From now on, the sector will no longer be able to rely on dedicated funding under the Partners in Innovation scheme as the DTI believes industries should compete equally for the same pot of money.
Industry leaders fear construction will find it difficult to compete with other industries. They are particularly concerned that the government will neglect the sector because it favours industries that provide matching funding, and this is easier to organise where there are fewer and larger players.
Turlogh O'Brien, chairman of the Construction Industry Council, said: "There won't be any short-term impact but in a few years, the industry's technical knowledge will start to wither."
The government part-funded 115 research programmes four years ago, but now funds none. Partners in Innovation used to provide about £7m a year in part-funding for research. This ended when responsibility for the construction industry was switched from the Department of the Environment, Transport and the Regions to the DTI in 2002.
Under Partners in Innovation, the average amount of funding for a construction project was £70,000.
After undertaking a review of how money is spent on R&D, the DTI now wants to channel up to £1m into single schemes that have the potential to create a step change in an industry.
In a few years, the industry’s knowledge will start to wither
Turlogh O’Brien, CIC chairman
Many of these schemes are not directly linked to construction. Of seven now being considered for funding by the DTI, only one is construction-related.
Farshad Alamdari, chief scientist at construction research group BRE, suggested that the rationale for this change in funding was that the government was more interested in conciliating multinational companies that might be considering moving research abroad.
He said: "Such firms are interested in blue-sky research; construction research is more about incremental improvements in product and process."
Alamdari said that without reliable funding the future of BRE could be under threat.
The DTI is considering setting up a strategy board by this autumn to decide on the projects that deserve funding.