As the government prepares its emergency Budget, Building has prepared an emergency letter reiterating our Charter 284 demands. All you have to do is download it, sign it and send it to your MP
With the emergency Budget on 22 June due bring more axe blows against public spending, it’s more urgent than ever that politicians heed the message of our Charter 284 campaign, which makes the case for continued investment in key areas. That’s why this week we’re asking you to take action, by writing to your MP. We’ve made it easy by preparing the letter for you - all you have to do is download it from our website and add your details to it.
Charter 284 emphasises the need to keep spending on construction for the good of the UK’s economy, since every pound spent in the sector produces £2.84 of GDP, according to an independent report by economic consultant LEK.
With David Cameron setting out the case for deep spending cuts, the prognosis for public capital spending is depressing. The £55bn Building Schools for the Future programme is under threat with all schemes that have not reached preferred bidder stage to go on hold pending a review, as revealed by Building. Meanwhile, the Treasury has told the Homes and Communities Agency (HCA) that £730m of funding is “not secure”, and Building has revealed that Crossrail’s £16.9bn budget could be slashed by a third.
On top of it all, the Decentralisation and Localism Bill announced last month, which will give councils control of planning, has raised fears that planning decisions will stall while the system is changed.
David Fison, the chief executive of contractor Osborne, which gets at least half its £334m turnover from the public sector, says: “Regardless of what the spending agreements say, they could be ripped up. These are worrying times.”
This is why we are urging you to write to your MP to reiterate Charter 284’s five demands:
- Complete the renewal of the school estate
- Don’t let spending on transport infrastructure fall more than 10% below current levels
- Reduce the regulatory burden on the housing sector to encourage more development
- Give householders incentives to green existing homes
- Prioritise the development of renewable and nuclear energy through incentives for private sector investment.
Of course, it is not just an economic argument - Charter 284 is also about the industry’s survival. As a reminder of how vital it is that the government heed that message, we hear from three companies for whom the threat of cuts is taking its toll.
Stephen Gleave, managing director of architect Taylor Young
Public sector is 60-65% of its £10m turnover
All we’re hearing from the government and media is how severe the cuts are going to be. Well, tell us what’s going to be cut. We need some pretty rapid decision-making so we can start dealing with it.
We have two or three public sector projects that we’ve been told we have won but we are waiting for the official instruction as this hiatus rolls on. We are also in the process of bidding for projects where there is a great deal of uncertainty about whether they will happen, and this costs of lot of money.
We have already halved our staff to 110 people and reduced salaries in the past year and our employees have found it hard to see how it has changed so quickly - in 2008 we were one of Building’s fastest growing consultants.
We were hit in a big way by the failure of the Learning and Skills Council but we’re preparing for further bad news from the public sector by building up our private sector work. The problem with some of our commercial stuff, though, is that we’re working for private contractors and a lot of the work they have is for public clients: PFI prisons, police and BSF, for example.
Despite the staff cuts we have retained our structure - we still have offices in Leeds, Liverpool and Manchester, and we’re surviving.
Jonathan Hines, director of architect Architype
Public sector is 66% of its £2.5m turnover
At the moment everyone is carrying on as normal, working on projects and bids, and just waiting for the axe to fall. I’m very concerned about the looming cuts because I believe they have the potential to put the industry into a deep recession, which will hit the UK economy, as construction makes up about 10% of GDP. With two-thirds of our turnover from the public sector, including 50% from education, of course it’s a worry. There will be less work out there for sure.
But I’m not pessimistic about our chances - in times of austerity it’s the firms that can innovate and adapt that will do well. It’s not just about cutting fees. We are also preparing for the public sector cuts by working on leads and bids in other areas and I’m optimistic about that.
But I would have preferred a different election result as I believe in positive investment for our children’s future and under the coalition we’re going to see a completely different approach. Building Schools for the Future was about taking all the schools in an area and transforming them, but the coalition’s policy will lead to a two-tier system where schools that opt to become independent from the local authority, if they attract money, will be improved while the other schools are left behind.
David Fison, chief executive of contractor Osborne
Public sector is more than 50% of its £334m turnover
The mood here is we’re battening down the hatches. We do a lot of housing though the Homes and Communities Agency, so God help us with that. We also do lots of schools, although not through Building Schools for the Future, and that work may or may not go on, we can’t tell. We were also hoping to win work through the Procure 21 Plus framework, but God knows if that will get approved now. We’re on Procure 21, which will carry on, but there’s no guarantee we’ll get work out of it. Our work for the Highways Agency and big rail businesses are partially protected by the spending agreements in place. Overall, at least half our business comes from the government, and more is related to PFI, so also linked to the public sector.
We know cuts are coming but we don’t know exactly how it’s going to go. And that’s because the government doesn’t know yet. We don’t even know if they’ll cut some things and not others or cut a bit less from everything.
Neither do I think we’ll be much the wiser after
22 June. I see an extended hiatus until the Comprehensive Spending Review in the autumn. So we’ll be living with uncertainty for a long time - and that will mean less work.
I do think comparatively small projects will go ahead; it’s the deals worth hundreds of millions that will be more likely to be reviewed. This should favour firms like ours because jobs up to £20m are what we do. We’re going to be facing increasing competition for them from bigger firms of course, but we’ll fight. “
Download the toolkit
The Charter 284 letter can be downloaded at www.building.co.uk/charter284. Simply add your details and send it to your local MP. The kit includes a downloadable list of supporters, as well as our campaign logo and key articles making the case for the campaign.