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Engineers give cautious welcome to spending review

Civils contractors and engineers have welcomed the recognition that improving the UK’s infrastructure would help drive growth in the economy.

The Civil Engineering Contractors Association has cautiously welcomed the annoucement.

“We await the detailed announcement next week by the secretary of state of exactly what cuts have been made to transport projects. However, the chancellor has made it completely clear that he links investment in infrastructure with economic growth,” said Civil Engineering Contractors Association national director Rosemary Beales.

“We also welcome the reduction in the cut to capital spending that was envisaged in the June Budget Statement and the announcement that the Green Investment Bank will be established is good news for the delivery of the low carbon economic recovery,” she said.

But Beales said the communities and local government budget has been hit “quite severely” and that it is hard to see how this will help the wider construction industry.

“I am still concerned that we are at risk of substantial job losses in the infrastructure sector over the next few years and the issue that we face as a country is sustaining an economic recovery which depends on businesses and communities having access to effective and efficient infrastructure. Today’s announcement is positive, but we need more than this to be confident Government is addressing both of these significant questions.”

The ICE has also cautiously welcomed the review.

“Given the scale of the budget deficit, we expected some infrastructure projects to take a hit in the spending review, but remained hopeful that Government recognised the value of continued investment in our transport, energy, waste, flooding and water infrastructure – in meeting environmental targets and boosting our economy and quality of life. Encouragingly, this appears to be the case,” said ICE director general Tom Foulkes.

“Despite downward pressure on departmental budgets across the board, the government has resisted the temptation to compromise projects with the potential to kick start economic recovery and drive the low carbon agenda such as Crossrail and CCS.

“Upscaling of renewable energy and low carbon technologies are crucial if we are to avoid a ‘dash for gas’ response to the growing energy gap in future. However what industry needs now to push forward with these vital programmes is more clarity, for example how the £200M set aside for offshore wind technology and manufacturing at port sites will be allocated.  

”The acknowledgement that efficient transport infrastructure is key to our economic recovery is also welcomed. However the yet to be announced detail on precisely how the overall 21% reduction to transport spend will affect project delivery and maintenance funding will reveal the real picture.

“Clearly there is a pressing need to unlock multiple funding sources to ensure that going forwards, infrastructure continues to get the capital it needs despite spending cuts. A Green Investment Bank has huge potential as a core funding source and it is a concept we support, but worryingly the initial fund has been halved and its start up could be years away. The plans also lack detail on if and how this bank will operate in a way that reflects the scale of the challenge - £40bn - £50bn investment per annum by the Governments own estimate.

“The GIB should be a proper, permanent bank with a long term strategic remit to help create certainty for private investors and lever in the required volumes of private investment.”

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