In the Comprehensive Spending Review Chancellor George Osborne has committed to £50bn of capital investment in 2015 and a long-term £100bn infrastructure programme.
As previously announced in the March Budget th Chancellor said the government would reduce current spending by £11.5bn in 2015-16, allowing it to increase capital spending plans by £3bn a year from 2015-16 and by £18bn over the next parliament.The chancellor also promised to set up a £2bn a year local growth fund.
But the overall capital budget for the Department for Communities and Local Government (CLG) will fall from £4.8bn in 2014/15 to £3.1bn in 2015/16 – a cut of 36% year-on year and a fall of 26% compared to this year’s level.
Comprehensive Spending Review: PwC’s Engineering & Construction partner, Chris Temple, said: “There is no doubt that the recession and ensuing period of economic volatility has severely impacted the confidence and prosperity of the UK construction sector, We will need to see more stimulus and encouragement for the industry as part of the Government’s spending plans around investment for infrastructure and construction for this situation to change.
National Federation of Builders (NFB) welcomed support for infrastructure but called for more holistic approach to construction and growth.
Julia Evans, chief executive of NFB said: “The reduced budgets for local government and a much lower than expected Single Local Growth fund will frustrate efforts for regional recovery.
“We also need to see a more committed focus on restarting stalled projects which are preventing the construction industry from contributing fully to economic growth. The industry needs a more holistic approach, in line with Lord Heseltine’s review on growth, in order to be absolutely sure that the UK is doing its best to support enterprise, both large and small.”
Jon Poore, public sector director at Turner & Townsend, commented:”With its references to Britain’s past as the place ‘where the future was invented’, the Chancellor’s speech was long on vision, but short on detail. The Chancellor left many questions unanswered, including exactly which are his priority projects for infrastructure investment.”
Jeremy Blackburn, RICS Director UK External Affairs, said: “While austerity will be with us for years, action to deliver infrastructure and housing must be the focus of the here and now. The repair and maintenance of the transport and energy network and building of new homes should be Government’s first priority.”