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Falling local roads orders hit civils contractors hard

Soaring inflation cancels out spending increases from central government.

Contractors this week reported a major drop in workload for local road projects.

But the Civil Engineering Contractors Association (CECA) said that almost every other part of the civil engineering sector has boomed in the last 12 months.

CECA's latest survey of civil engineering workload trends was published this week.

Contractors have complained that local roads workload is 17% down on this time last year. The survey of more than 100 contractors also paints a gloomy picture for the year ahead with order books for local road projects 9% down on last year.

The drop is put down to a levelling out of local government road funding in the last two years as councils are increasingly raiding highways budgets in response to press on other services.

"The problem is that money for transport goes into the Single Capital Pot and gets raided for other services perceived to have a higher social need," said a CECA spokesman.

"We would argue for ring fencing of transport money."

UK Roads Board chairman Matthew Lugg agreed."We weren't getting enough money for local roads in the first place as settlements have plateaued in the last couple of years," said Lugg.

"But now there is so much pressure on other services such as dealing with our ageing population. The costs of waste management now as a result of the Landfill Directive are phenomenal."

Soaring construction inflation of around 7% was another major issue for the local roads sector as it had outstripped funding increases.

As a result, contractors' order books have been hit as the recent increase in funding for local authorities in the government's recent Spending Review amounted to just 1%.

Contractors can look forward to higher local authority spending workloads if the government gives the go ahead to up to eight 25 year PFI road maintenance deals now in procurement.

"We seem to be waiting forever and a day for these deals to come about," said Lugg.

"There are five bids sitting with Department for Transport at the moment."

In the meantime, Lugg urged more local authorities to put together Asset Management Plans to convince the government of the need for more road cash.

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