Opinion: Spending squeeze starts today

Aaron Morby 14 years ago
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The new coalition Government has hit the ground running.

After a few days in office, the construction industry can be in no doubt about what the future holds.

First the ambitious airport expansion plans for the south east were grounded.

Today it has emerged that all Building Schools for the Future projects not yet at preferred bidder stage are frozen in their tracks, pending the education and spending review.

More worrying still, the long-awaited Procure 21+ framework, which had contractors on tenterhooks awaiting an announcement, has also fallen victim to the new austerity.

This is decisive, tough action. It is also a rude jolt into a worst case scenario for construction.

The new realism starts today, and with it any notion that construction can play a stalling game.

It is only a matter of time before spending on roads joins the list of casualties.

The spending review freezes will send a shiver down the spine of all those rehearsing the argument that some capital spending is sacrosanct.

The industry has done an excellent job of selling the message that £1 invested in construction delivers £2.84 in benefits. But the brutal truth is that the country’s coffers are empty.

Intensive lobbying may prompt the Government to dig around in its pockets with a well-intentioned smile, but there is not going to be a hand-out for construction.

Working practices are also set for a revolution. We are at the beginning of a huge overhaul in procurement thinking.

The rules are going to be rewritten and the industry needs to be on board with ideas about how to deliver in a different and efficient way.

There is a clear  message coming from Government about future capital spending. Simply, if it’s going to get seen, it needs to be green.

The industry must not batten down the hatches. It is still critical to lobby Government, not just for more money but to ensure the private sector is given the freedom and right environment to invest.

David Cameron’s hasty decision to jettison Heathrow’s third runway is disastrous. Failing to invest in the UK as a world air hub will have serious consequences and speaks more about local voter pressure than it does about doing what is right for the country.

Reforms promoted during the election by housing ministers Grant Shapps are also a nightmare for the industry.

His spirit of localism may be laudable but surely handing more planning power to local communities stands to sink the housing recovery in a wave of NIMBYism.

Housing is no longer a local issue, it is a national crisis. The country faces a one million shortfall in homes today.

The new Government must tackle this head on by doing everything in its power to sweep away the barriers to building housing, both private and affordable.

Ultimately though, the future of one project will say more about the way things are going to go over the next five years.

Both sides of the new coalition are convinced that rail is green, and the route to a sustainable future. Let’s hope the Crossrail project is viewed in such a favourable light. If not , then we must all brace ourselves  for a very bumpy ride.

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