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Even leaner times ahead

Comment

Government's continued failure to invest in the nation's vital infrastructure is a disgrace.

And to once again try to dress it up as a '£1bn boost to national strategic roads' is nothing less than an added insult to the profession.

Outrageous yes, but is perhaps no surprise that capital investment in the UK's highway network has once again been decimated by the government.

After all, Gordon Brown's summer comprehensive spending review clearly pointed in this direction and left the Highways Agency little room to do anything other than lop schemes from its targeted programme of improvements.

The figures released by the Agency paint a sorry picture, with £400M missing over the next three years and £2bn gone from the original transport spending plan set four years ago. Looking at the specifics, we see a catalogue of long awaited and much prepared road schemes pushed roughly back on to the shelf.

It is good to see that £1.9bn is still planned to be spent on important projects such as widening the M1 and M25 motorways. But to abandon, delay or hand over to the regions many schemes that have been discussed and planned for decades is bad news.

It is particularly bad for an industry searching for workload predictability and stability. But the real disaster of this week's roads settlement is just how graphically it underlines the sorry state of relations between government and the industry.

For the consultants, contractors and suppliers that have, over the last half-decade, embraced the concept of early involvement, risk sharing, cost cutting, efficiency and partnership as part of the public sector delivery supply chain, confirmation of this latest about turn by government will have been disappointing to say the least.

And remember, the industry's woe is not limited to the transport. In the water sector we saw the regulator deliver his final price determination for 2005-10.

It too, is unlikely to fill consultants, contractors and suppliers with pre-Christmas joy.

Like the transport announcement, promises of big investment in water and sewerage belied the reality of prudence.

Yes, there is much to do, but the watch-words for the entire supply chain are do work quicker, with less disruption and for less cash.

Moving towards a spring general election, the message coming out of central government gets ever clearer: Infrastructure is important but it won't win votes, so don't expect spending.

Whether it is roads, water or the railways, the industry finds itself in the difficult situation of having to work for lower and lower margins, taking on more and more risk to deliver public service, while trying to win a share of performance bonuses at the end of contracts. Boom and bust has been replaced with a life on the bread line. A claims culture is being replaced by one of desperate battles for a share of capped rewards.

Let there be no doubt, the next few years are going to be pretty tough for civil engineers and construction professionals in the UK. And to survive, firms are going to have to look very carefully at their businesses and their strategies. When it comes to public works, the margin for error is reducing.

Competition is healthy. But the government should take care - continue squeezing and it may soon struggle to find enough firms willing to compete.

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