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Did the budget build a path to construction recovery, or just pile on another layer of uncertainty?

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Did the Budget lay the foundations for a construction recovery, or just another layer?
Did the Budget lay the foundations for a construction recovery, or just another layer? Picture: LBC/Alamy
Neil Sansbury

By Neil Sansbury

This Budget came at crunch time for our construction sector.

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The government has spent over a year laying out its vision for growth – backed by long-term infrastructure ambitions, planning reform, and a substantial national pipeline – but vision alone will not deliver the growth the UK needs.

There must now be relentless and meticulous efforts to turn these commitments into tangible progress on the ground.

Despite reassuring rhetoric that infrastructure is fundamental to economic renewal - and the announcement of major backing for projects such as the Lower Thames Crossing, Northern Power Rail, and local service construction - the Budget still leaves a gap between the scale of the challenge and an instructive way forward for achieving the right pace of delivery.

We continue to lack the roadmap to overcome and unblock the practical barriers that constrain delivery. Without a means of acceleration, the UK risks losing momentum at the very moment it should be pushing forward.

We need strong and consistent coordination at the centre of government if we are to meet targets and maintain the UK’s competitive edge. The recent creation of NISTA is solid progress towards this aim, but it will only be effective if it is suitably empowered and supported by ministerial leadership that understands how to drive major complex programmes.

Giving the system clearer ownership, authority, and better tools would send a strong signal that the government is serious about delivery.

It is also critical that national leadership is balanced with local empowerment. The transfer of central powers to local authorities is welcome and could see the growth seen in Manchester replicated elsewhere.

The £13bn of flexible funding for seven mayors will expand local capacity to deliver real transformation. Equally important, the government’s £1.5bn Youth Guarantee and Growth Skills Levy will help young people enter the workforce – a vital step in the right direction for the construction sector, which is currently facing a shrinking pipeline of skills and talent.

Solving the squeezes.

Persistent inflation and heavy tax changes continue to squeeze the construction sector, which operates on tight margins. High interest rates make investment harder to unlock and increase the cost of bringing forward projects. Kicking major schemes into gear at scale requires stability, which we should be striving to create for our economic environment.

Calm, not chaos, is what will encourage, not dampen, investment. In the meantime, the targeted investments that have come out of this Budget are inarguably positive; it’s much-needed decisive action and a boost to bottom lines.

Yet the message seems to be more about revising than reimagining, and rerouting government money fails to go far enough – it’s now about attracting flows of private capital back into infrastructure.

To succeed here, though, we will need a model that attracts long-term investors, protects public value, and gives industry the confidence to innovate.

Track records are enough to go on: when public and private sectors pull in the same direction, delivery is often expedited. Building collaborative, well-structured partnerships will be key to unlocking strategic, long-term transformation.

A resilient future

And that’s the crux – long-term resilience. The UK’s infrastructure needs to be not just fit for today, but also for what comes tomorrow.  Unfortunately, there was sparse mention of the need for resilience beyond economic considerations, a disappointment but also not a surprise.

Steering the best course for construction means designing a built environment that can withstand the test of climate over time.

Faster, smarter, more sustainable and more certain construction will only happen when resilience is embedded within our infrastructure efforts. Ambition is not lacking; it is pace and purpose that we must urgently catch up on.

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Neil Sansbury is the Managing Director at Ramboll UK & Ireland

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

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