The CPA Responds to the Chancellor's Spring 2024 Budget

The CPA's Economic Director Noble Francis provides an initial response to the Chancellor's Spring 2024 Budget announced in the House of Commons. 

It was a Budget clearly focused on households, which is unsurprising given that it is the last Budget before a General Election. As expected, Budget 2024 had very little for the housing market and house building despite the sharp fall in demand. Private house building in December 2023 was already 25% lower than in October 2022, just after the Government’s Mini Budget that led to the initial spike in interest and mortgage rates. Furthermore, house building is likely to decline further this year based on the sharp falls in housing new orders and house building starts in 2023 H2.
There was also very little in Budget 2024 for infrastructure with the majority of announcements in the document focusing on re-announcements of policies from last year based around Network North and trying to improve planning. Budget 2024 did say that “The government continues to invest in infrastructure and will deliver over £600 billion of planned public sector investment over the next five years” but the reality down on the ground is that infrastructure output in December 2023 was 15% lower than a year earlier. Budget 2024 said that it would establish a ministerial taskforce to try and progress the stalled Euston station part of HS2, which makes sense as there has been no sign of any progress on the HS2 Euston station redevelopment since government announced it would be paused. Government did give the green light to the next section of East West Rail but even still we would only expect the services from this between Oxford to Bedford to start operating at the end of the decade at the earliest, so this is unlikely to boost activity significantly in the rail sector near-term.
Amongst the few bright spots for construction product manufacturers; we agree with Make UK that the extension of full expensing to leased assets will benefit smaller companies in particular, and we urge draft legislation to be brought forward as soon as possible so that this measure can be made permanent. Secondly, we note the Chancellor’s ambition to find productivity gains across public services and, given that government is the largest UK construction client, significant gains could be realised with the implementation of existing proposals such as the Construction Playbook, which sets out key policies and guidance for how public projects and programmes are assessed, procured and delivered