Spending Review leaves construction industry in upbeat mood

THE construction industry stands to be a major beneficiary of Chancellor Gordon Brown's latest Comprehensive Spending Review (CSR), with the the Construction Products Association (CPA) estimating that public capital investment in the industry will increase by up to £9 billion in the next three years.

In his Review, the Chancellor announced that an extra £25.5 billion of capital investment is planned for the next three years, equivalent to an annual rise of 13% from current levels. In contrast, current government spending during 2001/02 to 2003/04 will rise by only 2.5% a year.

Commenting on the Spending Review, Michael Ankers, chief executive of the CPA, said: 'We have suffered from years of under-investment in the basic infrastructure of this country, which is why we are currently at the bottom of the EU league table. The Government has finally acknowledged that capital investment is the key to long-term economic prosperity, and the decision that the focus of additional money now available should be on capital investment rather than current expenditure is particularly welcome.'

Mr Ankers also welcomed Deputy Prime Minister John Prescott's £180 billion Ten Year Plan for Transport, which makes available £60 billion for roads, £60 billion for railways, and around £60 billion for local transport.

'This plan recognizes that there is no quick fix to the scale of the transport problem and commits the Government to sustain the significantly higher levels of resources, made available for the next three years in the CSR, for a whole decade,' he said.

The £180 billion package, almost three-quarters of which will come from the public purse, includes £21 billion for improvements to the UK's strategic road network. This will embrace the widening of some 360 miles of motorway and trunk roads, including notorious bottlenecks on the A1, M1, M25, M3, M4, M5 and M6; the construction of 100 bypasses around those towns and villages most affected by road traffic; and 80 major trunk road junction improvements.

The 10-year plan also includes a pledge to resurface 60% of the 6,000-mile trunk road network with new, lower-noise surfaces. The Government has also said it intends to complete within the next two years the 40 projects brought forward under proposals announced earlier this year.

While all this undoubtedly represents the best news the aggregates and blacktop sector has had for some time, the CPA says concerns remain about the Government's ability to deliver such a bold transport programme.

'We have long argued that governments should be measured by the targets they achieve rather than the money they make available,' said Mr Ankers. 'In particular, road improvements and other major capital investment projects have in the past taken years to get off the ground because of protracted planning procedures.'

Moreover, with the prospect of two or three more Parliaments over the next 10 years, industry will understandably be looking for a positive assurance from all Parties that transport really will be treated an essential area for action and investment in future.