The impact of cuts in public sector spending has taken longer to filter through to the industry’s bottom line than expected. But now that falling construction output is being blamed, at least partially, for the descent into double-dip recession, tempers are fraying on all sides.
The construction industry has done its very best to pre-empt the decline in all public sector work, with firms refocusing their efforts on areas that are most likely to garner work. But the hoped-for pick-up in private sector work hasn’t been enough to fill the gap.
Effective lobbying by the industry has meant the government has recognised the economic benefits construction brings – from jobs to social mobility to improved facilities – but this has been very much focused on a commitment to infrastructure, and even that will only happen if investors can be persuaded to put up the cash. It’s not a quick fix.
Meanwhile, the £2 billion allocated to the Priority Schools programme is sitting unspent, months after the government originally promised to decide who had won a share of the pot.
Work that could be starting is at a standstill, while all sides increasingly lose faith that the process will be any more efficient than Building Schools for the Future. Some education contractors are threatening to walk away.
Similarly, PFI has been under review for long enough to cause the industry considerable damage, but not for long enough to cleanse it of its toxic associations. And in the meantime, little or nothing happens.
Under these circumstances, visibility of work is more important than ever. The publication of the land that the NHS might be able to sell or remodel for development is useful for proactive contractors that can start to work up offers and plans.
Forward-thinking NHS organisations and local authorities are already talking to and working with contractors to come up with fresh investment and development models.
In this context, the Local Government Association’s decision not to sign up to the government’s procurement pledge, and to issue a statement saying it doesn’t want to publish local pipelines of work because it doesn’t want the private sector to profit, is simplistic, insulting and undermining of those among their members who rightly recognise that by working collaboratively with contractors, they will be able to do more for their populations.
Hasn’t it heard we’re all in this together?