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Government has created a state of purdah for construction

The announcements made last week around infrastructure in the UK – both in the National Infrastructure Plan and the Autumn Statement – all seemed positive at first glance, with promises of project deliveries and investment from the government.

But delve deeper into the specifics and it’s clear that the impending general election means these plans represent only an ‘intention to spend’, rather than a formal legislative commitment.

The problem lies in the fact that, if the coalition is not in government after the election, any future regime could cancel or change these plans, which scuppers one of the key purposes of the National Infrastructure Plan: to provide a secure pipeline of work for the construction industry.

The government’s pledge to put £15bn into funding 80 new road projects is the most promising news. Historically, similar programmes have been cancelled due to political inertia but this announcement shows that the scale of behind-the-scenes activity by the government has been genuine.

The challenge will be to ensure that the £15bn can be delivered efficiently so that as little impact as possible is felt by the driving public.

But the £4bn cut to local authority funding, announced in the Autumn Statement, will cause considerable unease about how local highways authorities will cope. 

The National Infrastructure Plan finally addresses the historic underinvestment in energy infrastructure.

Energy efficiency, saving and heat, have all been rightly prioritised. It will be interesting to see how this plays out in the next government, given that investors are acutely aware that much is dependent on the outcome of the election next year.

Investment decisions required to provide new capacity to meet the demand placed by these future projects need to be made now, but bank lending figures suggest this is not happening.

The government is criticising the industry for not recruiting and investing in new talent to meet demand, yet by not making formal commitments towards these projects, the government has effectively created its own state of ‘purdah’ for the construction industry as nobody fully trusts its announcements and therefore does not have the confidence to invest as a result.

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