The government has proven that it recognises the crucial part construction can play in economic recovery
“Imaginative”, “realistic”, “just excellent”. The superlatives used by several construction leaders to describe this week’s autumn statement are a pretty strong endorsement of the chancellor’s announcement. They are also a vivid contrast with the reaction to pretty much every other major government initiative over the past year - which has been lukewarm at best.
It may have been a long time coming, but it seems that George Osborne is, at least where construction is concerned, finally getting his act together. The fact that the positive response to the measures outlined on Tuesday overshadowed industry anxieties over the worsening picture for the economy underlines the sense of relief at the steps the government is taking to address the concerns of the sector.
It may have been a long time coming, but it seems that George Osborne is, at least where construction is concerned, finally getting his act together
The main bonuses for the industry in Tuesday’s statement were, of course, widely trailed - the publication of a pipeline of 500 infrastructure projects, a £10bn capital spending bonus and a plan to get pension funds and capital markets to come up with another £20bn of funds for much-needed infrastructure projects. In themselves, these are all very welcome boosts for an industry teetering on the brink of a slide back into the dark times of 2008.
But what equally caught the industry’s attention on Tuesday was the chancellor’s clear change of emphasis onto capital spending - his decision to switch £5bn of current spending towards capital projects over this parliament was underpinned by a continued emphasis on the importance of construction and infrastructure schemes to economic growth. It’s something that the industry has been attempting to drive home to the government for the last two years - and now, the message has hit home.
Of course, there are still large question marks over whether Osborne’s latest plans will work and these remain of great concern to the industry. The Treasury’s bullishness over its ability to get private investors to drive infrastructure finance is encouraging but unproven, and the success of this will be crucial to whether other measures - such as the pipeline of infrastructure schemes outlined - will fulfil their potential to provide a lifeline to the sector. And, as Michael Ankers of the Construction Products Association pointed out, this week’s statement is still set against a £17bn drop in capital spending between 2010 and 2014 (steel yourselves for competition for the work that is forthcoming) and not enough to put all companies on firmer ground.
But the chancellor’s change of direction is a clear signal that the government recognises the crucial part construction can play in economic recovery. And the raft of policies announced or confirmed this week are the proof that it is prepared to act on that recognition. As well as the individual announcements this week, that is a sure sign of hope for the sector.
Sarah Richardson, deputy editor