So, now the news has sunk in and David Cameron is back in Number 10, what does the result really mean for construction?
It is almost a week since the UK woke up to an election result no one was expecting, with the Conservatives’ shock majority victory flying in the face of national, industry and (as anyone who followed the BBC’s coverage will know) the hat-eating Lord Ashdown’s expectations of a hung parliament. So, now the news has sunk in, and David Cameron is back in Number 10, what does the result - and the unexpected clarity it brings - really mean for construction?
There are, from a business perspective, plenty of positives from this decisive outcome. It avoids the investor uncertainty of a hung parliament - so fears of a hiatus in work following the election have dissolved even faster than observers’ faith in pre-election polls.
Longer term, the strength the result lends to the Conservatives’ decision-making means that the industry can reasonably expect that judgements on public sector investment will be taken more swiftly than they might otherwise have been.
When it comes to the Conservatives as victors, there are several resulting effects which construction will welcome. The rise in housebuilders’ shares which accompanied the victory - up on average 6.5% last Friday - was a taster of the buoyancy this sector of the market can expect under the new government.
Part of this is down to the boost the stability of a certain outcome has given investor confidence.
But it is also because the win rubber stamps the continuation of the popular help to buy scheme and - whether or not you personally support the sale of homes to overseas buyers - also because there will be a boost to that market from the party’s non-dom friendly policies. The future also looks bright for high-speed rail, with HS2 and HS3 key Conservative policies.
On the flip side, there is still a referendum on EU membership on the horizon, so it is important that the recovery gains enough momentum to mitigate the investor uncertainty that is likely to emerge as that approaches. In that sense, the result could still lead to an investment hiatus, just later than expected. And, although the Conservatives do have a majority, it is a slim one, so businesses need to be alive to potential wrangling on sensitive issues (the response to the eventual outcome to the Davies commission on airport capacity springs to mind).
The Conservatives’ campaign was fought on the basis of a continued reining in of public spending, so it is clear that, although the coalition’s programmes of improvement and expansion on facilities like schools will continue, there will be no sudden relaxation of the tight budgets that have made areas like these tough to deliver over the past few years.
In one sense, this is a headache rather than a migraine for an industry now used to such constraints, but it does raise questions over how the government will meet the pent-up demand for new facilities. And this challenge - which affects not just schools, but also housing, transport, and energy infrastructure - also raises a question for the industry.
With the decisiveness of the Conservatives’ victory, it is clear that there will be a steady pipeline of work, which is great news for the industry’s growing recovery - even if directly funded work is not of the volume some might like.
But there is also a moral question at stake, over making sure that the facilities being built are - despite spending constraints - genuinely fit for purpose for the future generations they are intended to serve. And also, given the Conservatives’ track record on green policy, whether they are sustainable, or storing up environmental problems for later down the line.
It’s here that the industry, with all of its expertise, can play a big role: by not just delivering to order, but by making the case to government for approaches which will help the UK to get more for less - but not for
less quality or longevity.
Sarah Richardson, editor