UK Autumn Budget 2024: Key Announcements for the Built Environment

Last week (30 November) the UK tuned into the much-anticipated 2024 Budget announcement to hear the Government’s economic plans for the current parliament.

Presented by the Chancellor, the Rt Hon Rachel Reeves MP, the budget was the first from the new government, marking the first Labour budget in 14 years and a key milestone for the UK construction industry to gain better certainty and clarity on the economic picture for the years ahead.

The 2024 Budget was not only highly anticipated due to it being the first from The Rt Hon Keir Starmer MP’s Labour Party, but also due to a deeply challenging economic environment for Government, individuals and businesses alike – including those in the construction sector.

The Chancellor’s speech centered on supporting growth through investment and providing certainty for business, with Reeves declaring the Budget “marks an end to short-termism”. However, the Chancellor clarified the Government’s position that tough choices must be made in the face of significant economic challenge.

While the Budget did include an array of announcements aimed at developing the built environment, the primary outcome was the implementation of fiscal measures that stand to impact businesses in the UK.  For example, the Government confirmed an increase of the National Living Wage to £12.21 per hour, the National Minimum Wage for 18-20 years to £10.00 an hour and the minimum wage for under 18s and Apprentices to £7.55 an hour.

Perhaps the most notable announcement was an increase in employers’ National Insurance contributions – aiming to raise significant income for investment.  The boost in Government revenue from employers NI contributions will be facilitated by both a 1.2% rise in the rate of contributions to 15% from April 2025 and a reduction in the Secondary Threshold where employers become liable to pay contributions for an employee from £9000 to £5000. However, it was also announced that the employment allowance would be increased to protect the smallest businesses from paying NI contributions.

In addition to taxation decisions that will impact industry, there were several investment measures announced targeted at constructing, re-building and maintaining the built environment across a range of construction sub-sectors. 

CIOB has welcomed the Government’s financial commitments to improve building safety and the quality of buildings through both the increased funding to accelerate the remediation of homes to remove unsafe cladding and increased budgets to improve the condition and safety of school buildings.

We also welcome investment into the Warm Homes Plan to accelerate retrofit and improvements in the energy efficiency of existing homes. However, we hope that further investment will be dedicated to retrofit during the rest of this parliament.

The Budget was not without its drawbacks for construction. To read our full reaction, including our concerns about the impact that increasing employers’ National Insurance contributions could have on SMEs in the construction industry please click here.