Small relief as Chancellor acknowledges construction’s role

The Construction Products Association breathed a very small sigh of relief yesterday at the news that the Comprehensive Spending Review cuts to public sector construction spend are expected to be £3.5bn less than was announced at the time of the Emergency Budget.

Public sector capital spending which had been expected to fall by 35% over the period of the Comprehensive Spending Review will now fall by just over 30%.

CPA chief executive Michael Ankers said: “We knew this was going to be a difficult Review as far as construction was concerned. However, the Chancellor has, acknowledged the important role that capital spending on construction can play in helping to provide for a private sector-led economic recovery. In particular maintaining transport investment at £30bn over the next four years will sustain employment and help encourage private sector investment.”

However, he points out public sector investment in construction over the next four years will still be more than £20bn less than in the last four years, a figure which will have significant consequences for the construction industry.

“We hope that following today’s announcement there will be a recovery in confidence in the private sector now the uncertainty surrounding the CSR is out of the way. We welcome the support for the Renewable Heat Incentive as a contribution to improving the energy efficiency of our existing building stock. Where we urgently need greater clarity, however, is the mechanism to encourage investment in private housing and this will not happen until we have agreement over the New Homes Bonus incentive and reforms to the planning system.”