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North-east facing 'catastrophic collapse' as MPs called in for help

The North-east branch of the Civil Engineering Contractors Association has warned that the region is facing a “potentially catastrophic collapse” in its transport and utility sectors.

Of the 20 local authority major transport projects backed by the government in the National Infrastructure Plan 2, none were in the North-east, though support was given through other announcements including the Tyne-Wear Metro.

Mr Kell said: “Companies are making more redundancies and trying to diversify and while there are not as many closing as I would have thought, a lot of civils firms are just hanging on and are still buying contracts when they shouldn’t be.”

The Centre of Economics and Business Research said that output in North East construction fell by 28 per cent between 2008 and 2010 - more than double the fall in any other region – and new construction orders in the region were down 41 per cent in the first half of the year on the same time in 2010 according to the Office for National Statistics.

Factfile: CECA North-east

The 41 per cent drop in construction orders compares with a 7 per cent bounceback evident during 2010 in the industry as a whole. Without the bridge and the bypass, CECA believes there could be a further decline of 9 or 10 per cent over the next two years in the North-east.

And even if the UK economy starts picking up in 2014, the North-east’s average growth in workload over the next five years without government intervention now will be only 0.5 per cent against 1.4 per cent expected as a UK average.

The Chancellor has highlighted the Tyne & Wear Metro and electrifying of the Transpennine Express as benefiting the region, however CECA does not believe either will see additional construction investment as a result of the autumn statement.

By comparison, it said, the North-west had more than £1bn worth of projects approved in the statement. The association belieces that work already under way in London on the Thames Link and Crossrail railway developments alone is expected at peak to generate up to £1.2bn worth of output, or up to six times more than the North-east’s infrastructure.

More than 20 transport projects are expected to be approved before Christmas by the government and it is believed the New Wear Crossing in Sunderland could be among them.

Sunderland City Council applied for £82.5m in Department for Transport funding under its expanded development pool of 45 local major transport schemes.

Northumberland County Council has also applied for £22.4m department funding for the £32m Morpeth Northern Bypass under its development pool bid.

CECA is forecasting that if neither scheme is given the green light, a further decline of 9 or 10 per cent will take place over the next two years in the North-east.

Mr Kell called on the government to bring forward its announcement of the remaining transport schemes to be backed. The Treasury has not confirmed when the announcement will be made.

He said: “The Sunderland and Morpeth projects are both able to go ahead immediately if the government’s share of investment is made immediately available.

“But should these two vital projects be blocked, we fear the long-term damage to industry employment in this region will take years to repair. I don’t consider it exaggeration to say three weeks remain in which to save the North-east infrastructure industry from further crisis.”

Readers' comments (1)

  • Its reprehensible that Mr Hague has also ignored his own back yard and cancelled the Completion of The A1M from Leeming to barton. It was all but ready to go when the tories canned it. It would employ 500 people and give a valuable boost to local economy and when finished complete a vital road link to the NE northernmost regions. Instead they have wasted £20M or more getting the project ready then scraping it !!

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