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Industry reaction to Investing in Britain's future

The construction industry has its say on the announcement’s in Danny Alexander’s Treasury Investing in Britain’s Future statement this morning.

CBI chief policy director Katja Hall:

“The energy plans are a big step forward and should unlock the private investment we need to keep the lights on and costs down. The renewables strike price and capacity mechanism will enable investors to take their plans off the drawing board and on to building sites.

“Extending the UK Guarantees Scheme is a no-brainer. Potential investors have been put off by the impending cliff-edge next year. The new guarantees for the Mersey Gateway and Hinkley Point will reassure business that ministers are backing up their promises with real action.

“The rush of road projects will create jobs in the short-term and boost growth in the long-term. We can’t afford ever-rising congestion and the dire quality of some of our roads, if we want to attract inward investment and drive up exports.”

Costain Group managing director of infrastructure Darren James:

“The UK faces some urgent national infrastructure needs. So the government’s backing for increased infrastructure spend is welcome – but it’s not the whole story. We suppliers must play our part too.

“Our customers now want value-driven and above all, innovative solutions. At Costain we call this ‘Engineering Tomorrow’ – innovating to meet vital national requirements.  We believe that makes us, and the few companies like us, a major part of the solution to the problem.”

KPMG head of infrastructure, building and construction Richard Threlfall:

“Taking a closer look at the numbers one has to ask the question whether the planned investments are really enough to boost growth and our competitiveness on a global level.

“The plan is to spend about £20bn per year on infrastructure projects between 2015 and 2020. The reality is that the UK is spending less than most of its global competitors on new infrastructure.

“The real prize remains leveraging more private money in order to meet our infrastructure needs of the future. Experts estimate that the UK needs at least £400bn investment into our ailing infrastructure over the next 10 years. The government needs to provide a better climate for more private investment into our infrastructure.”

Association for Consultancy and Engineering chief executive Dr Nelson Ogunshakin OBE:

“In a spending round dominated by a challenging economy, we welcome government’s moves to invest in Britain’s future by increasing capital spending, giving firm spending commitments to existing infrastructure projects and announcing new projects to expand industry’s forward pipeline.

“Confidence has been significantly boosted by the government’s moves to provide longer funding plans. This gives certainty to industry and investors over the long term, better fitting the cycle of infrastructure financing, planning and delivery.

“Moving funding beyond a parliamentary term does mean, however, securing cross party support to these plans. We therefore call on the Labour Party to endorse these longer funding plans to maintain this certainty and confidence.”

PwC engineering and construction partner Chris Temple:

“Today’s announcement to support the construction and house building sector with major investments is welcome in theory, but we will need the details to be transparent and for the government to adopt an ‘act now’ approach to avoid any further stagnation.

“The £3bn to kick start the 165,000 new affordable homes is an ambitious commitment and will be a welcome change. We will also need to see a commitment towards better connectivity between financiers, suppliers, contractors and buyers to enable this ambition to be realised.”

PWC global head of infrastructure and partner Richard Abadie:

“Although there were no major surprises, we do now have a lot more detail and clarity over what spend is coming up over the next few years, which is very positive. However, some of the projects announced are projects that have been underway for several years such as CrossRail, Royal Liverpool Hospital and Mersey gateway bridge, so don’t provide any new opportunity for the infrastructure industry.

“We note that government has said that they will not add a pound to the borrowing forecast to fund these plans. This approach to infrastructure investment is from the point of view of affordability, rather than from what infrastructure is needed and when, which should be the key determinants in driving economic growth and jobs.

PwC real estate partner Rosalind Rowe:

“We welcome today’s announcements as a positive start, but need to see an indication that they are part of a sustainable plan. We would encourage the Government to do more and make the affordable homes initiative cross-party and in line with the recent recommendations from the RICS Housing Commission report on providing decent homes.

Deloitte head of infrastructure Nick Prior:

“The chief secretary’s announcements, particularly around energy and investment in the road network, are broadly positive. The visibility over investment in road and rail projects will allow for better economic planning.

“Most of the measures and money announced will not take effect until 2015 or beyond. The construction industry and the broader economy will be disappointed in today’s announcement as we will only see an economic boost when the shovels hit the ground on these projects.

“If infrastructure is intended to halt the decline in the construction industry, and revive the wider economy, both projects and money must be bought forward as soon as possible.”

Pinsent Masons infrastructure partner Jon Hart:

“The chief secretary’s announcement has provided some good headlines in respect of new commitments to rail and road in particular. Some schemes may even enter procurement before next parliament. 

“However, in terms of a real boost for the sector, most of the commitments are likely to be post 2015, which for jobs and investments is very disappointing.  There are some huge questions to be addressed too: the future of the Highways Agency and road pricing, revamping rail franchising and channelling funds to local authorities.  In the case of energy, we still need firm commitments beyond the announced guarantees to enable the nuclear building programme to properly commence.”

RenewableUK chief executive Maria McCaffery:

“The confirmation of levels of the draft strike prices is a welcome step forward in setting out how the long term market is going to work. The levels of the strike prices are challenging but possible considering the reduced time periods that renewables will be supported for under contract for difference system compared to the Renewable Obligation.

“However, more details do need to be set out. The most important ingredient remains investor confidence and that will take time to land. The secret is consistent long term support and investors seeing that government is behind renewables and low carbon generation for the long term.

“It’s now up to government and industry to work together to ensure that the wider supply chain has the confidence to gear up to enable tens of thousands of jobs to be created by the end of the decade.”  

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