With planning consents at a 20-year low and major contractors continuing to collapse, the industry needs more than warm words from the chancellor. Richard Steer sets out what a serious Budget would actually look like
As we look ahead to the Budget later this month, the construction and built environment sector finds itself in a moment of both opportunity and jeopardy. A new government always brings with it the promise of fresh thinking, but the truth is that our industry cannot afford another cycle of warm words followed by slow delivery.
The challenges we face are structural, deep‑rooted and increasingly visible in the data. If ministers are serious about meeting their own ambitions, they must start by recognising that the built environment is not just another departmental responsibility; it’s the foundation on which every other social and economic priority rests.
To underline this imperative, every quarter my firm, Gleeds, conducts its own market research and I have to tell you, the current industry sentiment is not overly encouraging.
Ambition is not delivery, and the numbers tell a sobering story
Let’s take the government’s headline pledge of delivering 1.5 million homes over five years. It is, on paper, the kind of ambition the country needs. But ambition is not delivery, and the numbers tell a sobering story.
London is currently building only around one‑third of the homes it requires annually. The number of private housing schemes receiving planning consent is at a 20‑year low.
In the first quarter of 2026, just 1,220 sites secured permission – that’s down from 2,000 in the same period of 2022 and 3,000 in 2017. Nationally, 216,141 homes received planning permission in the 12 months to Q1 2026 – that’s only 58% of the consents needed to hit the government’s own annual target of 370,000 homes. These are not minor fluctuations, they are indicators of a system that is seizing up.
The consequences are already being felt in the collapse of several major contractors: Ardmore Construction, Torsion Construction, Buckingham Group, Henry Construction Projects as well as Michael J Lonsdale Group. These are not marginal firms. They are substantial employers delivering complex residential, commercial and regeneration projects.
Their failure sends shockwaves through supply chains, SMEs, specialist trades and local communities waiting for homes that never arrive. When contractors fall, the entire ecosystem feels the impact.
The forthcoming Budget must confront this reality with seriousness. The first step is to acknowledge that the planning system, in its current form, is not capable of supporting the government’s housing ambitions. Local planning authorities are under‑resourced, under‑staffed and overwhelmed. The result is paralysis, not progress.
What the industry needs is a multi‑year funding settlement which allows planning departments to recruit and retain experienced professionals, alongside a streamlined approach to Section 106 agreements so that a single, undeliverable element does not stall an entire scheme. Flexibility is not a concession but a prerequisite for delivery.
If the government wants contractors to invest in people, technology and modern methods of construction, it has to provide a clear, predictable pipeline of public sector work
Equally urgent is the need to stabilise the contracting base. Rising input costs, labour shortages, regulatory uncertainty and wafer‑thin margins have created an environment where even well‑run firms are vulnerable.
John Healey’s first Budget should introduce a “construction resilience fund” to support viable contractors facing short‑term liquidity pressures, coupled with procurement reform which moves away from lowest‑price tendering and towards value‑based selection. If the government wants contractors to invest in people, technology and modern methods of construction, it has to provide a clear, predictable pipeline of public sector work. Uncertainty is the enemy of investment, after all.
Beyond new homes, the Budget must finally recognise retrofit as a national infrastructure priority. Around half of all UK homes require retrofitting simply to reach basic modern energy efficiency standards, and up to 90% will need significant upgrades to meet net‑zero requirements. Yet retrofit remains fragmented, under‑funded and poorly coordinated.
A long‑term, ring‑fenced retrofit programme – guaranteed over at least a decade – would give homeowners, landlords and SMEs the confidence to plan and invest. Grants, low‑interest loans and tax incentives should form part of a coherent national strategy rather than a patchwork of short‑term schemes.
None of this will be possible without a workforce strategy which matches the scale of the challenge. The construction sector faces acute labour shortages at every level, from bricklayers and roofers to planners, surveyors and engineers. Meanwhile, hundreds of thousands of young people are outside education, employment or training. The mismatch is as frustrating as it is illogical.
The Budget must expand construction apprenticeships, tie training places to public sector projects, and invest in FE colleges so that provision reflects the needs of modern construction including digital skills, MMC and retrofit. And, while domestic training is essential, a sensible, skills‑based immigration policy is equally important. Certain specialist roles cannot be filled domestically in the short term, and pretending otherwise only slows delivery.
Finally, the government must address the performance of the Building Safety Regulator. I know this is not directly within the purview of the chancellor but, if he is serious about growth, he must recall that we represent 6% of GDP and Healey needs to appreciate that the Treasury cannot work in isolation.
A full review of the regulator’s performance metrics, coupled with clearer guidance for duty‑holders and investment in regulatory capacity, would help to restore confidence without compromising safety.
The built environment is not asking for special treatment. It is asking for a Budget which recognises the reality that, without a functioning construction sector, the government cannot deliver its housing targets, its net‑zero commitments or its economic growth ambitions. This month’s Budget is an opportunity to reset the relationship between government and industry, to replace rhetoric with action, and to acknowledge that construction is not a peripheral concern but a central pillar of national prosperity.
Whether the government chooses to seize that opportunity remains to be seen. But the stakes – for contractors, consultants, architects and the communities they serve – could not be higher.
Richard Steer is chair of Gleeds Worldwide and a Building The Future Think Tank commissioner
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