Get Britain Building Immediately or Risk a ‘Perfect Storm’

The Chancellor has confirmed that the 2025 growth estimate for the UK has been, following calculation by the Office for Budget Responsibility (OBR), halved to1%.  This would suggest the short-term economic outlook is not as optimistic as hoped when the government came to power just over a year ago. Though interest rates are, albeit slowly, reducing, inflation remains stubbornly higher than the Bank of England’s target of 2%.

Those who can are choosing to save in the belief that there will be trouble ahead. Data from the Office for National Statistics (ONS), though showing some growth, largely driven by the public sector, combined with, according to the National Institute of Economic and Social Research (NIESR), a ‘black hole’ of some £50 billion, mean that tough decisions face Rachel Reeves; likely to be more spending cuts or tax increases in the Autumn budget.

Heightened business uncertainty as well the cost of energy (which remains high) are creating an environment in which new investment is being postponed. Job losses are regularly reported – especially in the beleaguered retail and hospitality sectors – and there’s a palpable fear that unemployment may rise steadily as AI replaces ‘white collar’ roles. This is in direct conflict with the government’s stated ambition to get more people, particularly NEETS (Not in Education, Employment or Training) into work.

Youth unemployment in parts of the West Midlands is more than double the national average, with over 26,000 young people aged 18-24 claiming unemployment-related benefits. Some pessimistic commentators contend that we could experience unemployment levels not experienced in this country for a generation which, in turn, will lead to a dramatic decrease in social order and community cohesion.

Labour, under Keir Starmer, came to power promising that would  repair the economy through investment in improving public services, funded by an increase in economic activity. The fact that latter is not happening will undermine the former. As Labour enters its second year in office, the rhetoric of blaming the inheritance provided by the previous Conservative administration appears to be wearing thin with the electorate and we believe urgent action is required to avert further tax increases in the Autumn Statement. One of the consequences of the UK being is a service-orientated economy, is that if people and businesses feel poorer due to inflation or are uncertain about the future, spending and investment decreases markedly.

So, what could the government do?

Construction is an industrial sector contributing 8% of gross domestic product (GDP) – approximately £228 billion – and employing over 2.15 million people in which investment can produce the sort of rapid returns this country urgently requires. In common with defence, it’s critical in an uncertain world we maintain and invest to ensure we create a built environment characterised by resilience and an innate ability to foster confidence and innovation by wealth creators. To achieve this objective, support is needed in all parts of the construction supply chain from product manufacture, through to professional services and delivery by contractors.

Given we remain in a housing crisis, increasing house building would stimulate growth by using UK manufactured building materials, employing skilled site workers and providing opportunities for other supporting services that are necessary to ‘Get Britain Building’. Whilst around 140,000 new houses were built last year in England, the current rate they’re being built, dictated by lack of sales, means the government’s manifesto commitment to achieve 1.5 million new homes by the end of current parliament will not be delivered.

The UK’s building products sector has a big footprint in the West Midlands and is vital to achieving the multiplier effect that housing delivery can deliver for the UK economy. It supports hundreds of thousands of jobs across the supply chain from raw materials to installation.  The industry is currently operating significantly below capacity with skilled workers either being laid off or seeking opportunities outside the industry and vital investment is on hold. This is a direct result of lack of housing demand.

Affordability for first time buyers has stalled the private sector.  In parallel, the public sector is in a dire financial state and faces the additional challenge of finding funds to retrofit the existing housing stock of accommodation. We welcome the Deputy Prime Minister’s announcement of a further £2 Billion for much needed social housing but we should recognise that more investment is essential to allow for social mobility and enable workers to gain access to decent houses close to where job opportunities are most plentiful. Planning reform will likely result in additional land becoming available as well as a shortening of the long period between successful planning applications and new housing appearing, but to achieve this we will need more planners and a cultural shift towards communities becoming more pro-development.

The Chancellor needs to engage in urgent intervention to support this sector by introducing a range of customer incentives that will encourage housebuilding. Such incentives should be based on radical and creative thinking to ensure large builders are aware of their responsibility in actively using local supply chains and providing access to occupational training, apprenticeships and degrees.  Moreover, targeted incentives and better training and access to jobs are also urgently needed to train the next generation of skilled workers to build the homes. other buildings and infrastructure to meet our future needs.

Critically, homes should be fit for purpose and designed to be meet future climate change challenges, including overheating, storms, high winds, flooding and wildfires. The West Midlands has seen a spike in wildfire incidents this August, reflecting a broader national trend. This will only get worse as our climate warms.

The time for discussion is over and action is overdue.

Delay only makes matters worse.

The West Midlands Combined Authority (WMCA) has secured a landmark devolved housing budget as part of its 2025/26 fiscal settlement, marking a major shift in regional control over housing and regeneration priorities.  This includes £67.7 million for new social and affordable housing and £37.8 million for energy-efficient home upgrades. We should fully capitalise on this by doing things differently rather than slavishly following the national guidance that has clearly failed.

The West Midlands can lead the way by accelerating new development and the modernisation of existing stock and by bringing forward the plan to invest £1 billion in delivering 3,500 energy-efficient homes in Druids Heath.

By ‘Getting Britain Building’ now, the UK can avoid the perfect economic storm that’s already making itself felt and will, if unchecked, result in even greater misery, inequality and social divisions among communities who increasingly feel ‘left behind’.

This is a personal blog post.  Any opinions, findings, and conclusion or recommendations expressed in this article are those of the authors and do not necessarily reflect the view of the Centre for the New Midlands or any of our associated organisations/individuals.

ABOUT OUR AUTHORS:

Mike Leonard is CEO of Building Alliance CIC and also a Visiting Professor at Birmingham City University.

Mike is currently driving many initiatives to achieve our climate change objectives, whilst ensuring resilience in the built environment. A strong believer in the power of collaboration he has built an extensive industry and academic network, identifying, and acting on common goals.

He is the founder of the Futures Group, the UK cross-industry, and highly influential new homes “think tank”. Mike is currently involved in research aimed at improving the quality in building. This includes Future Homes Standard Demonstrators, preventing overheating, enhancing indoor air quality, addressing the fire risk, reducing the use of single life plastics, decarbonising the built environment, and embracing the skills gap.

Dr Steve McCabe has been an academic since 1987, when he began teaching economics. His academic career was marked by a variety of responsibilities, such as serving as the Associate Professor and director of research degrees in business at Birmingham City University, UK, which involved the supervision of all doctoral programs, including the Doctor of Business Administration(DBA). Additionally, he was a key member of the initial initiative to establish online doctoral programs, such as the DBA program for Liverpool Laureate, UK, where he served as one of the academic tutors and provided in-person support to students during their residencies.

Professor Dr. Steven McCabe is an enthusiastic supporter of Participatory Action Research for unlocking organisations’ potential. However, his true essence is transdisciplinarity, with a focus on a Human-centric Approach to Organisational Improvement. He integrates various fields such as Strategic Management, Quality Management, Business Improvement, People Skills, and Supply Chain Management to address organisational problems and challenges.

Professor Dr. Steven McCabe is an avid observer and commentator on a variety of government policies, including those related to manufacturing, construction, business, and sustainability. He frequently publishes or provides commentary for national and regional media outlets, such as the BBC, the Birmingham Post, The Huffington Post, or theconversation.