‘Step in the right direction’: Construction reacts to the King’s Speech

The construction industry has broadly welcomed today’s King’s Speech but warned of the challenges facing the new Labour government in key policy areas including planning reform.

King Charles read out Labour’s legislative priorities in Parliament this morning with proposals to shake up planning rules for housing and infrastructure among 35 new draft bills set to be put before MPs. 

The bills are intended to support the party’s manifesto targets to build 1.5 million homes within the next five years and to decarbonise the grid by 2030.

Tina Paillet, president of Royal Institution of Chartered Surveyors, welcomed the focus on planning reforms but warned the government will be unable to achieve its ambitions unless the right skills are available.

While she described the speech as a “step in the right direction” for Labour, she said that actions aiming to stimulate economic growth must be “linked” and identify gaps in the workforce.

“Policymakers must address the skills shortage and support industry work in solving this issue, otherwise the UK will be unable to deliver on its 1.5 million homes over the next five years target and £805 billion infrastructure pipeline,” Paillet said.

Simon Peacock, head of regions at JLL, said planning reforms would be “crucial” to addressing wealth and income inequalities but warned “true reform is never easy”.

“Plans for a new council of the nations and regions and to make a success of the much-mooted industrial strategy will depend on a watertight masterplan for the planning system,” he warned.

“This will need to set out commitments to investing in the number, and quality, of planners to support decision making, developing a stricter rules-based approach for applications and clear alignment on the priorities for land use.”

Tim Balcon, chief executive of the Construction Industry Training Board, welcomed Labour’s commitment to housebuilding but said the key to achieving its targets for new homes was to get the right skills policies in place.

“It is essential that the new Growth and Skills Levy drive up construction apprenticeship numbers that have declined under the Apprenticeship Levy,” he said.

“We simply do not have enough workers in the construction industry right now – in 2023 there was a net loss of 10,000 construction workers. Our research shows that under Labour’s housebuilding plans, up to an additional 152,000 workers will need to be found.”

James Corrigan, managing director for infrastructure at Turner & Townsend UK, welcomed the focus on infrastructure delivery and the ambition to “go faster and do more” but echoed Balcon and Paillet’s concerns around skills.

“Persistent skills shortages threaten to derail this ambitious programme if they are not tackled head on,” he said.

“The speech points to the reorganisation of the Institute for Apprenticeships and Technical Education, and the creation of a new Skills England body to assess national and local skills needs.  

“The sooner the better, as overall capacity in construction and infrastructure must be built up quickly and planned strategically if the UK is to deliver at the scale and speed that the government would like without encountering bottlenecks and significant cost pressures.”

Corrigan’s colleague Alan Sinclair,  head of energy and natural resources, added that the speech provided a welcome consistency of policy on clean energy ambitions.

“The industry will be cheered as much as by what isn’t changing in this King’s Speech as what is,” he said. “Charting the UK’s transition to clean, secure, energy relies on confidence and consistency in policy.”

He said the challenge for prime minister Keir Starmer would be to integrate plans for a new state-owned energy company called Great British Energy into existing planning on decarbonisation, warning this task had the potential to cause delays.

“Accelerating investment in renewable energy, such as new nuclear, solar and offshore wind, through the establishment of Great British Energy will be welcomed as a potential catalyst for the sector,” he said.

“However, the challenge will be to integrate this fresh thinking with the longstanding planning that has already taken place.  

“We urgently need to move from policy development to the practicalities of execution: securing supply chains, building skills and agreeing long-term pricing contracts with investors. 

“The greatest risk is that in re-strategising, we introduce delay and waste time that we do not have to meet rapidly approaching deadlines for decarbonisation.”

>> See also: New government sets out plans for housing and infrastructure in first King’s Speech

Meanwhile, UK Green Building Council chief executive Smith Mordak said the speech felt like a “seismic shift” towards green policy after “years of damaging drift”.

Mordak said: “Labour now needs to head-off a national bun-fight over green belts and new developments. 

“A neat solution already has momentum - legally wedding the planning system to both the Climate Change and Environmental Acts, so every planning decision pulls in the right direction. 

“This is backed, not just by the green NGOs, but much of the building industry, big banks and the House of Lords. Labour voted to link to the Climate Change Act in opposition, bringing it into law now could be the master stroke they need.”

Muyiwa Oki, president of the Riba, said the government had set out an “ambitious” agenda but now needed to act on it, highlighting the need for a national retrofit strategy.

“Delivering high-quality, sustainable buildings and places will be at the heart of growing the economy,” Oki said.

“So, commitments to overhaul the planning system and strengthen the capacity of local planning authorities through the proposed Planning and Infrastructure Bill are welcome.  

“Plans for Great British Energy to cut bills and tackle the rising cost of living are also encouraging, but they must be accompanied by measures to reduce energy use in our homes, through a National Retrofit Strategy.”

Simon Rawlinson, head of strategic research at Arcadis, added that the speech contained some “excellent practical measures” on skills and using land belonging to the Crown Estate to deliver green energy projects.

He also praised the planing and infrastructure bill, although he said the simplification measures it proposed “need to be very extensive to have an effect - the proposed consultation can’t come soon enough.”