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Budget 2009: Civils contractors fear post-2012 spending crash

The Civil Engineering Contractors Association has warned that the 2009 Budget has failed to stem growing concerns among contractors that public spending will drop dramatically early next decade leading to an infrastructure “investment crunch”.

The Civil Engineering Contractors Association (CECA) has previously highlighted the possibility that once the fiscal stimulus period ends in 2010-2011, that public spending will decline sharply.

Projected current and capital budget figures in the 2009 Budget Report show spending will fall by over £10bn between 2010-11 and 2013-14.

Chancelor Alistair Darling has pegged capital spending to 1.25% of GDP post-2012.

Commenting, Rosemary Beales, CECA Director said: “An investment crunch is a serious concern for the civil engineering industry.

“We are currently experiencing a decline in workload across much of the sector and it is hoped that the during the period of fiscal stimulus, this situation will improve. However contractors need confidence about the medium to long term prospects for workload.

 “The Government needs to put forward meaningful long term plans in infrastructure investment to boost contractors’ confidence. The industry is not asking the Government to spend more on infrastructure at the expense of other services, but they must set out clear, comprehensive and costed plans for investment and ensure that workload will flow consistently for the foreseeable future.

“Without clear long term planned investment and a consistent flow of work, the next decade would seem to consist of wasteful stop/start spending at a time when the country can ill afford inefficiency in the procurement of essential infrastructure.”

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