Executive Hire News › Archives › May 2009 › Forum : Building Britain's future?
Forum : Building Britain's future?
The title of this year’s Budget might sound positive and, indeed the Chancellor’s speech tried to put a positive gloss on some truly horrendous statistics. The level of Government debt as a result of the banking fiasco is breathtaking and leaves us all concerned for the future.
So does, and will, the 268 page Budget document live up to its title? In particular, will it help the beleaguered construction industry? There are some beneficial measures such as the £600m funding to unlock dormant sites for housing, but, against this, must be set the probability that rising unemployment will exert a negative effect on the demand for private housing.
Welcome too is the policy of ‘building a low-carbon recovery’ with its provision of over £1.4 billion of support; it is difficult to evaluate the implications for construction, but, undoubtedly, it will be one of the major beneficiaries of this largesse. The Budget is based on what most commentators regard as highly optimistic growth forecasts, suggesting that 2010 will see the beginning of recovery.
Only the most eternal optimist will find this credible, especially after the way he has so blatantly torn up last November’s Treasury forecasts. We have also Alistair Darling’s promise to continue capital expenditure at historic levels until 2012 and from then on maintaining it at 1.25% of GDP, although it is debatable whether he will be in office to oversee these plans.
“TINKERING AT THE EDGES”
However we must remember that the construction industry saw a drop of £1.7 billion in output in the last quarter of 2008. No wonder some construction leaders have described these Budget measures as “tinkering at the edges.” It seems the industry is being offered a sticking plaster when it needs a skin graft. The worst levels of public indebtedness since World War II, with net debt as a percentage of GDP forecast to rise to 79% in 2013-14, mean that, over the foreseeable future, public expenditure is going to be increasingly squeezed.
So the construction industry looks increasingly threatened by a lack of both private and public investment and yet, if the economy is to recover, construction has to play a pivotal role. At a recent press briefing, Speedy Chief Executive Steve Corcoran stressed the importance of construction to the overall UK economy. “Construction accounts for up to 9% of GDP and employs one in ten of the UK’s workforce.
It is more important to the overall economy than the financial and automotive industries. However, it has had no cohesive message to Government.
“Faced with the prospect of losing up to 300,000 jobs before this Christmas, the construction industry needs to stand up and shout about more of its successes. Its voice must be heard loud and clear in the inevitable debate over spending priorities. More importantly, it needs to recognise its value to the economy. The importance of construction has to be imbedded in Government thinking. The Government needs to commit to infrastructure spend in construction because the industry will deliver a tangible product. It is a natural home for that spend as it employs people, lowers emissions and improves efficiencies.”
To start re-dressing some of these issues, The CBI formed the Construction Council last year to represent contractors, house builders, civil engineers, as well as manufacturers and designers. Hire is an essential player in today’s construction market and Speedy is the market leader.
As the hire industry representative on this Council, Steve Corcoran is seeking to influence UK construction as a whole so that it formulates a more cohesive and coherent approach to this unprecedented recession and strengthens its ability to withstand the current difficulties and to prosper when the economy returns to growth. In these endeavours, we wish him every success.
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