HEAD OF TRADE ASSOCIATION SLAMS CUT BACKS TO PUBLIC SECTOR BUILDING PROJECTS
18 July 2012 – The latest statistics issued by the Office for National Statistics piles even more woe on the UK’s beleaguered construction industry. The output figures show that between March and May UK construction output was down 7.4% over the same period of last year. The figures reveal that the main drag on output was a fall in new public sector work, down a staggering 22%, reflecting the ongoing impact of Government spending cuts. At the same time a new survey published by Constructionline, a pre-qualification certification scheme for contractors and consultants, found that one in four public sector clients, including 35% of local authorities, are likely to cancel construction projects over the next six months with a further quarter set to ask their supply chain to slash prices in a bid to save money.
Responding to these alarming figures, Blane Judd, Chief Executive of B&ES (the Building & Engineering Services Association), said, “These draconian cut backs on building projects by the public sector are totally short sighted and will have a profoundly negative impact on GDP. There is plenty of evidence to show that investing in infrastructure projects is one of the few areas where there is still a good return on investment as research by the UK Contractors Group (UKCG) has shown – the construction industry has one of the highest multipliers of any industry with every £1 invested in construction generating £2.84 in economic value.
“Almost the last thing the construction industry wants to hear right now, given its fragile state and with profit margins pared to the bone, are public sector clients looking to slash prices. Another short sighted approach as you cannot simply slash prices without compromising quality – prices that are not realistic for the work to be undertaken may lead to higher long-term maintenance or repair costs.
“The Government should bear in mind that last year the UK construction industry was estimated to be worth £91 billion to the UK economy, with a total workforce of over 2 million, 6.6% of all jobs. Just the sector we represent – building engineering services – employs 613000 people, is worth £20 billion to the UK economy and at any one time is training 18000 apprentices. So we urge the Government to reverse these current and impending actions by the public sector and take immediate steps to increase investment in public sector building projects and give a desperately needed boost to the construction industry.
“Let us also be perfectly clear that these short term actions by the public sector will inflict further damage to what is an already highly depressed construction industry and will further erode its ability to retain talent and rebound from this prolonged recession.
“One of the likely long term consequences will be foreign labour skills being imported into the UK economy due to a lack of skills investment and retention, leading to high levels of unemployment as we emerge from this financial crisis.
“We therefore implore the Government to work with the public sector, including local authorities, to increase not cut infrastructure spending as it surely recognises that this is one of the few areas of the UK economy where the client cannot pick it up and take it abroad or where it can’t be made abroad and imported into the UK”.
For more information about B&ES and the services provided by its members visit http://www.b-es.org.
Ends
Issued on behalf of the Building & Engineering Services Association (B&ES) by Next Step Marketing Ltd
Media enquiries to: Heather Lambert. Tel: 44(0)1256 472020;
Fax: 44(0)1256 471010; E-mail: heather@nextstepmarketing.co.uk
Note to Editors
Since its formation in 1904, B&ES, the Building & Engineering Services Association (formerly the HVCA) has represented the interests of companies engaged in a wide range of building and engineering services disciplines.
B&ES helps its members to build successful businesses by being the leading trade association for integrated building and engineering services and renewable technologies. It is a unifying force that promotes and monitors excellence; provides quality advice, guidance, training and support; generates market-leading thinking; and shapes the commercial environment through active representation.
B&ES members are subject to regular, third-party inspection and assessment of their technical competence and commercial capability, carried out by an independent certification body at least every three years.
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