Budget 2025

Rachel Reeves has delivered her second budget, which has come after months of speculation and briefings that have become so common place. In the preceding months, the Chancellor and the Government floated all kinds of ideas to see how the public responded to them, and this seemed to cause a lot of confusion as to what the Government wants to achieve.

Recently, the Government has been trying to reassure the public about its commitments to building and infrastructure, and the Chancellor made a clear commitment in the budget today to the capital budgets that she agreed to in the spending review. A total of £120 billion in capital spending.

However, during the budget there was little to zero mention of housing beyond general references to keeping to targets on infrastructure delivery and capital spending. Her bigger focus when it came to infrastructure was selling the Government’s decisions on broader and larger strategic national infrastructure projects.

Overall, this budget could be seen as a response to the political problems facing the Government from its backbenchers and its poor performance. It has been an attempt to satisfy its “rebellious” backbenchers. Or, it could be seen as an attempt by the Chancellor to focus on the three missions of cutting waiting lists, cutting the cost of living and cutting debt.

What will this budget do for the housing sector, though? I don’t think it’s going to turbocharge the construction industry, or drive forward housing to meet the Government’s targets of 1.5 million homes in this Parliament. The Budget was light on any specific announcements on funding that would generate the building needed. Rachel Reeves did however, make two specific announcements that would be relevant – 1. Further funding for increased planning capacity and 2. New investment for Mayors to deliver on infrastructure.

The first is clearly a response to the previous announcement on increased planning office capacity, which would only have provided 0.8 planners per local authority and the second is a further reassurance of the Government’s commitment to their Strategic Mayoral Authority devolution programme.

It’s too early to tell whether this budget will be harmful to the construction industry, but to turbocharge the housebuilding agenda in this country, it is clear the Government may need to be a bit more ambitious in providing the capital and drive for the construction industry to be confident of making the investments needed. Otherwise, the Government could be well off its target it set itself.