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Keep the cash flowing when the good times return

One year on from the start of the global financial crisis and the talk this week is all about the need for sustained cuts in public spending.

Realistically we all know that no matter how many of the few remaining public assets are flogged off and no matter how many clever tax mechanisms are introduced, the only thing that is certain is that public spending will have to fall over the next decade.

While the political debate rages across Westminster over the precise style of these cuts, the scale of the public bail out for banks means that whatever your party colour, the coffers are near empty.

The good news, as we heard at this week’s FIDIC conference, is that there is hardly a government around the world that hasn’t committed huge amounts to sustained programmes of infrastructure investment in a bid to stimulate economic recovery.

“There is hardly a government in the world that hasn’t committed huge amounts to infrastructure investment.”

Such packages reportedly include £152bn in UK and Europe, £339bn in China and £296bn in India. In comparison to the usual level of infrastructure investment seen in these countries, these are huge sums.

And as FIDIC’s newly published State of the World report points out, these levels of spending are still miniscule compared to the actual amounts needed to bring world infrastructure up to modern sustainable standards.

But while there can be no doubt that investment in engineering is a better long-term bet than investment in banking, there is still debate over whether it is the right solution to our global recession.

In fact, as the FIDIC conference also heard this week, economic stimulus investment could actually be bad for the construction industry. After all, any policies that reinforce the notion that we only need to spend money on infrastructure during a recession should be treated with extreme concern.

“After all, any policies that reinforce the notion that we only need to spend money on infrastructure during a recession should be treated with extreme concern.”

So given that the boom-bust cycles of the past have left the UK’s infrastructure in a pretty woeful state, we need to act with care. Yes, we need to continue to champion sustained investment in infrastructure now, but we also need to ensure the levels of investment continue when the good times return.

Which brings me to a footnote about the government’s chief construction advisor. The deadline for applications to the post is next week − 23 September.

For the record, the salary is £120,000 for a notional three-day a week job and the likely candidate will probably be both an engaged and accomplished practitioner and a “person of influence”, according to Construction Industry Council chairman Keith Clarke, who will sit on the selection panel. So if you are interested in the role now is the time act.

“The new position of chief construction advisor gives us a key opportunity to move construction up the clients’ agenda,” said Clarke. “We need the best person possible for this from the private sector. We will get what we deserve if we don’t encourage individuals to apply.” You have been warned.

  • Antony Oliver is NCE’s editor

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