The New UK Government’s Plans for the Built Environment

Those based in the UK, or with an interest in politics, will undoubtedly be aware of the recent General Election that took place in July 2024, the significant majority achieved by the Labour Party, and the new UK Government for the next parliamentary term. With such a significant change in the make-up of the UK government (going from a Conservative majority of 44 MPs to a Labour majority of 180 MPs), many will asking what this means for key industries like construction and what can we expect in policy terms in the short, medium and long term.  

So far, a number of announcements related to the built environment have been made , with the King’s Speech last week setting the new Government’s priorities for the year ahead. 

This blog will provide a brief round-up of what policy changes related to construction have been announced so far, as well as look at what else the construction sector should expect from the new Government in future based on their manifesto campaign pledges.

What has been announced by the new Government so far?

In its first week, the new Labour cabinet members addressed the public and set their tone for governing with a focus on stability and economic growth. The built environment has been a feature in some of these statements, initiating some of the key programmes of reform pledged in the Labour manifesto.

In her inaugural speech, Chancellor of the Exchequer, The Rt Hon Rachel Reeves MP declared that the Government would ‘get Britain building again’, setting construction of new housing and infrastructure as a major economic focus for the first parliamentary term. Front and centre of this pledge to accelerate construction is reform of the National Planning Policy Framework (NPPF) to unlock and accelerate the building of both new homes and infrastructure projects. This will include restoring mandatory housing targets for local authorities, increasing the weight given to local plans in deciding the fate of planning applications, as well as a focus on amending the planning framework to better enable new nationally significant infrastructure, including new roads, railway, reservoirs, prisons, laboratories and gigafactories. 

Reeves also announced several surrounding policies to accelerate development, including an immediate repeal of the ban on onshore wind in England, a new taskforce to push forward stalled housing sites, and the addition of 300 new planning officers in England. Simultaneously, the Chancellor announced a shakeup of planning to prioritise consideration of the national interest and economy in planning decisions, a review of greenbelt boundaries and a prioritisation of developing on brownfield and lower-quality green belt land (referred to as ‘grey belt’ land by the new government) . Reeves also stated that essential to all plans for development will be the delivery of more affordable homes.

During the most recent King’s Speech (17 July 2024) the Government set out its legislative programme for the year ahead. The following changes were announced relevant to the construction industry and the built environment: 

• Planning and Infrastructure Bill announced to accelerate the delivery of high-quality infrastructure and housing. The Bill will include the range of measures announced previously by the Chancellor to streamline the planning process and remove barriers to development in the planning system.
• Skills England Bill to establish a new public body, Skills England, that aims to develop skills in the workforce. The body will aim to provide a ‘single picture of national and local skills needs’, convening national government, Combined Authorities, industry and training providers to develop a programme of work to tackle industry skills gaps. Steps to set up the body have already been taken by the Government, with the plans to establish the body in phases over the next 12 months.  There will be plans to develop the skilled workforce for construction specifically, both locally and nationally, including a plan to help reduce the sector’s reliance on overseas workers.
• Reform of the Apprenticeship Levy was announced to go alongside the introduction of Skills England, to meet Labour’s pledge to replace the current apprenticeship funding system with a more flexible Growth and Skills Levy.
• Great British Energy Bill to establish a publicly owned company headquartered in Scotland, Great British Energy. The new company will invest in green energy technologies to supply 100% clean energy in the UK by 2030, by driving the installation of thousands of clean power projects including onshore wind, solar and hydropower.
• English Devolution Bill that will drive greater devolution across in England, including new powers for Metro Mayors & Combined Authorities. Some of the changes will include greater devolution of adult skills funding, and a new requirement for all English authorities with devolution deals to produce Local Growth Plans to specify a strategy for economic development based on local industry. There is also an offer to transfer more powers for housing, adult education and planning to all county and unitary councils where there is not currently a devolution deal.
• National Wealth Fund Bill to establish a National Wealth Fund that will invest in ports, hydrogen and industrial clusters, as one measure to boost economic growth and a green transition.
• Re-establish the Industrial Strategy Council with representation from business. The Council will develop a national industrial strategy in partnership with industry to drive economic growth.
• Renters’ Rights Bill that will provide better protection for renters and aim to improve the quality of rental properties, including by extending Awaab’s law to rental properties and by ensuring homes meet minimum energy efficiency standards.
• Employment Rights Bill to take a range of measures to upgrade workers’ rights, including banning zero-hour contracts, stopping ‘fire and rehire’ practices, strengthening enforcement of workplace rights, remove restrictions on trade union activity and introduce the right to flexible working from day one of employment. 
   

What should the construction industry expect from the new Government going forwards? 

The new Government has made it clear that planning reform will be the top priority for the first 100 days of government.  The Labour Party set an intention to focus on construction activity in the build-up to the General Election, having pledged to build 1.5 million homes and a ‘generation’ of new towns over the next Parliament if elected. However, there are an array of further policy pledges the new governing party made in their manifesto relevant to our industry that we are yet to hear about.  

A selection of the Labour Party’s key policy pledges that stand to directly impact the construction sector are set out below.

Quality & Safety
 

• Respond to the findings of the Grenfell Inquiry expected to be published in September, act to accelerate the pace of remediation and continue to support leaseholders against cladding remediation charges. 
• Amend the Compulsory Purchase Order process to ensure landowners are awarded fair compensation for specific types of development schemes, rather than inflated prices based on the prospect of planning permission
  Sustainability
• Deliver a Warm Homes Plan to upgrade energy efficiency of 5 million homes though grants and low interest loans. Support investment in insulation and other home improvements such as solar panels, batteries and low carbon heating. 
• Ensure all homes in the private rented sector meet minimum energy efficiency standards by 2030. Work with the private financial sector to provide further finance to accelerate home energy efficiency upgrades and low carbon heating.
• Improve access to the national grid to support electrification of industry and accelerate clean energy projects.
• Unlocking the building of homes affected by nutrient neutrality.

People & Skills 

• Transform Further Education colleges into specialist Technical Excellence Colleges, that will work with local industry to train the workforce according to the needs of local economies.
• Reform the points-based immigration system, including by linking immigration and skills policy. Ensure that migration to address skills shortages triggers a plan to upskill workers and improve working conditions.

Innovation & Industry

• Develop a 10-year infrastructure strategy, to support delivery of projects and provide certainty for supply chains. Create a new National Infrastructure and Service Transformation Authority to bring together existing bodies, set strategic infrastructure priorities and oversee the design, scope, and delivery of projects.
• Simplify the procurement process to support innovation, as well as reforming procurement rules to give SMEs improved access to public contracts. 
• Act on late payments for small businesses.

This list of policy changes on the horizon stand to affect all corners of the construction industry, from measures to accelerate retrofitting of homes, better include SME builders in procurement, and continue to build on the progress already made on building safety measures and enforcement. With the Labour Party making it clear that they intend to deliver on all their manifesto pledges, the construction industry should anticipate seeing many of these intended changes turn into policy over the next five years. However, without a set timeline  or much detail of what will be implemented, the construction sector will need to wait to see the pace and final shape of these policy changes.

What actions will CIOB be taking in response to the new Government?

Whilst the UK Government intends to accelerate development of the built environment across many subsectors, the effectiveness of these measures will be determined in their detail. 

As a result, we will also be looking to share our views with the Government on any relevant policy proposals to members and the wider built environment in the coming years. CIOB will be closely monitoring further announcements from the new Government and the introduction of key bills to Parliament. 

CIOB welcomes the new Government’s ambitions to improve the UK’s built environment across the UK through driving housebuilding, infrastructure development and retrofitting at scale, to address wider economic, social and environmental challenges. We also welcome the implied intention of the new Government to provide the underlying economic stability and a clear direction of travel to allow contractors and supply chains to be in the position to deliver on transforming the UK’s built environment.

However, the new Government will need to act fast to address the current capacity of the sector to deliver on such ambitious targets for developing the built environment, notably its ongoing shortage of skilled workers. It is also vital that the new Government ensures our sector has the skills, resources and support to ensure that construction work is delivered to a high standard of quality and safety.