Spring Statement 2025: Government aims to launch construction sector into growth

In the Spring Statement, Chancellor Rachel Reeves has made commitments that will significantly benefit the construction industry, seeking to address current challenges while paving the way for a more resilient and sustainable sector.

It is noteworthy that the Spring Statement particularly focuses on growth, in line with the government's narrative since coming to power last year, stating that it is "increasing capital spending by a further £13 billion over the Parliament to support growth‑enhancing investments including infrastructure, housing, and defence innovation."

So what do you need to be aware of?

Infrastructure

The government is committing £4.8 billion to the Strategic Road Network in 2025-26, and claims that "the funding includes £1.3 billion for road renewals, which, alongside the £1.6 billion for local road maintenance, represents a record level of spending on fixing the road network."

Affordable housing

The government also says that it will invest an additional £2 billion in social and affordable housing in 2026‑27, which it describes as "a down payment on this government’s housing ambitions". It adds that the funding will "deliver up to 18,000 homes, and will immediately allow housing associations and local councils to bring bids forward for new developments in every part of England".

Expect to hear more about investment in social and affordable housing in the Spending Review in June, which will set out future capital spending plans for governmental departments.

Construction skills

£625 million has also been committed to boost existing training routes to "ensure a sustainable flow of skilled construction workers and support employers to invest in training". The government believes this will deliver up to 60,000 additional skilled construction workers - and these workers are much needed if the government is to meet its objectives around housebuilding and infrastructure.

The government hopes this investment will support construction skills bootcamp places, create additional apprenticeship spaces, enable delivery of more construction courses, attract industry experts to teach in further education, and "establish 10 new Technical Excellence Colleges specialised in construction in every region in England".

Ian Atkinson, WBD Construction Partner, has shared his thoughts on this announcement here.

Defence

Given the current global landscape, it's unsurprising that the Spring Statement places a strong emphasis on defence spending, with a commitment to provide an additional £2.2 billion of funding for the Ministry of Defence in 2025-26. 

While much of the focus is on innovation, technology and equipment, the Spring Statement also highlights "capitalising on the opportunity presented by the buy‑back of the MOD Service Families housing stock, to refurbish the defence estate and provide our military families with the homes they deserve".

Major projects

The government has also used the opportunity to highlight that it is publishing a consultation on proposals for a new process "to provide increased tax certainty in advance for major projects." More information on this is available on the government website here.

Springboarding into a brighter construction future?

Simon Rowland, Partner and Head of WBD's Construction Team, commented:

"It's encouraging to see such a significant commitment to investment in construction. This boost is precisely what the industry needs to gain the certainty it needs to plan and execute future projects effectively.

The industry has long-lived challenges, such as the much talked about housing crisis and skills shortages. On top of that recent global events, like global supply issues and soaring material costs, have seen the industry working on increasingly tight margins making it susceptible to insolvency. 

The investment announced by the government is essential to addressing some fundamental difficulties for the industry and to meeting the already high demand for quality buildings and infrastructure. But the investment has to come strategically and speedily if the government is to have any hope of meeting its ambitious plans and targets this Parliament."