we hope that the Spending Review will help us take the next big step towards a better industry for everyone.