Chancellor’s ironclad fiscal rules are protecting construction – for now

By Simon Rawlinson2025-03-31T08:52:00

The government is stuck in a spending straitjacket of its own making. However, borrowing for investment will help to sustain future workload for construction, writes Simon Rawlinson of Arcadis

You know a government needs a good news story when it announces a boost in pothole spending. Labour’s latest salvo, a cool £1.6bn, has been accompanied by both an extra carrot and a stick – with £500m being allocated to councils depending on results.

Overall, capital spending is expected to total around £130bn next year, so the pothole allocation is a significant sum, and a welcome boost to hard-pressed highways contractors. But, in the context of an economy worth £2.8 trillion, it’s an exceedingly small lever.

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