At the heart of the government’s Spending Review today was a commitment to developing the infrastructure of the nation. Planning and Building Control Today discusses what this means for the construction sector, as well as the challenges ahead…
The government has made no secret of the fact infrastructure lies at the heart of their plans for future.
In the run up to the Spending Review, Chancellor George Osborne made it clear there would be considerable focus on developing major infrastructure projects across the country. Some £100bn was set aside, including £15.2bn for the Roads Investment Strategy. This will see over 100 major projects to enhance, renew, and improve the network, as well as over 200 sections of network for cyclists.
Last month, the government also announced the launch of a new National Infrastructure Commission that would be led by former cabinet minister Lord Adonis. This independent body was set up to determine infrastructure priorities across the country and to hold the government—and successive administrations—to account for their delivery.
However, infrastructure faces a significant hurdle. During the 2008 financial crisis the construction sector was significantly damaged. Around 400,000 workers left the industry, which has had a knock-on effect for the past few years. A shortage of skilled workers has become a significant problem for the sector, with many contractors unable to recruit the necessary staff to complete projects. Earlier this month, Stewart Milne Timber System reported it had seen a monumental growth in demand for its products. The firm, which produces offsite construction and timber systems, has certainly benefited from a shortage of carpenters and other skilled workers, but to deliver the infrastructure projects promised by the government this cannot continue.
During the Spending Review speech earlier today, Osborne did reiterate his promise to spend on infrastructure and to ensure the nation was connected.
He said: “We’re devolving power across our country, and we’re also spending on the economic infrastructure that connects our nation.
“That’s something Britain hasn’t done enough of for a generation. Now, by making the difficult decisions to save on day to day costs in departments, we can invest in the new roads, railways, science, flood defences and energy Britain needs.”
The operational budget for the Department for Transport will fall by 37 per cent, but Osborne said transport capital spending will increase by 50 per cent, reaching a total of £61bn. This represented, he said, the biggest increase in a generation.
“It means the construction of HS2 to link the Northern Powerhouse to the South can begin. The electrification of lines like the Trans-Pennine, Midland Main Line and Great Western can go ahead.
“We’ll fund our new Transport for the North to get it up and running.”
He also unveiled £11bn investment in transport infrastructure in the capital, as well as £300m for cycling routes.
“And we will be spending over £5 billion on roads maintenance this Parliament, and thanks to the incessant lobbying of my Honourable Friend for Northampton North, Britain now has a permanent pothole fund.
“We’re investing in the transport we need; and in the flood defences too.”
Chief Executive of Association for Consultancy and Engineering (ACE) Dr Nelson Ogunshakin OBE said the statement from the Chancellor was a welcomed show of support for the industry.
He said: “The importance of infrastructure investment in the UK was summoned up in his statement that “we are the builders”.As the industry that does build the foundations that this country relies on we can only support his view of the needs to invest in the future of our country. ”
However, he raised concerns regarding the cuts facing the Departments of Transport and Energy and Climate Change, stating “this will impact on the ability to maintain the new infrastructure that he has committed to build with the expansion of their capital expenditure budget.”
Infrastructure is undoubtedly key for a number of areas the Chancellor is keen to push. This includes creating a devolved, independent powerhouse in the north that can rival the south. To do this there must be a developed transportation system connecting the major regions in the north together, as well as with other parts of the nation. For the construction sector, significant projects like HS2 and investment in the roads network can only be good news. To do this, there needs to be a greater focus on other sides of the construction industry, namely apprenticeships and increasing the number of skilled workers.