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Budget 2009: Civil engineers give cautious welcome to Darling's Budget

The Association for Consultancy and Engineering and the Institution of Civil Engineers have both welcomed Alistair Darling’s budget, which will see “historic” levels of capital spending continue to 2012 and £1.5bn given to green energy schemes.

ICE director general Tom Foulkes welcomed the commitment to maintaining capital investment to 2012. After this point Darling pledged to peg spending at 1.25% of GDP - twice the level of spending of 1997.

“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.”

The Association for Consultancy and Engineering (ACE) gave a cautious welcome but said the government must give much clearer details of its spending plans if it is to tackle the serious challenges facing a construction sector reeling from the current recession.

Green issues figured prominently in Alistair Darling’s Budget, with £525M pledged towards offshore wind projects and £435M support for energy efficiency schemes. Announcing the government’s plans for the UK to grow, rather than cut its way out of recession, Darling said he was presenting the world’s first ever carbon Budget, which committed Britain to cutting carbon emissions by 34% by 2020. Darling said that his plans would “give industry the certainty needed to develop and use low-carbon technology-cutting emissions and create new business and jobs”.

“Long-term, the principle of putting green jobs at the centre of a new low carbon economy is a sound one,” said Foulkes. “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?”

Foulkes said the answer was the ICE’s idea 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,” said Foulkes.

The ACE said it particularly welcomed the following Budget measures targeted at business:

  • A £750M Strategic Investment Fund for advanced industrial projects – one third of which will be earmarked for low-carbon projects;
  • £600M for building new homes on dormant sites;
  • A further £600M to increase housing supply;
  • £4bn of European Investment Bank funding for renewable and energy projects to help remove blockages in project financing;
  • A top-up scheme for trade credit insurance.

ACE chief executive Nelson Ogunshakin said he “applauded” the government’s green intentions but added that the devil of the chancellor’s Budget could lie in the detail.

“It is clear that sustainability is near the top of Mr Darling’s list of priorities and that’s a good sign,” Ogunshakin said. “But we need to see how these plans will be implemented before we can judge their effect on our industry and the wider economy.

“The government needs to be much clearer about its intentions,” said Ogunshakin. “When it says investment in combined heat and power will be brought forward, the industry needs to know where from. With the funding measures to build more homes, spending £400M on unlocking thousands of dormant sites, how will that unfold? We appreciate that such measures are in the pipeline but our industry needs increased investment now, not later, if we are to tackle the severe challenges facing us in a recession.”

On the efficiency agenda, where the government plans to save up to £5bn through value for money savings, Ogunshakin said: “The mooted additional efficiencies in procurement must be worked through systematically. How are we going to achieve these efficiencies? ACE supports the concept of getting better value for money but the chancellor’s plans have to be delivered quickly and without compromising quality of delivery.

“ACE looks forward to meeting with the relevant government departments to discuss the more specific points of this Budget and how the consultancy and engineering sector can help them to target their investment wisely, with prudence and for the benefit of the UK economy as well as our industry.”

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