Spending in construction 'stays at home'

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The position of the construction industry as a driver of economic growth was discussed at a fringe event at the Conservative Party conference in Birmingham on Wednesday.

Speaking at an event hosted by the National Federation of Builders, Julia Evans, chief executive of the trade body, stressed the important contribution made by construction to both the UK's GDP and employment.

"The construction industry has low levels of imports, so any spending in the sector stays at home," she said.

Evans added: "For every £1 spent on construction, £2.84 returns to the economy."

Robert Buckland, MP for South Swindon, took a slightly different view, stating that while construction "would play its part", it would not be the engine of the recovery. He called on banks to do more to start lending to homeowners.

Anne-Marie Morris, MP for Newton Abbot, recognised the role played by the construction industry as the "backbone" of the UK economy, and the severity with which the recession had hit the sector.

However, she said that in the future the industry could not rely on public spending to the same degree. Morris predicted that there would be much greater partnership between the public and private sectors.

Steve Vickers, managing director for urban design at Birmingham City Council, explained that Birmingham had entered into long-term partnerships with construction firms – including SMEs – which had improved the quality and price of programmes and boosted training.

"These frameworks could be used to support SMEs and give them the certainty they need to invest," he said.

Addressing the role of the small and medium-sized firms which made up the bulk of the industry, Evans said that these are "well-embedded" in their communities, employing local people and using local materials.

Evans called on the government to "resist any policy which stifles SMEs", arguing that they are at the heart of the economic recovery.

"The health of SMEs are the health of the nation, and we ignore them at our peril," she told the Birmingham audience.

Evans highlighted the impact of the cancellation of the Building Schools for the Future (BSF) programme, the continuing uncertainty over the future of regional spatial strategies, and the impact this had on housebuilding.

"The government could help by reforming procurement methods, in particular reviewing the use of pre-qualification questionnaires (PQQs)," she said.

In response to the cancellation of BSF, Evans called on the government to not only "look at the upfront costs of building projects", but to consider the value returned to the community.

Mark Pawsey, MP for Rugby, said the cancellation of Building Schools for the Future could be addressed by "making better use of the existing stock through modernisation".