The Autumn Statement and Spending Review has set out how £4 trillion of government money will be allocated over the next five years. The investment will give a boost to construction but there are concerns about skills shortages. On average, departmental spending will fall at less than half the rate of the previous five years.

Chancellor George Osborne has said the govenment will double the public housing budget to £2bn a year. The government will introduce a number of policies to help people on to the housing ladder. The government also confirmed their aim to deliver 400,000 affordable homes this parliament.

At the Summer Budget it was announced that three million new apprenticeships will be created by 2020, funded by a levy on large employers. An apprenticeship levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3 million. Less than 2% of UK employers will pay the levy but how this will impact on the CITB is not clear.

Dr Diana Montgomery, chief executive of the Construction Products Association, said:  “Some in our industry will be pleased to hear the Chancellor clarify its ambitions for the Apprenticeship Levy. Today we learned that it will be paid on payrolls in excess of £3 million.  The Chancellor suggests that this means less than two percent of UK employers will pay it; however, we estimate the Levy may affect manufacturers with as few as 100 employees.   We appreciate the establishment of a new employer-led body to set apprenticeship standards and ensure quality, not quantity.  This body needs to include manufacturers and distribution representatives of the construction supply chain.  The critical focus must be on a ‘light-touch’ approach that delivers the right skills.”

Steve Perkins, director of urban development at Turner & Townsend, said: “As demand from developers increases, the shortage of skilled workers is likely to drive up construction costs, and stretch planning authorities – already pared back by local government austerity – to the limit.”

Jeremy Blackburn, Head of Policy, RICS said: “Today the Chancellor argued that ‘We Are the Builders’. However, the construction skills shortage is now at the highest levels seen in the past 20 years. During the recession an estimated 400,000 people left construction – one of the highest rates of redundancy across any sector, but worse is yet to come as we are expecting a ‘knowledge cliff’ when those left in the workforce eventually retire. There are serious questions around how we continue to build to meet the 400,000 new houses announced today with the infrastructure that will get Britain moving.”

Melanie Leech, chief executive of the British Property Federation, said: “Government must understand that new homes must be built in locations with good transport links, social infrastructure such as hospitals and schools, and leisure and employment facilities. Noone wants to live in a new house built in the middle of nowhere, with no shops, jobs or community facilities nearby. Great places are also those which have a variety of housing types to suit different demographics, and the Build to Rent sector must not be pushed aside in blind pursuit of making us a nation of homeowners.”