Autumn Statement: More with less

For the most part of this year, conversations with our clients and colleagues in the public sector have been coloured by the prospect of, and preparation for, a recession.

The Chancellor’s Autumn Statement last week confirmed that we have now officially crossed that threshold, with the OBR forecasting that the UK economy will continue to shrink over the next year. It’s through this lens that we should reflect on the new Chancellor’s fiscal plan.

However, ever the optimist, it’s important that I pick out some of the positives from what was long-positioned by the Treasury as a Budget of difficult decisions. From an infrastructure perspective, major projects including HS2, Sizewell C and parts of the original Northern Powerhouse Rail plan will go ahead – although still not to the scale demanded by regional mayors. The second round of funding via the Levelling Up Fund will also go ahead, to at least match the ￡1.7bn invested in round one.

These projects will all act as major employers and contribute to local authorities’ ability to deliver positive regeneration in their communities. Clearly though, the lack of new funding within the Autumn Statement suggests they will need to double down on the existing funding pots available. My experience is that some public sector bodies are far more experienced and efficient in securing funding than others – which is why we are actively working with those who struggle to upskill them in these areas.

On the subject of skills, the appointment of a new adviser to the Chancellor and the Education Secretary on the implementation of a skills reform programme bodes well for the future. However, the skills gap is something we have long talked about in the construction sector and our industry should stand ready to welcome new talent and address the labour supply challenges that have lingered post-Brexit and the pandemic.

Perhaps the most positive point for me though was the renewed commitment to a greener economy, which had fallen away from government rhetoric over the summer. The Statement included both a core commitment to the Glasgow Pact – which includes a 68% reduction in UK emissions by 2030 – and a new national ambition to reduce energy consumption from buildings and industry by 15% by 2030; equivalent to a ￡28bn saving from our national energy bill. Construction will again play a significant role, with the opportunity to support the Chancellor’s extension of existing retrofit budgets into the next parliament.

We were of course prepared for last week’s announcements, and the recession that has now been confirmed. While I know many contractors will be concerned about their future, I’d like to close by pointing out that the anticipated depth of this downturn is far shallower than that experienced after the 2008 financial crisis (a third to be exact). Equally, the world is more ready and willing to transition to a green growth model; dependent on sustainable buildings and communities. More so than ever, it’s important that we view regeneration and the race to net zero as an opportunity. ??