Member News
ePolitix.com speaks to Simon Storer, communications and external affairs director at the Construction Products Association, about the government's Comprehensive Spending Review (CSR).
On October 20th, the Comprehensive Spending Review will unveil in detail the coalition government's plans for spending cuts during the life of this Parliament. What is the Construction Products Association hoping to see in terms of capital expenditure?
The Association has been pressing government to ensure that public sector capital investment does not fall below 2.25 per cent of GDP. This is not special pleading for the construction industry; studies show that investment below this figure will lead to a deterioration of the country's built assets. Such a relapse would inevitably harm the international competitiveness of UK business and result in higher long-term costs for future maintenance and replacement of these assets.
What would the Association like to see in the CSR in terms of long-term funding for UK infrastructure?
It is vital that government develops a clear programme for the use of funds from the Green Investment Bank to bridge the gap between the levels of public sector finance available and what the UK actually needs. The government's Strategy for Sustainable Growth, launched by secretary of state for business, innovation and skills, Vince Cable MP in July, recognises that to maintain our competitiveness and make the necessary move towards a greener economy, the country may need as much as £40-50bn a year of investment in key infrastructure, such as better transport links and green energy.
How can the construction products industry contribute to a long-term sustainable economic recovery?
Construction accounts for nearly nine per cent of the UK economy and employs more than two million people. Independent research by the authoritative LEK Consulting has shown that for every £1 spent on construction, £2.84 is delivered for the wider economy. Capital spending is therefore one of the most effective ways in which the government can invest to stimulate the economy and secure a long-term recovery. Or to put it another way, a healthy construction industry is synonymous with a healthy economy.
What is the current state of the construction industry?
Despite last month's ONS figures for construction output in the second quarter of the year showing a sharp increase of nearly nine per cent over the first quarter, the industry is still in a very precarious position. The figures show the strongest quarterly increase in output in nearly 50 years, but they flatter to deceive. Construction was particularly badly hit by the poor weather in the early part of the year and so the second quarter was always going to see a sharp pick-up. In addition, a number of public sector projects were started in the run-up to the general election, and this undoubtedly helped boost output in the spring. The picture looking forward is very uncertain.
In light of this so-called age of austerity, what can the construction industry do to help provide better value for money?
The Association would like to see government and industry engage in a constructive discussion to identify ways in which public spending on construction can deliver much better value for money, through, for example, improved procurement processes and a more integrated approach to projects. We hope they will take us up on this offer to discuss future opportunities for improvement.
For further information please contact simon.storer@constructionproducts.org.uk
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