When Alistair Darling delivered his pre-Budget report in November, most firms were hoping that it would launch a lifeboat they could clamber aboard to wait out the worst of the recession
Five months on, it’s clear that, not only was the rescue craft a small rowing boat (as opposed to the cruise liner laid on for the car and financial services industries), but it is in danger of running aground.
Darling’s big idea was to bring forward £3bn of capital investment from the 2010/11 financial year and spend it on construction projects. So far, this has made no difference. Many of the reasons are wearily familiar: Whitehall indecision over which projects are to benefit, convoluted procurement processes, a favouring of large, long-term schemes that take years to plan (and get through planning), and some extraordinary mismanagement by specialised agencies such as the Learning and Skills Council. The problem underlying all these is the incoherence of the machinery of government when it comes to construction spending. Even a sinking ship needs a captain, and there is nobody, and no body, co-ordinating the government’s investment, or even ensuring that spending departments actually use the money allocated to them. In the past, this was routine: departments hardly ever used all their budgets, and the Treasury was happy to take back the surplus. These days, alas, we can’t afford such parsimony.
It is this lack of control over the rescue package that Darling urgently needs to address in Wednesday’s Budget. In the future, we may get a chief construction officer, and he or she may make a difference. But we can’t wait for that to happen: by now councils have put their bids in for schools, hospitals and transport schemes. These projects should be prioritised, and then tracked to ensure they are delivered. If any get bogged down, there should be a swift mechanism for directing the money elsewhere. The industry’s suggestions for other measures are set out on page 14, and very sensible they are, too. They include a scheme to shore up the ailing credit insurance industry (see page 28) and a long awaited cut in the rate of VAT on refurbishment, which the Federation of Master Builders says could add £6.5bn a year to the market. No doubt some housebuilders and contractors would also like Darling to splash more cash and hand out mortgages like lollipops, but these relatively dull suggestions should make for better managed public procurement – and that is the best way for the government to help the industry, the economy and, come the next election, itself.
In the past, departments hardly ever used all their budgets, and the Treasury was happy to take back the surplus. These days, alas, we can’t afford such parsimony
The dirt behind the dream
Those of you who watched Panorama on BBC1 last week would have seen just how badly some migrant workers are treated in Dubai. And those of you who actually work in the Emirates may have seen it for yourself. The maltreatment of migrants is not exactly unknown in our own industry. Our darkest days may be behind us, but unions still expose gangmasters who pay less than the minimum wage. Usually, a main contractor is able to say it acted as soon as it became aware of the problem, as Skanska did last year at the King’s Mill hospital in Mansfield. Even though Dubai’s ministry of labour has announced a crackdown on unscrupulous labour agencies, there are no unions to fight for workers’ rights. Given the moral issues involved – not to mention the implications for one’s public image – firms would do well to ensure that none of the workers on their sites are living in conditions like those shown by the BBC. The increasing media focus on the issue means that turning a blind eye to what happens to workers when they finish a shift is unlikely to be an option much longer.
Sarah Richardson, assistant editor