Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Spending cuts demand 'more for less' - again

Now that the red box is closed and the buzz has died down, what should we make of last week’s Autumn Statement?

Road builders should still have a smile on their faces after the new strategy was unveiled, but on the whole, the takeaways for construction were less tangible.

Clarity of pipeline in the National Infrastructure Plan and a few much-needed guarantees were certainly welcome. But as some of our columnists also write this week, much of the statement’s substance was repeats, like the £2.3bn for floods, rather than announcing any new money.

Instead, there is the prospect of £55bn spending cuts over the course of the next parliament, described by Paul Johnson from the Institute for Fiscal Studies as being on such a colossal scale that it would mean a “fundamental reimagining of the role of the state”.

It would bring spending down to levels not seen since the 1930s.

The overall picture moving forward is of an evolving, demanding landscape

Construction has been lobbying for some time for government to invest in capital expenditure at the expense of current spending, and that message has been taken on board by the coalition. Health and pensions have been ringfenced, but welfare is most certainly set for the axe.

So while this won’t play too harshly for construction on the face of it, it provides a jolt to say we’re not yet back to normal.
We must remember too that two-thirds of the £466bn NIP pipeline relies on private investment, according to the Construction Products Association.

The overall picture moving forward is of an evolving, demanding landscape. Opportunities will certainly come from the need to bring forward new public private partnerships.

One example in the statement was the government’s plan to develop and build a new 10,000-home settlement on a former MOD site in Cambridgeshire. This injects some fresh thinking, but it will certainly benefit from the new financial models for housing being pioneered by contractors like Kier.

What we can also take away from the scale of the cuts is the continued pressing need to build more for less. Whoever wins the next general election is not going to walk away quickly from those 33 per cent reduction targets set out in the industrial strategy. The problem is that as the market continues to rise on the back of the housing boom, those KPIs look light years away.

The construction of Alder Hey hospital shows how off-site manufacture and BIM can certainly deliver at speed. With its plans for a new town at Northstowe, the government has the ideal opportunity to embrace BIM and off-site housing, and really road-test the validity of its own 2050 strategy.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.

Related Jobs