Spring statement 2025: A balancing act for the built Environment sector

Chancellor Rachel Reeves’ 2025 Spring Statement on March 26th built on the foundations laid in her Autumn budget, focusing on housing, infrastructure, and sustainability. While the ambitions are clear, these targets will remain out of reach unless the built environment sector receives relief from the financial pressures weighing it down.

The £3.4 billion levy on new homes, designed to fund building safety remediation after Grenfell, raises serious concerns. While the intention is clear, this levy will hit developers hard—especially SMEs who are already struggling with rising material costs and regulatory pressures. If mishandled, this levy could delay projects, halt developments, or leave sites abandoned, worsening the housing shortage.

The government’s 10-year infrastructure strategy that includes funding for long-term sustainability projects is welcomed, but there’s cautious optimism in the air about how this money will be used. Without clear action and robust plans, this could be just another announcement that fails to deliver results on the ground.

The built environment sector is one of the largest employers, though the rise in National Insurance Contributions (NICs) to 15% is set to place further strain on our sector which needs to attract just under 251,500 workers by 2028 to maintain its current state – not to mention delivering long-term government ambitions.

Main contractors, subcontractors and material suppliers will feel the pinch of these increased costs, which could stifle the appetite to recruit and undermine the government’s “Get Britain Building” initiative through industry-invested skills hubs.

Labour’s election pledges aimed at housing reform and supporting construction growth are now facing the reality of new taxes and rising costs. For the sector to thrive, the government must balance spending pressures with real support, understanding and investment in the built environment. The sector’s future depends on the government’s ability to deliver on its promises—only then can we tackle housing shortages, meet government targets and build a sustainable future.