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Putting the case for construction

Construction is facing an uncertain decade.

After more than 10 years of sustained growth, the industry has been struck down by the worst recession since the Second World War and now waits to find out just how hard a knock it will be forced to take when the Government moves to cut its borrowing.

While intense debate on public spending continues, one message that doesn’t always get across to politicians of all parties is the clear social and economic benefits the construction industry provides.

“We all need to sell [ourselves] more,” Balfour Beatty group managing director Mike Peasland says.

Many politicians simply don’t understand construction. They don’t understand the huge ripple effect it has across other sectors, and across communities.

As the election approaches, Construction News is launching a campaign to raise the profile of the industry to both MPs and prospective MPs - to get the construction message out there and explain why cutting capital expenditure isn’t the easy option.

We also want to help politicians realise the industry can assist them in achieving their political objectives, whether at a national or constituency level.

CN has drawn up eight key messages for parliamentary candidates (see http:www.cnplus.co.uk/election2010). Some will help them scrutinise ministers’ decisions. Some will win them votes. All should help those in positions of power to make better decisions.

We will today be sending our campaign agenda to more than 2,200 prospective MPs. But we don’t want it to stop there.

In the run-up to the general election we want to invite CN readers to take part in our campaign; to contribute your thoughts on what you think politicians need to really understand about construction; to take these and more localised messages to the prospective parliamentary candidates in your area; and to make the case for a more intelligent debate on construction that is not simply a demand for sustained public spending.

The upcoming general election will see record numbers of new MPs enter the Commons. These are the people construction that needs to sell its story to.

“The perennial problem construction has always faced has been shyness,” WYG chief executive
Paul Hamer says. “The industry has a backward ability in coming out and explaining some of the fantastic things it is doing.”

Mr Peasland adds: “The main hurdle we face is the disparate nature of the industry. We have so many trade associations and professional associations that we are too fragmented to be a strong voice. However we can now prove that for every pound spent on construction, the economy benefits by £2.84. We all need to sell that fact more.”

Mr Peasland’s reference is to a report by economic consultant LEK, commissioned by the UK Contractors Group, which found for every £1 spent on construction output, a total of £2.84 is generated in total economic activity.

The study concluded that: “Government investment in construction is the most beneficial use of stimulative public expenditure in both the short and longer term, and any reduction in construction expenditure would have significant, immediate and enduring negative consequences for the UK.”

“Construction makes a huge contribution to employment and the wealth of the nation,” Shepherd Construction business development director Gary Edwards says.

Nevertheless, concerns have been raised across the board in recent months about potential spending cuts. Transport-related funding is uncertain, and the major upgrade of the schools estate is hanging by a thread.

Cost cutting

Noone knows exactly how Tory plans to strip the Infrastructure Planning Commission of its decision- making powers and embrace “localism” will affect expected major investments in nuclear and wind energy, and carbon capture and storage, but contractors are understandably nervous.

Housing is also facing a potential fork in the road. The recent work of the Homes and
Communities Agency has helped to buoy housing numbers, but starts are still half the 250,000 the Home Builders’ Federation says are needed each year.

Housebuilders are also facing huge demands in terms of green and affordability targets.
Home Builders Federation spokesman Steve Turner says: “We need MPs to understand the clear social and economic implications in boosting housing supply. And we need some realismin what central and local governments demand of housebuilders.”

Travis Perkins finance director Paul Hampden-Smith also believes some politicians fail to understand the detrimental effect complex planning laws have on new residential developments.

“The current planning laws are a real hindrance to building new houses and they need reform. Building houses has to be made easier,” he says.

Constituency benefits

Trade organisations have been, and will continue, to run events with candidates in a bid to push the case for construction.

But contractors are also being encouraged to get themselves out in front of local MPs to explain how their constituency benefits from construction.

Mr Edwards says: “If I could get my MP to understand one thing about construction it would be its contribution to the economy. I would confront them with the brutal facts - that construction is rising to 10 per cent of GDP.

“I believe that if you turn the tap off and stop building then you will add more problems to the macro economy.” Mr Hamer’s local MP is shadow chancellor George Osborne, who has vowed to announce details of spending cuts in the autumn if the Tories win the election.

Mr Hamer adds: “If I could talk more with my MP it would be to try to get him to understand the impact that reduced workloads in construction has on the many walks of life you do not necessarily make the connection with.

“Once you stop investing in infrastructure you affect so many areas. The thread of the supply chain in construction is so varied. A continued reduction in spending will make a big impact on the country’s ability to recover from the recession.”

But the CN agenda isn’t about pushing for more, or even sustained, public spending - or
contrary policies for the sake of it. What it aims to do is inform candidates, who may soon be in decision-making positions, about the key needs of what is a very important industry to the UK.

UKCG chairman James Wates says: “Everyone is clear that the level [of public spending] must
be reduced and there will be some tough decisions for politicians to make. About 40 per cent of our business comes from the public sector and so construction will not be immune from these decisions. It is important therefore that those making the tough choices are well informed.”

So join our campaign, and let’s get all MPs backing construction.