A number of construction industry organisations have reacted broadly sympathetically to the Chancellor of Exchequer's Spending Review.

Rachel Reeves, Chancellor of Exchequer, has presented the resuls of the government's latest Spending Review to Parliament. The announcement, placed under the theme of "renewal", focuses principally on investments in the NHS (£29 billion) and to allow the Ministry of Defence to start delivering the Strategic Defence Review (£11 billion).

However, infrastructure and housing were also allocated significant sums of money. The Chancellor announced £15.6 billion funding in total by 2031-32 for local transport projects in England’s city regions, and £2.3 billion from 2026-27 to 2029-30 for local transport improvements outside of these nine regions. A further £2.5 billion will go to connect Oxford and Cambridge through the continued delivery of East-West Rail and plans to take forward work on Northern Powerhouse Rail will be set out in the coming weeks.

Funding announced will deliver upgrades to Cardiff Central station, reduce journey times between Manchester and Leeds through continued investment in the TransPennine Route Upgrade, and progress the delivery of Midlands Rail Hub, enhancing connections from Birmingham across the West Midlands and to other regions.

The Chancellor also confirmed "the biggest boost to social and affordable housing in a generation", confirming £39 billion of investment over ten years through a new Affordable Homes Programme, as part of the Plan for Change commitment to build 1.5 million homes by the end of the current Parliament.

According to the Treasury, this settlement represents the first time in living memory that the government has set out a programme that provides ten years of certainty – giving the sector the confidence to deliver for now and for the future of housing in Britain and turning the tide on the housing crisis in this country.

The Spending Review also commits £14.2 billion for Britain’s first state-funded nuclear power station since 1988 in Sizewell C, provides over £2.5 billion for one of Europe’s first Small Modular Reactor programmes, and allocates £9.4 billion to UK carbon capture and storage over the Spending Review period - all while supporting Britain’s acceleration to net zero and driving growth.

The Chancellor also confirmed additional funding for up to 350 communities, especially those in deprived areas, through Plans for Neighbourhoods – giving new long-term regeneration funding.

The government will also establish a Growth Mission Fund to expedite local projects that are important for growth but have been forgotten, such as Southport Pier, Kirkcaldy’s seafront and High Street, and a new sports quarter in Peterborough.

In the coming weeks, the government will release its Infrastructure and Industrial Strategies – providing the certainty and stability sectors need to invest and work to drive our growth mission.

The construction industry has been swift to react to the announcement with the Builders Merchants Federation (BMF) welcoming the £39 billion boost for affordable housing. John Newcomb, CEO of the BMF, said: “This is a major boost for house builders, housing associations and local authorities, and a big increase on previous funding arrangements.  

“The provision of additional funding will boost the building of much-needed social and affordable housing and provide the crucial market stimulus that the BMF and other trade associations have been asking for. 

“As well as funding new developments, the extra money may help housing associations buy up thousands of new units that private developers have already built as part of their affordable housing commitments, which are currently empty because housing associations cannot afford to buy them.”

Dr David Crosthwaite, Chief Economist at BCIS, said: “As the dust settles on the much-anticipated Spending Review, there's finally some good news for construction. Confirmation of significant capital spending on fixed assets over the next decade is a relief, and the lever needed to unlock private sector investment.

“The big question is, can construction actually deliver all of this investment? In the current climate, suspicion says probably not. Unless the supply position radically changes, the sector is ill-equipped to meet extra demand.

“Therein lies the major problem for the government’s attempt to ‘get Britain building again’.

“The housing sector is no doubt breathing a collective sigh of relief at the £39 billion injection in the Affordable Homes Programme, and the £10 billion assigned for crowding in private investments. The government has veered well off course on its new homes target so new funding brings further room for manoeuvre.

“That said, the government does not control housing supply. Housebuilders do. They are looking to maximise profit and therefore run a tight ship when it comes to maintaining the supply and pricing level of new homes.

“Building 1.5 million homes is still a big if. More funding over 10 years is a contribution, not a guarantee of delivery.” 

Brian Berry, Chief Executive of the Federation of Master Builders, said: "The Chancellor’s commitment to social housing needs an accompanying delivery strategy that puts SME builders at its heart. Small, local firms are uniquely positioned to unlock the potential of overlooked small sites, deliver high-quality homes, and boost local economies. By working in partnership with housing associations, SMEs can also help tackle the industry’s skills gap by training and employing people in their own communities.

"It is also pleasing to see £1.2bn investment in apprenticeships and training, but we know from the Construction Industry Training Board (CITB) that the UK will need more than a quarter of a million more workers entering the industry by 2028 if the Government is serious about meeting its 1.5 million new homes target. Today’s announcement simply doesn’t go far enough. It’s also disappointing that, once again, no progress has been made on the Government’s flagship commitment at last year’s General Election to retrofit 5 million homes.

"The UK’s housing stock is amongst the oldest and least energy-efficient in Europe. If we are to meet our net-zero goals, a comprehensive retrofit strategy is essential. SME builders are ready to deliver, but they need direction, support, and for the Government to follow through on its pledge."

Neil Jefferson, CEO at the Home Builders Federation, said: "Putting housing associations on a firmer footing should, over time, deliver more new homes and help address the long-term crisis in the market for subsidised homes delivered through planning agreements.

"However, a year into this parliament, housing supply metrics and indicators of investment in the sector are still lagging well behind where they should be. This will likely persist until government grapples with the challenges being faced by prospective first-time buyers trying to get on the housing ladder."

Justin Young, CEO of the Royal Institute of Chartered Surveyors, saying: “This is a significant and welcome announcement from the Government. For too long, the housing sector has lacked the long-term certainty needed to plan and deliver at scale. RICS has consistently called for an increase in public investment to match the ambition of building 1.5 million homes, and this 10-year programme does just that.  

“RICS also welcomes the focus on developing the energy infrastructure required to support energy security and grid decarbonisation, supporting economic growth.

“Importantly, this commitment provides the clarity and confidence that local authorities and the wider built environment sector need to get construction started and to invest in the people, skills and materials that will make this ambition possible.

“We now need to ensure this ambition translates into action, with the right enabling conditions in place from a well-resourced planning system to a skilled a workforce. RICS and our members are ready to support the delivery of high-quality, affordable homes for communities across the UK.”

Tim Balcon, CEO of the Construction Industry Training Board (CITB), commented: “We support the government’s commitment to getting Britain building again. Over £110 billion announced for infrastructure projects like Sizewell C, a fresh £39 billion affordable homes funding settlement, and £13 billion for upgrading millions of homes with improved insultation all translates to a buoyant construction industry. In total, there’s positive news to the tune of about £165 billion for the industry.

“Of course, we need the skills on the ground to deliver these ambitions. To improve understanding of retrofit work, we’re supporting the development of a Repair, Maintenance and Improvement (RMI) Sector Skills Plan, which aims to identify the specific skills needs and requirements across various occupations within the RMI sector. We’re investing £3.8 million in the plan to develop tailored strategies, projects and interventions that address the unique needs of the sector.

“Similarly, at the beginning of this year, we launched the Sizewell C Skills Charter in partnership with Sizewell C, ECITB, Suffolk County Council, and East Suffolk Council. This was a commitment from all parties to working with training providers to support local recruitment and skills development that will have a lasting positive impact on employment and productivity in the area.

“Earlier this year, the Government announced a £600 million construction skills package, £32 million of which is investment from CITB to deliver increased industry placements. Back in November, we announced a £40 million commitment to support the creation of Homebuilding Skills Hubs. I genuinely believe this is a once-in-a-generation chance to us to recruit and train our workforce – equipping more people with the skills they urgently need now and in the future.”

The MCS Foundation also welcomed the announcement that the Government has committed to fully funding the Warm Homes Plan in line with Labour’s 2024 Manifesto Commitment. The Warm Homes Plan, further details of which will be revealed later this year, will help people find ways to save money on energy bills and deliver warmer, cleaner to heat homes through initiatives such as the Boiler Upgrade Scheme. 

Garry Felgate, Chief Executive of The MCS Foundation, said: “It is fantastic to see the Government demonstrate its commitment to the decarbonisation of homes through a fully funded Warm Homes Plan. 

“Decarbonising homes can deliver warmer homes, lower bills, and tackle the climate crisis. Following last week’s news that all new homes in England will come with renewables as standard, this is an important next step in providing certainty for industry and consumers, which will aid the rollout of low-carbon technologies such as heat pumps. 

“We look forward to seeing further details of The Warm Homes Plan in due course.” 

Simon Ayers MBE, Chief Executive Officer of TrustMark, said: “TrustMark is pleased to hear the announcement in today’s Spending Review to fully meet the Government’s Warm Homes Plan commitment to upgrade homes through energy efficiency measures, alongside installing heat pumps and other low-carbon technologies, such as solar panels and batteries. We look forward to continuing to collaborate with the Government and industry to deliver these commitments to support thousands of households in the months and years ahead.” 

Peter Rainier, Principal Director of Planning at law firm DMH Stallard, concluded: "To ensure the wider aspiration for high volumes of housing over the coming years, there is still much to be done, particularly in ensuring local planning authorities are properly resourced, SME'S are assisted and through the Planning Bill, that strategic/local plans are progressed efficiently and development is not unduly hampered by concerns relating to surface water and environmental protections."

This page will be updated as further reactions emerge.