The government’s clarity of policy and decision-making has been much better than expected, according to the latest Construction Leaders Forum, organised by Construction News in association with Hays.
When the CLF met in the spring, discussion focused on the forthcoming election and the fall-out from continued political uncertainty. The nightmare scenario for many participants turned into reality - the Conservatives were unable to form a working majority and were forced into coalition with the Liberal Democrats.
“My view is the coalition has done pretty well. People might not like the speed with which that has come but you can’t accuse them of lack of clarity. They’re doing a good job of what they’re setting out to do. It’s been decisive,” said one chief executive.
But there was a lot less support for Vince Cable’s performance as business secretary: “Cable can’t keep going off message. There’s real confusion over who is speaking for future investment.”
The main concern about government activity was over the clash between its support for both local decision making and large-scale projects.
One CLF member said: “We’re told ‘son of Infrastructure Planning Commission’ will be born shortly. Most of the staff we were told have been retained. Carbon floor price is crucial and planning is crucial to attract foreign owner operators and investors to solve the energy gap.”
Another added: “Infrastructure UK has said the independence of decision making linked to planning will be retained by the coalition government. There could be a spanner in the works with localism. I’m hoping IUK will negate any localism impacts through planning.”
There was also widespread scepticism about government statistics that appeared to show construction growing strongly in the third quarter of this year.
Most company leaders believed the numbers reflected the aftermath of bad weather in the first quarter and the election in the second quarter, rather than the sign of a real recovery.
There was a wider debate about pricing over the past couple of years and the desire of public sector clients to dismantle framework agreements. There was a general fear that clients would be prepared to swallow the legal consequences of reneging on agreements in order to make big savings.
One chief executive said: “I think we will see government procurement become more and more centralised and payment becoming much more draconian.
“We’ll come back in 12 to 18 months and the unthinkable will have become thinkable. The industry has changed rapidly and fundamentally.”
There was disagreement about the prospects on waste with some chief executives believing largescale investment by local authorities was crippled by the cancellation of PFI credits, while others saw it as an opportunity.
One said: “There are still huge amounts of EU legislation and penalties if authorities don’t reach landfill targets. There are plenty of drivers to deliver waste schemes. The lag - maybe six to nine months - will be in sorting alternative means of finance.”