2026 Spring Statement Reaction: Proof That Construction Needs Delivery, Not Noise

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16 March 2026

Dr David Crosthwaite, Chief Economist at the Building Cost Information Service (BCIS), provides commentary and reaction following the Spring Statement.

One of the key lessons from last year’s Autumn Budget was the paralysing effect fiscal uncertainty can have on client and funder decision-making. In a 24-hour news environment, prolonged speculation about tax and spending policies can quickly sap confidence in project viability, even before the Chancellor reaches the dispatch box.

In that sense, the 2026 Spring Statement was notable for what it did not generate. The government largely avoided the prolonged speculation that surrounded last year’s fiscal events, which was a welcome change. Construction investment decisions are highly sensitive to economic sentiment, and reducing unnecessary policy noise helps provide a more stable backdrop for clients and funders.

In reality, geopolitical developments had already shifted the wider economic conversation before Rachel Reeves stood up to deliver the Spring Statement. Events involving the United States and Iran have served as a reminder of how quickly external shocks can reshape market conditions.

That uncertainty complicates the economic outlook. Expectations that inflation will continue to fall, financing conditions will ease and demand will recover become harder to rely on when global energy markets are volatile. If oil prices move sharply or remain unpredictable, the path for interest rates, borrowing costs and wider investment decisions becomes far less certain.

Against that backdrop, the government’s focus should now move firmly from fiscal events to policy delivery.

Making The Infrastructure Pipeline Meaningful

One of the most important tools the government has to provide clarity is the infrastructure pipeline. The recent publication of the updated National Infrastructure and Service Transformation Authority (NISTA) pipeline is therefore a welcome step.

However, its value will ultimately depend on the level of detail it provides. Regular updates will also be essential. The first update, which landed on 9 March, had originally been promised by January 2026.

Construction businesses make long-term decisions about skills, technology and capacity. That planning becomes far more difficult when visibility of the future project pipeline is limited or updated too slowly.

Clarity on private finance

Alongside the pipeline itself, the government’s private finance strategy remains an important piece of the puzzle.

The inclusion of potential funding models such as the regulated asset base (RAB) in the pipeline is a helpful signal of how private capital may support delivery of the UK’s infrastructure ambitions.

However, the government has yet to provide more detail on its approach to public-private partnerships (PPPs). Its 10-year infrastructure strategy committed to exploring PPPs for projects with revenue streams where risk transfer and value for money can be achieved, including schemes to decarbonise the public sector estate.

The new model is being developed by NISTA, but ministers have indicated there are currently no plans to publish the business case. This appears a missed opportunity to shape the narrative around PPPs and set expectations ahead of rollout. Hopefully more detail will emerge once the model’s design is finalised this year.

Rethinking housing demand

Housing policy also deserves renewed attention. Recent data show that housebuilding activity has been subdued, reflecting ongoing affordability pressures and challenging financing conditions.

Supply targets alone will not be sufficient if the demand side of the market remains constrained. Housebuilders cannot deliver new homes at scale if buyers struggle to access finance or afford deposits.

Recent geopolitical developments have added further uncertainty. Higher energy and commodity prices risk sustaining inflationary pressures, potentially delaying interest rate cuts and keeping borrowing costs elevated. That would make it even harder for housing demand to recover.

The effectiveness of the government’s housing strategy therefore becomes increasingly important. Measures that support first-time buyers and improve access to finance may prove just as important as planning reforms when it comes to sustaining housebuilding activity.

 

Picture: An image of Dr David Crosthwaite, chief economist at the Building Cost Information Service.

Article written by Dr David Crosthwaite | Published 16 March 2026

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