Opinion: Construction Plan B must focus on banks

Aaron Morby 13 years ago
Share

The contraction of the economy in the last three months of 2010 has set warning lights flashing.

Urgent action is needed to stimulate growth and jobs but now is no time to start calling for a U-turn on spending cuts.

The Government is not about to, nor should it, throw its fiscal plans out of the window on the basis of the latest national output figures.

The new GDP figures are provisional estimates and were undoubtedly affected by bad weather.

But they have highlighted the pivotal role construction plays in the fortunes of the wider economy. So a 3.3% contraction in construction output, even if it is a provisional estimate, has too be taken seriously.

With the economy flat-lining, and inflation and unemployment rising, more needs to be done about growth, and properly stimulating construction has to be part of that solution.

The fact is construction is careering headlong into recession and taking the wider economy with it. Calls to relax spending cuts and return to where we were under the last Government have to be ignored.

The private sector is the key to the future. But it is faltering, not because there is no will to invest, but because there is no money available.

The last few months have seen a welter of plans advanced to build towering offices in London. They are not being financed by UK banks, the investment is coming from overseas.

As things stand pinning the country’s hopes on the private sector filling the gap is wishful thinking.

A £1bn regional growth fund and some corporation tax breaks are not going to do the trick. Nor will a bewildering array of grants and initiatives solve the problem in time.

Everyday a respected building contractor or civil engineering firm seems to go under, not always because it lacks a pipeline of work but because UK banks have had a sudden change of heart about how much they want to lend.

Fickle banking is costing construction jobs and stifling industry growth.

If there must be a U-turn it must be on the tight regulation on banks and lending.

Most banks can only be cajoled into action, but the two state-owned banks can be ordered to change their ways and invest.

That, after all, is what they are supposed to do.

Latest news

Lendlease puts construction arm up for sale

Radical global restructure to raise £2.3bn and focus on Australia
28 mins ago

Former Crossrail boss Mark Wild to lead HS2

Wild to bear down on spiralling costs and bring rejigged scheme in on time
18 hours ago

Receivers in at £125m Manchester tower developer

Domis Construction walked away from scheme following doubts over funding
2 days ago

Costain A1 £260m dualling job finally gets go-ahead

Ministers sat on planning inspectors report for nearly three years
6 hours ago

Election delays decision on Lower Thames Crossing

Planning decision on £1.2bn Luton airport expansion also pushed back six months
6 hours ago

Caddick steps-in at former Lane End housing job

Contractor to restart phase of £262m scheme hit by administration
5 hours ago

Plans in for Leeds iconic Tetley building revamp

Former brewing giant's HQ to become indoor market and offices
6 hours ago

BAM wins first phase of North Devon hospital revamp

New staff accommodation to kick-off hospital redevelopment
6 hours ago

McAlpine pulls out of £55m Carlisle Citadels project

University of Cumbria starts hunt for replacement contractor
5 days ago

Strabag UK suffers further big trading loss

Austrian contractor is gearing up for major presence in the UK market
4 days ago

Durham Uni picks UPP for £130m student scheme

Firm will deliver 1,000 self-catered bed spaces
4 days ago

Architects now upbeat after 10-months of work gloom

Larger practices see rising workloads in next three months
4 days ago

Motorist dies after collision with road paver

Police Scotland investigating fatal crash
5 days ago

McLaren Living appoints HG Construction for £69m scheme

Build to Rent scheme will transform former vacant car park site in Leeds city centre
5 days ago

Squibb liquidator probes £2m of “missing” plant

Machinery, cars and scrap metal have disappeared at demolition specialist
5 days ago

Galliford Try to re-enter affordable homes market

Contractor sets out new five-year plan to build margin to 4%
5 days ago

Former Sellar chief to lead civils contractor Kilnbridge

Owen Dannatt joins as new CEO as founder Dermot McDermott becomes Chairman
5 days ago

Hunt starts for nuclear fusion plant construction partner

Fusion energy plant to be built at West Burton coal power station site.
5 days ago

National Grid raises £7bn for big infrastructure upgrade

Rights issue to fund a major round of capital investment in energy infrastructure
5 days ago

Grenfell police probe to last at least until end of 2025

19 companies and 58 individuals could eventually face charges
6 days ago

Mace confirmed on £100m London office retrofit

Work underway on Helical's 100 New Bridge Street job near Ludgate Circus
6 days ago

Wylfa chosen for next big nuclear power station build

Government names Anglesey site for a large-scale gigawatt nuclear power plant.
6 days ago

Bowmer & Kirkland trading profit halves

Contractor buys HVAC specialist Adcock despite challenging market
6 days ago

Piling specialist Van Elle plans further job cuts

Piling specialist plans further cost savings in face of lower demand
6 days ago

Civils contractor A Catlow files administration notice

High voltage cable specialist lodges court notice
6 days ago

Green light for ARC Oxford lab campus

Work to start later this year on £40m Ascent building job
6 days ago

Stonehenge tunnel hit by another legal delay

Court upholds latest appeal against £1.7bn scheme by campaigners
7 days ago

Plans go in for huge Olympic Park construction hub

Bow Goods Yard could deliver 3.5m tonnes of materials a year to sites across London
1 week ago

40% affordable homes target for Labour’s new towns

Labour pledges to select new town sites by end of first year
1 week ago

Plan for £100m Liverpool Baltic station

Construction work could begin next year
1 week ago

Contractor services