Opinion: Osborne needs a bigger shovel

Grant Prior 12 years ago
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Construction is fast becoming a favourite entry in the Chancellor’s little black book.

When George Osborne needs a confidence booster he often turns to building and infrastructure to perk-up the bad news about the economy.

It was the same again during yesterday’s Autumn statement with construction investment plans pushed to the fore to sugar the pill of dire financial forecasts.

Of course a drowning man doesn’t throw back a life belt because it’s the wrong colour.

And contractors will be happy to see an extra £5bn committed to starting work “imminently” on a raft of road and rail projects.

But that figure is a drop in the ocean when put in context against an industry worth roughly £120bn a year.

The new money – which is £1.7bn a year over the next three years – equates to an annual increase of below 2%.

Now extra money is always welcome – but it’s hardly the grand investment push to “Get Britain Building” being trumpeted by the Government front bench.

And don’t forget, that money will mainly go towards projects which were originally cancelled in Osborne’s first spending review.

That review saw a drop in capital spending from £62bn in 2010/11 to £45m in 2013/14 so we’ve got a long way to go to make up lost ground.

Contractors were looking for a simple list of new projects alongside a definite start date for work.

Fat chance of that as Osborne started to morph into our old mate Gordon Brown while launching a bewildering barrage of statistics.

Treasury policy wonks love nothing more than to muddy the waters of investment plans with a blizzard of conflicting reports, forecasts, reviews and re-announced old projects.

We’ve done our best at the Enquirer to distill the Treasury-speak into English.

But even priority projects are still conspicuously free of start dates.

The lack of clear information raises fears that this is more of a long-term wish list than a programme designed to immediately help work-starved contractors.

The Government latched on to the term “shovel-ready” schemes.

But the reality is most of these projects will take months if not years to get going.

Major contractors have the resources to wait things out for a while if there’s a promise of more investment ahead.

The Government is making a lot of noise about protecting small and medium sized firms.

And they are exactly the people who need work now.

They are ready with their shovels but will need them to dig their way out of a financial hole if this work drought continues.

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