London faces huge challenges including a water shortage and transport pressure if infrastructure investment is not forthcoming, according to panellists at today’s Construction News Summit.
The panel, chaired by broadcaster and journalist Andrew Neil, consisted of deputy mayor for housing, land and property Richard Blakeway, Cabinet Office head of construction David Hancock, BCC head of research Mike Spicer and Lloyds Bank chief economist Trevor Williams.
The panel outlined their vision for how macroeconomic factors would affect the industry over the next five years.
On the country’s outlook for next year, Mr Williams said the UK needed “between 2.5 per cent and 3 per cent growth”, while Mr Spicer said the BCC’s prediction for growth was slightly lower than this year, standing at just under 3 per cent.
The panel agreed that growth was still primarily concentrated in London and the South-east.
Richard Blakeway argued that London in particular faced “huge” challenges – not just in demand for housing but in infrastructure as well.
“There has been major growth and there will continue to be an expansion of the economy and the population – but how do we ensure a lack of infrastructure doesn’t undermine that growth?” he said.
“By 2020 the number of passengers using the London Underground will increase by 30 per cent, and we will have a shortage of half a million litres of water a day if infrastructure isn’t upgraded.”
Mr Williams said the industry was “aware” it was building too few homes, acknowledging that “there haven’t been enough homes built in the last 15 or 20 years” and adding that regulation was restricting supply.
When asked about investment, David Hancock argued it should not be about “more money” but “how we can do more with the money that we’ve got”.
“We are looking at between 15 and 20 per cent in savings in the government’s construction budget, and collaboration is something we’ve long been looking for in the supply chain to achieve these savings.”
“We’ve lagged behind in the uptake of digital in particular and this has held back growth.”
The panel discussion is part of the Construction News Summit 2014.