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Autumn Statement | civils sector gives cautious welcome to infrastructure spend

30 Nov 11 The anticipated boost to infrastructure spending, confirmed in Chancellor George Osborne's Autumn Statement yesterday, was welcomed by the construction and civil engineering sector.

Construction Products Association chief executive Michael Ankers said: “Schemes like the improvement to the A14 trunk road will improve access to key ports from our manufacturing heartland and help our export drive. At a time when construction output is falling and forecast to continue to do so for the next couple of years, the additional investment on infrastructure will help create new jobs and generate as much as £75 billion of economic activity across the economy as a whole.”

But he warned: “Today’s announcements, however, do little to reverse the sharp fall in government capital spending – from £62bn in 2010/11 to £45bn in 2013/14. The most important step for the long term is to underpin investment on infrastructure with private finance and so the announcement that an additional £20bn of funding from pension funds and capital markets is particularly welcome. Funding of this kind will help create a long term sustainable framework for investment in our infrastructure which is set apart from the vagaries of government spending cycles.”

The Civil Engineering Contractors Association (CECA) welcomed the publication of THE National Infrastructure Plan 2011, and Chancellor George Osborne’s description of his autumn statement as “a huge commitment to overhauling the physical infrastructure of our nation.”

Director of external affairs Alasdair Reisner said: “Much of today’s autumn statement will be welcomed by infrastructure contractors. The shift from current to capital spending to release additional funding for infrastructure projects, and a continuing commitment from government to deliver private investment into the infrastructure sector, will enable the sector to play its part in returning the UK to sustainable economic growth. These were all measures that CECA has called for in recent weeks.

He added: “Initial analysis of the Government Infrastructure and Construction Pipeline seems to suggests that it delivers upon many of the long-held aspirations of industry.

“The publication of such a pipeline will enable those working in the infrastructure sector to work more effectively, which will in turn help the government to meet challenging construction efficiency targets. In an otherwise gloomy economic climate this is a rare piece of good news, and we applaud the government for its introduction.”

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Paul Fleetham, managing director of Tarmac National Contracting and Middle East, welcomed the boost for road-building.

But he warned: “The Government’s focus on ‘big ticket’ new road schemes does not address the significant funding deficit for maintaining our existing local road asset and the long-term planning required to tackle future capacity issues.

“Any new highways schemes will be seriously undermined unless they are underpinned by well-maintained local roads. We risk ending up with a two-tier road system; one with high quality ‘Premiership’ toll roads that are comparable in standard to our European neighbours and another deteriorating road network that seriously jeopardises our future economic competitiveness and threatens to put the UK at the bottom of the league table for transport infrastructure.

“Bringing forward managed motorways schemes is a short-term solution to rising car usage and will fail to tackle long-term capacity issues. These schemes will also fail to kick-start the UK construction industry because much of the technology is developed by foreign companies whereas traditional construction techniques will favour home-grown business. It is accepted and reinforced by the OECD that spend on infrastructure has a net incremental benefit to UK GDP.

“We appreciate that funding for road maintenance is in short supply but we need Government to also look at new alternative funding models for the local road network. Tax increment financing for local authorities has not been fully pursued and I would also urge Government to investigate whether it is feasible to provide councils with their highways budgets over a five-year period. This approach can help them efficiently plan their expenditure to support and deliver their asset management plans.”

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