Chancellor outlines spending plans

In one of the most consequential Budgets in recent history, and the first from a Labour chancellor in 14 years, Rachel Reeves stated 鈥淲e will restore stability to our country again鈥� as she pledged to stabilise the UK鈥檚 finances while also rebuilding public services.

While much of the focus of the wider media will be on the 拢40bn of tax rises, including a rise in National Insurance contributions for employers, Reeves also announced changes to fiscal rules to enable 拢100bn to be spent on capital projects over the next five years.

鈥淭oday鈥檚 budget marks an end to short-termism鈥�, she said. Here is a summary of the key measures for the built environment.

Key measures

Transport

  • HS2 trains will run to Euston, with funding provided for tunnelling to the central London terminus, catalysing private investment into the station and local area.
  •  Pledge to deliver 鈥減riority transport schemes鈥�, including the TransPennine route upgrade between York and Manchester via Leeds and Huddersfield and East West Rail
  • Progressing HS2 Phase One to improve connectivity between London and Birmingham, and increasing capacity on the West Coast Mainline
  • Providing a nearly 50% increase, on 2024-25, in funding for local roads maintenance. This will go further than the government鈥檚 commitment to fix an additional one million potholes across England each year, investing almost 拢1.6bn to maintain and renew the nation鈥檚 roads, an increase of 拢500 on 20m24-25.
  • A 50% increase in funding for local roads maintenance to 拢1.6bn

Schools

  • 拢6.7bn of capital investment for the Department for Education next year, a 19% real-terms increase on this year. 

  • 拢1.4bn to help rebuild over 500 schools, epresents a 拢550m boost to the School Rebuilding Programme from last year.

Hospitals

  • 拢3.1bn increase to capital budget, including more than 拢1bn to tackle rreinforced autoclaved aerated concrete (RAAC) and the backlog of maintenance, repairs and upgrades across the NHS estate
  • A dedicated fund will be established to upgrades to 200 GP surgeries across England
  • Pledge to move swiftly to rebuild hospitals built with RAAC
  • New Hospitals Programme review to be published in the new year

Energy 

  • Leveraging 拢8bn of private investment in Carbon Capture, Usage and Storage infrastructure, continuing funding for the development of Sizewell C, and providing funding to kickstart Great British Energy.
  • Providing 拢3.9bn of funding in 2025-26 for Carbon Capture, Usage and Storage Track-1 projects to decarbonise industry
  • 拢2.7bn of funding to continue Sizewell C鈥檚 development through 2025-26. 

Housing

  • 拢3bn of additional support for SMEs and the Build to Rent sector, in the form of housing guarantee schemes.
  • Increase to the stamp duty land tax surcharge on second homes by two percentage points to 5%. Reeves says this will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.
  • As announced at the weekend 鈥� a 拢500m 鈥榯op-up鈥� to the Affordable Homes Programme to build up to 5,000 additional affordable homes.
  • A consultation on a new long-term social housing rent settlement of CPI+1% for 5 years
  • Investment in remediation will rise to over 拢1bn in 2025-26. This includes new investment to speed up remediation of social housing. The government will set out further steps on remediation later this autumn.
  • Reducing discounts on the Right to Buy scheme and enabling councils in England to keep all the receipts generated by sales.
  • Additional 拢1bn from next year to extend the household support fund and discretionary housing payments 鈥渢o help those facing financial hardship鈥�.
  • An initial 拢3.4m to 鈥榢ick-start鈥� the government鈥檚 Warm Homes Plan to decarbonise homes. This includes 拢1.8 billion to support fuel poverty schemes, helping over 225,000 households reduce their energy bills by over 拢200.
  • 拢46m of additional funding to support recruitment and training of 300 graduates and apprentices into local planning authorities, accelerate large sites that are stuck in the system, and boost and upskill local planning authority capacity
  • 拢56m to unlock 2,000 homes at Liverpool Central Docks.
  • 拢25m in a joint venture to deliver 3,000 energy-efficient homes across the country, 100% of which are targeted for affordbale tenures.
  • 拢47m to support the deliver of 28,000 homes stalled due to nutrient neutrality rules.
  • Pledge to increase funding for the Boiler Upgrade Scheme in England and Wales this year and next, following the high demand for the scheme. The government is also providing funding to grow the heat pump manufacturing supply chains in the UK to support the plan.

Tax

  • Increase in employer鈥檚 NI contributions by 1.2 percentage points to 15% from April 2025. Reduce secondary threshold from 拢9,100 a year to 拢5,000. Will raise 拢25bn per year.
  • Capital gains tax lower rate increased from 10 to 18%, higher rate from 20% to 24%. Gains tax on residential property maintained at 18% and 24%
  • 40% relief on business rates for the retail, hospital and leisure industry up to a cap of 拢110,000 per business.
  • Corporation tax rate of 25% will be kept for the duration of the parliament. 

 

 

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