Opinion: Spending squeeze starts today

Aaron Morby 14 years ago

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.

Latest news

McLaren gets green light for 45-storey Leeds tower

Landmark Wellington Square scheme will see 464 flats built with 360,000 sq ft of offices
3 days ago

Heavy rain causes 1.9% construction output fall

Hopes remain undampened of a resi-led recovery this summer
3 days ago

Taziker restruture to return to profitability after £1.2m loss

Founders bought the business back from private equity after last year's loss
3 days ago

£220m London wharf homes scheme approved

285 homes to be built beside protected Albert and Swedish Wharves in Wandsworth
3 days ago

Major project veteran named civils director for Sizewell C

David Speight previously worked on Hinkley, Heathrow and HS2 client teams
3 days ago

Morgan Sindall lands £19m Milton Keynes hospital job

Crane lifts to be carefully co-ordinated to ensure air ambulance remains active
3 days ago

Clancy bolsters civils leadership team

Daniel Tonkin and Simon Hyams join as operation directors of water and infrastructure
4 days ago

Balfour names new project boss for HS2’s super-hub station

Steve O’Sullivan replaces Nigel Russell who was promoted to CEO of Balfour's HS2 ops
4 days ago

Buckingham Group supply chain hit doubles to £256m

Total owed to unsecured creditors soars as surety providers finalise claims
4 days ago

Builders demand an end to police plant bans

Call to suspend all embargoes on moving mobile cranes and large site kit
4 days ago

Green light for £65m Blackpool multiversity campus

Education campus of 350,000 sq ft will be delivered in phases
4 days ago

Vinci signs £138m Sheffield steel forge expansion deal

Sheffield Forgemasters signs landmark contract after two years of pre-construction works
4 days ago

McAlpine hires HS2 programme boss to head defence arm

Armed forces logistics expert Mike Hickson takes role as MD of defence
4 days ago

£200m carbon capture plan for Deeside site

Energy from waste operator enfinium looking to invest in North Wales plant
4 days ago

McAleer & Rushe promotes five staff to contracts directors

Design and build contractor targets £500m revenue next year
4 days ago

Consultant quartet win Government estate upgrade deal

Government Property Agency selects Arcadis, Tetra Tech, AtkinsRéalis and McBains
5 days ago

Resi towers pioneer to transform Liverpool site

Beetham founder Hugh Frost to help develop 1,200 new homes
5 days ago

Construction Manager of the Year crowned

Galliford Try's Barry Kingscote wins coveted prize: Full list of winners
5 days ago

Landsec £250m London terraced office job approved

Skanska tipped for 20-storey Hill House scheme near Fleet Street
5 days ago

Lendlease tops March contracts league

BAM and ISG rank third with big contract wins
5 days ago

Vistry strikes deal with Homes England for 1,000 units

Firm's timber frames factory will supply most of the Midlands houses
5 days ago

Morgan Sindall go-ahead to build 23-storey Salford resi job

Funding deal with CBRE allows latest project on bank of River Irwell to proceed
5 days ago

Unite Students gains planning for London and Bristol schemes

RG Group will build landmark Stratford tower and Freestone Island projects
5 days ago

Rolls-Royce gets go-ahead for 1.1m sq ft expansion in Derby

Major expansion of Raynesway campus planned to met submarine fleet orders
6 days ago

GMI Construction edges back into profit

A year of controlled consolidation helped generate £0.9m profit but cash at bank dropped to £10m
6 days ago

Balfour gets final sign-off for HMP Highland at £209m

Deal struck for delayed Inverness prison after costs rocket
6 days ago

Renew buys bridge maintenance business

Contractor boosts highways division with £5m acquisition
6 days ago

HS2 tests market for £150m mass transit job

2.4km long elevated Automated People Mover to go out to tender in 2026
6 days ago

Cardo completes fourth acquisition in a year

Expanding Welsh building maintenance specialist reaches £170m turnover
6 days ago

Watchdog clears Heidelberg takeover of Mick George

Four quarries and five ready-mix operations to be sold to meet competition concerns
7 days ago

Contractor services