Burnham’s vision puts construction centre stage, but can it create the right conditions for growth?

Speaking at Manchester’s People’s History Museum this week, Andy Burnham formally launched his Labour leadership campaign. In reality, with no other candidate having come forward, the speech also served as the first substantial indication of how a Burnham government might seek to govern. Given the prominence of housing, regeneration and infrastructure in the vision he set out for economic growth, BCIS chief economist Dr David Crosthwaite explores the Burnham’s potential impact on the sector.

Drawing on his decade as Mayor of Greater Manchester, Burnham argued that devolving power from Whitehall would unlock economic growth by allowing places to shape their own futures. For construction, seeing the industry positioned so clearly as an engine of economic renewal is encouraging. But the speech also raises an important question: with such a strong emphasis on how decisions are made, and much less on the conditions that influence investment decisions, is Burnham’s vision enough to affect construction activity levels?

Perhaps the clearest proposal for construction was a commitment to the biggest council house building programme since the post-war period. The current government is already committed to delivering 1.5 million new homes during this Parliament, yet the estimated 392,400 net additional homes that have been delivered since Parliament opened in July 2024 represent roughly two-thirds of the pace required. Closing the gap would require the sector to deliver around 361,000 homes a year for the remainder of the Parliament, well above anything achieved in modern times.

The figures demonstrate that ambitious housing targets are only part of the picture. New homes cannot simply be willed into existence. Achieving them depends on the economic and market conditions that allow projects to move from policy into construction. Recent increases in housing starts in England are encouraging, but they partly reflect previously delayed schemes progressing following Building Safety Regulator reforms rather than a broad-based acceleration in underlying housing delivery. Completions, meanwhile, remain at their lowest annual level since 2015-16.

Burnham’s proposals focused primarily on governance. Greater devolution, stronger local government, regional industrial strategies and place-based investment all have the potential to improve how projects are identified, prioritised and delivered. Better-resourced local authorities may also be able to bring forward regeneration more effectively. Those changes could improve the environment in which investment decisions are made, but they do not automatically translate into construction activity.

The timing is also important. Construction’s role in this debate is from a position of subdued demand, an environment in which the policies that shape confidence can be every bit as important as the projects themselves.

For construction, conditions for growth are well understood. Projects need to be commercially viable. Developers require confidence that demand will support investment. Public sector clients need certainty over long-term funding. The supply chain in turn needs confidence that inflationary pressures can be managed throughout a project. Those conditions are influenced by government policy, but they are not created by governance reform alone.

While Burnham spoke at length about housing, regeneration and infrastructure, there was little acknowledgement of the cost pressures currently facing businesses across the economy. In construction, labour costs remain the long-term primary driver of project costs, while employer National Insurance increases have added to the burden across the supply chain. Financing conditions also remain more challenging than many in the industry had expected at the start of this Parliament, and the lower borrowing costs expected to support a stronger housing recovery have yet to materialise.

Further, Burnham faces a particular political challenge; seeking to present a distinct vision for government while remaining consistent with Labour’s 2024 manifesto. For construction, many of the headline ambitions, including housing delivery, devolution and regional growth, are already established policy objectives. The more significant question is what would he change in practice to accelerate delivery.

The construction industry does not lack ambition. It has responded to successive housing targets, regeneration programmes and infrastructure commitments from governments of different political persuasions. The challenge has always been creating the economic and market conditions that allow those ambitions to become viable projects. Burnham has set out an ambitious vision that will place construction centre stage. The test now is whether that vision can create the conditions for growth that allow the sector to deliver it.

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Further reading

Burnham launches Labour leadership campaign with housing on the agenda