George, the builder

Chancellor George Osborne’s refrain “We are the builders” is fast becoming a mainstay of his set piece spending announcements. But this week, this slightly odd choice of catchphrase finally seemed much more justified than in the past.

At the same time as the chancellor announced £21.5bn of departmental budget cuts over the duration of the parliament, he announced that capital spending - much of which goes on construction work - would rise 27%, from £43.7bn in 2015-16 to £55.7bn in 2020-21. This rise is set to include significant increases each year; which will be welcomed by those nervous about the stability of the sector’s recovery.

Within the overall figures there were also a plethora of positive headlines for the sector. The chancellor’s commitment of £100bn to infrastructure was well trailed, but the clarity given over spending on individual programmes including roads and HS2 will support the industry’s continued desire for greater visibility on workloads in the sector. The amount of detail the chancellor appears willing to get into on infrastructure is an encouraging sign - one of the biggest cheers in the House from the Tory benches was, bizarrely, a response to his confirmation of a dedicated fund to mend potholes.

One of the biggest cheers in the House from the Tory benches was, bizarrely, a response to his confirmation of a dedicated fund to mend potholes

Meanwhile, news that the education capital spending budget will rise from the previously promised £21bn to £23bn logically should secure the future of the second wave of the Priority School Building Programme, which had been delayed while the Spending Review was finalised.

On top of that, a raft of announcements on housing, including Osborne’s headline claim that the government will double spend on housing to more than £2bn a year from 2018, went beyond many commentators’ expectations for support for the sector. Even so, housebuilders wait to see the detail of the further planning reforms promised, which although less eye-catching will be of greater long-term importance to the sector.

The picture for the affordable rented sector is more complex, with the government capping the amount of housing benefit that can be spent on social rent. But even here, the fact that the chancellor seems to have steered clear of previously mooted moves to cut the rent social landlords can charge, and enabling tenants instead to top up the housing benefit receipts from other income, will ease fears over the amount of income that the sector will be able to receive and then borrow against to re-invest. It still, however, leaves a troubling question over whether this will make rental properties harder to secure for the poorest tenants.

Unsurprisingly, there does remain significant cause for concern from the industry in respect of retrofit and renewable energy programmes. The government’s “reform” of the renewable heat incentive, openly aimed at cutting its costs and trailed on building.co.uk earlier in the week, will be seen as a further backwards step in reducing the carbon impact of the built environment (at least, though, it has not been axed entirely). Likewise, the industry will remain sceptical about the government’s replacement for the scrapped ECO scheme until further detail emerges.

Osborne’s references to climate change and its impacts remain far more muted, in both rhetoric and policy, than his increasingly bombastic self-identification as a builder. But given Osborne’s austerity drive, and compared to where many industries reliant on public spending find themselves this week, construction can feel like it’s come off with a pretty good deal.

Sarah Richardson, editor