Edit this article

Last edited 28 Mar 2025

Spring Statement 2025 with reactions from industry

1 The statement
2 Summary of key points
3 Industry responses
4 Related articles on Designing Buildings
5 External links

[edit] The statement

The Spring Statement was published on 26 March, 2025, in which Rachel Reeves confirmed £600 million investment for 60,000 more skilled construction workers, as well as outlining cuts to government spending, and significant changes to the welfare system amid a dramatic slowdown in growth. Prior delivering the statement the government spending watchdog rejected its forecasts for savings from welfare cuts, prompting the Office for Budget Responsibility (OBR) to cut its economic growth forecast for the year from 2 per cent to 1 per cent.

Below is a brief outline of some of the keys points, starting from the context of the construction industry, with reactions from the industry.

[edit] Summary of key points

[edit] Housing

An additional £2 billion investment in social and affordable housing in 2026–27, as a down payment on housing ambitions. There will be further announcements on wider long-term investment into social and affordable housing through the Spending Review. This is intended to give providers greater certainty in the short term and confidence to continue investing in development.

As previously announced in the Government Building Safety Levy technical consultation response, the budget confirms that the Building Safety Levy will be introduced from 1 October, 2026: "new residential developments in England (with certain exemptions) will incur the Building Safety Levy to raise revenue to be spent on building safety. The government has published a response to its technical consultation on this policy. Exemptions include affordable housing, and developments with fewer than ten units. Previously developed land also benefits from a 50% reduced rate to help ensure these sites remain viable."

[edit] Employment and skills

Investment in additional employment, health and skills support from 2026–27, scaling up to £1 billion a year by 2029–30, helping people start or stay in work, and not fall into long-term economic inactivity. Providing support to anyone receiving out-of-work benefits with a work-limiting health condition to build on existing support from WorkWell.

A commitment of £625 million in England over four years to boost skills, ensuring a sustainable flow of construction workers and supporting employers to invest in training. This is expected to deliver up to 60,000 additional skilled construction workers, a crucial part of delivering plans to build 1.5 million homes in England in this parliament.

An additional £100 million to support 35,000 construction-focused skills bootcamp places as a route for new entrants, returners, and upskilling existing employees. A further £40 million for up to 10,000 additional places on new construction Foundation Apprenticeships and an additional £165 million to boost funding for providers to deliver more construction courses, as well as a new Teacher Industry Exchange scheme to attract industry experts to teach in Further Education. Technical Excellence Colleges in English regions specialising in construction, are to receive £100 million.

Commitment to work closely with industry to remove barriers and unlock investment in training, with CITB doubling their New Entrants Support Team (NEST) programme to support employers, particularly SMEs, to recruit and retain apprentices. £32 million committed by CITB to the £100 million top-up of the government investment to support over 40,000 industry placements, as well as launching an £80 million capital fund to support employers in delivering bespoke training.

[edit] Business rates

In the budget last autumn, the government set out a commitment to reforming the business rates system to support the high street and boost investment. The published paper on priority areas for reform will be followed by an interim report setting out a clear direction of travel for the business rates system.

[edit] Public spending

The OBR forecasts the economy will grow by 1.0 per cent in 2025, slower than expected in October. Growth is forecast to accelerate to 1.9 per cent in 2026. Resource departmental expenditure limits or day-to-day spending will grow at 1.2 per cent in real terms per year from 2025-26 to 2029-30. Government departments will reduce administrative budgets by 15 per cent by the end of the decade, expected to save £2.2 billion a year by the end of this period. The government will set out its plans for spending and key public sector reforms at the Spending Review on 11 June 2025.

[edit] Public service reform

The creation of a £3.25 billion Transformation Fund to support reform of public services, opportunities for digital technology and AI, and to transform frontline delivery to release savings for taxpayers over the long term. The first allocations from the Transformation Fund will invest in vital public services and accelerate the modernisation of the state.

Reform of the children’s social care system by providing an additional £25 million for the fostering system, to include the recruitment of a further 400 new fostering households, to provide stability and address local government cost pressures.

£8 million for new technology to support probation officers in managing offenders to focus on reducing reoffending. £42 million for DSIT-led Frontier AI Exemplars, to test and deploy AI applications to make government operations more efficient and effective and improve outcomes for citizens by reducing unnecessary bureaucracy.

£150 million for government employee exit schemes. This will support a leaner and more efficient civil service, helping to reduce administration costs by 15 per cent by the end of the decade.

[edit] Welfare

The government will increase the Universal Credit standard allowance for new and existing claims above inflation from 2026–27, meaning the standard allowance weekly rate for a single person aged 25 and over will increase from £92 in 2025–26 to £106 in 2029–30. The Universal Credit health element will be frozen for existing claimants until 2029–30, and for new claims, the Universal Credit health element will be reduced to £50 a week in 2026–27 and frozen until 2029-30.

A fundamental review of the Personal Independence Payment (PIP) assessment, with policy experts, stakeholders and disabled people, to ensure PIP assessments reflect the shift in the nature of health conditions and the wider changes in society. In the meantime, a new, additional eligibility requirement of four points on one PIP daily living activity must be scored to receive the daily living element of the benefit. There will be a restart of the Work Capability Assessment reassessments where conditions may have changed and increased capacity to undertake PIP award reviews to ensure the right award is received. Greater steps and staff to tackle fraud and error will also be made.

[edit] Growth

The government will publish a modern industrial strategy alongside the spending review, setting out the government and industry’s 10-year plan to meet our shared ambitions for unlocking investment and accelerating growth across the 8 growth-driving sectors.

The government is increasing capital spending by a further £13 billion over the Parliament to support growth-enhancing investments, including infrastructure, housing, and defence innovation. This is in addition to the £100 billion increase in capital spending over the Parliament announced at the Budget last autumn.

[edit] COVID-19 fraud recovery retention

The Chancellor announced that the government has accepted the Covid Counter Fraud Commissioner’s recommendation to improve incentives for departments and local authorities to recover fraud from Covid schemes.

[edit] Industry responses

[edit] CIOB responds to the UK Government's Spring Statement 2025

CIOB has responded to the UK Government's Spring Statement, made in Westminster on 26 March 2025:

Eddie Tuttle, Director of policy, external affairs and research at CIOB, said: “We're pleased construction is finally being recognised as a key economic driver and welcome this substantial investment.

“Having continuously called for government to develop a long-term plan to improve the pipeline of people entering the construction sector, we are encouraged by the latest plans to address the ongoing skills shortage by increasing funding for educational and workplace training through an injection of £600m over the next four years.

“However, it will take several years for the thousands of workers the Government is planning to recruit to be trained to a competent standard and ready to work, so the plans are unlikely to have an immediate impact on the industry’s capacity to build the 1.5 million homes the Government is committed to. The impact of the increased funding will not come to fruition until this parliamentary period is coming to an end, so while we very much welcome the plans, we question if this will enable the Government to meet its ambitious housing targets.

“Our research into young people’s perceptions of construction careers, published in March, found two thirds (68%) of young people aged between 16 and 24 hold a positive view of construction careers and around a third (31%) would consider working in the construction sector. However, almost half (47%) said information about it was not included in the careers advice they received whilst in education.

“Therefore, vital consideration should be given to how construction career opportunities are promoted to young people if we are to get more of them taking up the training places the Government is planning to create. Construction is a career that has something for everyone. Without proper communication of the varied opportunities within the industry, additional funding towards construction careers will go to waste.

“We were pleased to learn of plans for the new Teacher Industry Exchange Schemeto encourage industry experts into further education roles to ensure their valuable skills and knowledge are passed on the next generation.High quality training experiences are vital if we are to tackle the large drop-out rates in construction, and thought must be given to ensuring jobs are available for those completing courses.

“Finally, we welcome the creation of the Construction Skills Mission Board and look forward to hearing more about how it will function. CIOB alone has access to 50,000 members with a variety of expertise in construction. Without the views of those who work for or run their own construction business, we risk the mission board failing to develop the targeted policy solutions needed to address the skills gap in both the short and long term. We urge the Government to set up clear communication channels between the mission board and professional bodies like CIOB.”

[edit] ECA comments on Government’s construction skills announcement

In response to the Government’s announced skills programme to deliver 1.5 million homes, Andrew Eldred, COO of the Electrical Contractors’ Association (ECA), issues the following remarks:

“We’re pleased to see the Government taking significant steps to address the construction skills crisis, which remains one of the biggest blockers to building homes, upgrading infrastructure and delivering net zero. Today’s announcement recognises the scale of the challenge and the vital role that electricians and the electrical sector will play in meeting it.

“Funding for new Technical Excellence Colleges and construction training is a positive step, but this must be matched by a sharper focus on quality and relevance. Too often, existing electrical training provision produces classroom-based learners without the practical experience or competence employers need. We must prioritise pathways that lead to becoming a qualified, competent electricians – via apprenticeship, NVQ or Experienced Worker Assessment.

“Government’s ambition to offer placements to all Level 2 and 3 learners is laudable, but risks being unworkable without a more targeted, locally brokered approach. SMEs simply don’t have the capacity to absorb tens of thousands of placements unless those learners are genuinely committed to a career in the sector.

This investment must now be paired with strategic reform: better industry involvement in training design, smarter use of the Growth and Skills Levy, and firm guarantees that these reforms will deliver for electrical and other construction trades – not just in volume, but in quality. The Electrical Contractors’ Association stands ready to support the Government with this next phase of this work.”

[edit] Spring Statement shows green shoots of progress for the built environment, says CIAT

Responding to the statement, Eddie Weir PCIAT, President, said on 26 March:

"Today’s Spring Statement shows just how crucial modernising the built environment is to the UK economy, with the OBR forecasting that the changes to the National Planning Policy Framework (NPPF) already implemented will deliver an additional 170,000 homes by 2029, boosting GDP by 0.2% over the same period.

CIAT also welcomes the confirmation of £2 billion for the affordable homes programme in 2026-27 and £625 million over four years to expand and upskill the construction workforce. These green shoots of progress are welcome, but much more will be needed to deliver 1.5 million homes by 2029, and to upgrade a further five million years through the warm homes plan.

Chartered Architectural Technologists will be looking to the upcoming Spending Review to provide the additional investment required to tackle the housing crisis and deliver the high-quality, sustainable homes people need."

[edit] The British Safety Council responds to Spring Statement 2025

Mike Robinson, chief executive of the British Safety Council said:

“While this wasn’t intended to be a budget in a traditional sense, we welcome the announcement that day-to-day spending across government has been protected; particularly when this comes to arm’s length bodies like the Health and Safety Executive and the Building Safety Regulator.

“The chancellor reiterated the government’s mission of national renewal, which both fuels and is fuelled by growth. This has seen significant reforms to England’s planning regime which will help to unlock growth, and is supported by £600m to train, retrain, and upskill the next generation of our construction workforce.”

[edit] National Housing Federation responds to Spring Statement 2025

Kate Henderson, Chief Executive of the National Housing Federation in response to the Spring Statement, said:

"Today's Spring Statement clearly indicates that delivering new social housing is intrinsic to the government's plans for growth. The £2bn downpayment for new affordable homes is hugely welcome and vital in preventing a cliff edge in delivery, ahead of the new funding programme being announced at the Spending Review.

"Investment in social housing is not only key to tackling the housing crisis, but is also excellent value for money, reducing government spending on welfare, health, and homelessness as well as boosting the economy. Housing associations are ready to work with the government to deliver a generation of new social homes. We hope to see a significant increase in funding for affordable housing at the Spending Review, alongside a package of support to help the social housing sector rebuild capacity, so we can build the homes we desperately need."