A shift towards certainty: Why the Chancellor’s commitments are good for growth

Andy Dedman, Regional Managing Director, London and the South East

The recent announcement by Rachel Reeves, Chancellor of the Exchequer, that the UK government will support a third runway at Heathrow, is good news for the UK economy and construction industry.

Plans for Heathrow’s expansion could create over 100,000 direct jobs, boost a more connected British economy by billions and lead to cheaper, more reliable air travel. They exemplify the government’s 10 Year Infrastructure Strategy, which seeks to drive growth and productivity through providing stability and certainty in a long-term infrastructure plan.

Further notable projects on the government’s agenda include the £9 billion Lower Thames Crossing proposal, aimed at reducing congestion on the Dartford Crossing, and the East-West rail link between Oxford and Cambridge. This will actively support the growth of the Oxford-Cambridge Arc, an area which, in the Chancellor’s words, holds “huge economic potential for our nation’s growth prospects”.

Creating Certainty for Construction

The Chancellor’s commitments pave the way for economic growth and are good news for the construction industry. They will give confidence to private investors that specific schemes are priorities and will go ahead. This will underpin investment in associated projects, creating an economic halo effect extending far beyond London and the South East.

Clear plans also enable construction firms to invest in their own operations and embrace the opportunities that major projects bring. In the UK – and globally – the construction industry is facing huge skills shortages. While these projects will undoubtedly add to demand, greater certainty around their progress will enable contractors to hire and upskill their workforce with confidence.

Considerations for Our Clients

Multiple major schemes bring obvious benefits, but they also usher in challenges. They demand significant resources, both in terms of people and materials, and are susceptible to cost fluctuations caused by market and macroeconomic shifts (we explore this in more detail in our recent Global Cost Report). All this means that detailed planning and a thorough assessment of cost and risk are absolutely essential – both prior to work commencing and throughout projects.

Innovative approaches to securing talent and materials will need to be deployed, as will in-depth data modelling and scenario planning. This will be vital to provide resilience against foreseen and unforeseen shocks. Close consideration will also need to be given to environmental requirements, and how these may evolve over the project’s duration.

Flexibility and agility will be key to navigating changeable market conditions and keeping projects on track and delivered to standard within budget.

The Chancellor has also focused on development in Cambridge, a region where we’ve been active for almost 20 years. It is great to see the government plan to continue with the growth of housing as well as office and laboratory space. Alongside our work with the University of Cambridge, we are working with Railpen on their Botanic Place, Beehive, and Newmarket Road schemes in the city. These will support sustainable economic development and offer extensive life science, innovation park, commercial office, and retail space when completed.

With the government’s 10 Year Infrastructure Strategy now published, we have a long-term plan for the country’s social, economic, and housing infrastructure. We are looking forward to working closely with our clients and industry partners to support a flourishing modern economy, drive growth, and support on delivering more sustainable built environments for all.

Contact

If you’d like to discuss the government’s recent announcement and infrastructure strategy, please reach out to:

Andy Dedman
Managing Director, London and the South East
andy.dedman@curriebrown.com