Construction industry trade bodies and associations have set out pre-budget demands to the chancellor, days after he told CN that economic infrastructure is “vital” to Britain.
The chancellor is due to deliver his budget for 2013 on Wednesday, 20 March and boosts to energy-efficient housing, local infrastructure projects and shifts in the balance between current and capital expenditure are among the issues being highlighted as of crucial importance to getting the industry back to growth.
Speaking after criticism of the government’s record on delivering infrastructure from opposition parties in the House of Commons earlier this month, the chancellor insisted to CN on Friday that “[government is] spending more than our predecessors planned to spend on physical infrastructure, despite the tough economic situation and the absence of lots of money to go around”.
The Institution of Civil Engineers said the National Infrastructure Plan must move from a “rhetorical commitment to a programme of work that can deliver wide benefits” in both the short and long term.
Among its priorities is for the government to prioritise the UK’s flood defences for any additional public capital expenditure.
It also called for a delivery timeline for the top-40 priority projects, government to prioritise action on finance and funding and to set out more detail on what is required from each infrastructure network in order to meet government’s own goals, including clarity on acceptable trade-offs (e.g. achieving economic growth v reducing emissions).
On stimulating growth in the shorter term, ICE director general, Nick Baveystock, said: “There are a vast number of smaller scale infrastructure projects that are struggling to progress from planning to delivery. These projects, if unblocked, could rapidly translate into jobs and growth. The industry has a role to play in getting these projects off the ground, but it is vital that Government also plays its part.”
Construction Products Association
The Construction Products Association said it is vital that government spending is rebalanced between current and capital investment, as this could provide immediate construction and economic activity. It welcomed recent increases in capital investment for the repair and maintenance of roads, but said this needs to be extended to other parts of the built environment such as housing, schools and hospitals.
The association also called for:
- The Treasury to utilise finance available in the private sector, in the form of a bond auction, to finance a short-term capital investment expansion to drive UK economic growth;
- Ring-fenced funding for local authorities;
- Government to develop an infrastructure strategy, monitored by an independent infrastructure panel, to leverage private investment underpinned by government guarantees;
- A level playing field across Europe for energy-intensive product manufacturers;
- Government to utilise changes in stamp duty, which could be fiscally-neutral, to drive energy-efficient home improvements.
The Federation of Master Builders have also published an open letter to chancellor George Osborne.
The FMB has called for a focus on energy-efficient house building, with chief executive Brian Berry asking Mr Osborne to divert funds into a “massive public-sector programme to improve the energy-efficiency of Britain’s existing 26m homes”.
He claimed that this would “boost GDP by 0.2 per cent, create 130,000 jobs and help the government meet its own targets for cutting carbon emissions”.
The organisation also wants VAT to be cut from 20 per cent to 5 per cent on home renovation and repair, something Mr Osborne refused to expand on when asked by CN for his views on the potential for cutting VAT.
Civil Engineering Contractors Association
The Civil Engineering Contractors Association announced a list of infrastructure priorities in its letter, which it says need to be addressed for the sector to fulfil its growth potential.
It requested government assistance in unblocking local projects, asking it to help smaller projects that are struggling to move from the planning stage to delivery.
CECA cited statistics stating that 60 projects have sought details of the UK Guarantees scheme since summer 2012, and called for this interest to be converted into guarantees for new projects.
It also wrote that the Funding for Lending scheme should be promoted more aggressively, and that the Treasury should do more to ensure lenders take up more funds.
CECA director of external affairs Alasdair Reisner said: “CECA welcomes the government’s focus on infrastructure provision as the central pillar of its recovery strategy. At the same time, we believe there are steps that Mr Osborne can take in this budget which will increase workloads and help return the economy to growth in the short to medium term.”