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UK behind in construction stimulus spend

New figures reveal that the UK government is lagging behind many other major nations in spending on construction stimulus packages

The UK Government is lagging behind many other industrialised nations when it comes to stimulus packages for construction.

Research from the Construction Products Association shows most major countries have proposed far more substantial capital spending programmes during the current global recession.

The USA is leading the way with a £90 billion package living up to President Barack Obama’s pledge to “build America out of the recession”.

But similar pledges have been made this side of the Atlantic as well.

Although from the Association’s figures it seems Germany and Italy, in Europe, are the ones putting the money where their mouth is.

The research was pulled after talks with the Association’s members who have operations across the world.

While in a number of countries there is an element of ‘brought forward’ capital spending from future years, most of what is proposed is additional spend.

In contrast, in the UK there is very little new capital spend and most is brought forward into 2009 and 2010 from the following year.

But as the Association itself acknowledges UK capital expenditure on construction related activities was running at record levels prior to the downturn, not necessarily the case in other nations.

Only Germany and Sweden of the major countries appear to have introduced any significant measures to improve and create new social housing stock.

France – and possibly some others – already had tax reductions in place for this kind of work.

The UK Government has introduced some additional support through the Carbon Emissions Reduction Target scheme, which pushes energy suppliers to promote carbon emission cuts in the home.

But the Association decided not to include it in the figures because it is not Government funding.

Perhaps of key significance however, and as has been crucially found in the UK, it is the delivery of these programmes that is key, not simply a programme.

In all cases it is too early to judge whether aspirations are actually being turned into reality.

Construction Products Association external affairs director Simon Storer said: “There is no doubt that over the last ten years there has been significant investment by the government in desperately needed public sector projects.

“However the job is far from done – on international comparisons the UK still has considerable weakness

“Whoever is in government after the next election will have to address the future spending plans – but they must differentiate between capital and current expenditure and short term expediency must not be used as a substitute for long term vision.”

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