Just when will the government wake up to the need to get the construction industry working again?

(The following is an excerpt from the NCE Magazine)

According to the NCE article at least £300M set aside to fast-track crucial transport improvements and boost the economy is languishing and remains unspent, NCE can reveal.

In November 2008, Chancellor Alistair Darling outlined his £20bn stimulus package designed to rescue the failing UK economy.

Of that, £1bn was specifically for transport-related schemes of which 700M was allocated to three projects: £300M for new train carriages and £400M going to the Highways Agency to fast-track Active Traffic Management (ATM) schemes and for dualling the A46 between the A1 and M1 (NCE 27 November 2008).

The remaining £300M for transport was designated for three road schemes and one rail scheme, which transport secretary Geoff Hoon claimed would “remove bottlenecks and increase capacity on road links to key airports and ports”.

NCE understands that this £300M remains unspent and projects vital to keep both consultants and contractors in business have not progressed significantly in the six months since the announcements. In some cases the money might not be spent for three years.

Contractors reacted angrily to the news. “The government accelerated infrastructure investment to support both the construction industry and the wider economy during the current downturn,” said Civil Engineering Contractors Association (CECA) national director Rosemary Beales.

“However, six months on from this announcement, the results have been a mixed bag at best. While there have been undoubted successes, such as the acceleration of the A46 scheme, most CECA members have yet to feel any benefit from this fiscal stimulus.”

RAC Foundation director Stephen Glaister added: “If the government wants to increase expenditure, then it must spend the money, putting it into the pockets of employers. The sooner it spends the sooner that money can be used. This does show the difficulty of ramping-up and a DfT spokesman said the schemes were not part of the700 fiscal stimulus money, despite appearing in the same DfT announcement. He said allocations relied upon matched spending from regional transport authorities to proceed: “They decide which schemes they would like to fund. These schemes must pass through a statutory process.”

Of the remaining monies, work on the A46 will begin next month, and Highways Agency chief executive Graham Dalton said in the introduction to the Agency’s 2009-2010 business plan, published in March, that the money earmarked for ATM would be brought forward for advance works and asset renewals.

So at least some of these projects will get started soon: The Waster

“There is much to be welcomed in this budget. The commitment to maintaining capital investment to 2012 will hopefully reduce the danger of a double dip recession occurring in the engineering/construction industry.

“Long-term, the principle of putting green jobs at the centre of a new low carbon economy is a sound one. Therefore, the extra money for offshore wind and other renewable projects, incentives for CHP and carbon capture technologies, and the introduction of carbon budgets is to be welcomed.

“However we need to ensure that the UK has the infrastructure to enable us to properly exploit these emerging sectors. So, the real question left unanswered in today’s budget is how we are to fund essential infrastructure projects over the long term?

“Though expensive, these projects have a very high rate of return for the economy as a whole, which will be important as the UK recovers. With the difficulties PFI and PPP projects are encountering in securing funds, now – more than ever – is the time to consider alternative funding methods.

“One idea strongly advocated by ICE would be to explore the establishment of a National Infrastructure Bank. This could plug some of the gap created by the credit crunch allow the cost of major projects to be spread over their very long operational life.”