Contractors have warned that the real test of the comprehensive spending review will be whether it allows the private sector to recover sufficiently to make up for the loss of public sector capital spending.
Chancellor George Osborne today revealed a series of departmental capital cuts that mean overall capital spending will fall from £68.7 billion in 2009/10 to £47.2bn in 2014/15.
UK Contractors Group director Stephen Ratcliffe told Construction News: “It is a bit better than expected as there seems to be about £3.5bn extra for construction over the next four financial years than announced in the emergency budget.
“However, much of the detail is yet to come. We really need clarity.”
He added: “To assess the overall impact of today’s announcement on the construction industry, what will be important is to what extent it allows the private sector to bounce back.”
UKCG chairman James Wates added: “It would be all too easy to lament the fairly draconian cuts announced today in capital spend. But they were not unexpected and there seems to be some £3.5bn extra for construction over the next four years than announced in the emergency budget.
“Some of the details in the jigsaw are falling into place and there are real opportunities for construction especially in transport and energy but also in education and health.
“We are particularly pleased about the extra funds to support apprentices for which we have all been campaigning.
“Our job is to help the industry get absolute clarity over the forward line of investment and to engage in debate with government to help it find solutions to its investment needs. Now the phoney war is over we can get on with this job.”