The impact on civil engineering of the UK public’s decision to leave the European Union (EU) may be dramatic and civil engineers have an enormous stake in the result.
Civil Engineering Contractors Association (Ceca) chief executive Alasdair Reisner called for calm amid fears that economic upheaval triggered by the vote will badly hit infrastructure investment. Pre-vote, prime minister David Cameron had warned against the future of major schemes such as High Speed 2 (HS2) and High Speed 3 in the event of a so-called Brexit.
For that reason - and several others - most civils firms and their senior leaders were eager for Britain to remain in the EU.
Atkins chief executive Uwe Krueger was one: “The whole British engineering industry would be in a much more difficult situation if Brexit were to happen,” he said.
Arup London infrastructure head Tim Chapman also spoke up in favour of staying in: “All the predictions that we see indicate a slowdown in both property and infrastructure spending should Brexit take place,” he said. “Just when our construction industry seems to be becoming less affected by wild swings of the economic pendulum, this would be a big blow to UK construction.”
S&P Global Ratings went further: “It is said that perception is reality, and based on what investors are telling us, the reality is that a Brexit scenario could put long-term funding for UK infrastructure at risk,” said S&P analyst Michael Wilkins.
CecaA called on government to first stabilise the government and then re-establish its commitment to major projects.
“The UK must act to secure its economy, but growth will only be delivered if supported by world-class infrastructure,” added CECA head of external affairs Marie-Claude Hemming.
“Ceca therefore calls on ministers to now to first stabilise government, then re-establish their commitment to the projects outlined in the National Infrastructure Plan, most notably HS2 and a third runway at Heathrow in order to maintain economic confidence following such a substantial change in the UK’s relationship with the European Union and the rest of the world.”
Arcadis said it believed the government had learned its lesson from previous knee-jerk reactions to economic slowdowns.
“Decision-making in connection with key infrastructure may slow down as a result of changes to the government,” said Arcadis head of strategic research Simon Rawlinson.
“However, we believe that cross-government support of the National Infrastructure Commission’s long-term view of the UK’s investment needs will help to ensure that the right decisions are made in connection with critical transport spending.
“The long-term consequences of cuts made to transport spending in the emergency budget of 2010 will be felt for years in terms of construction industry capacity and the UK’s transport networks. We believe that this lesson has been learned by government,” he said.
However few senior engineers spoken to by New Civil Engineer were confident that this was the case.
“The reality is it is now two years before the government can get on with the job of governing and making decisions around major infrastructure,” said one.
EY’s UK infrastructure leader Malcolm Bairstow agreed: “With infrastructure so crucial to the UK’s growth ambitions, there will now be nervousness. There is likely to be a period of uncertainty which may impact decision-making around projects and overseas investment while details are thrashed out between the EU and the UK government.”
Aecom chief executive for UK & Ireland Patrick Flaherty agreed that business “inevitably now faces a period of disruption”.
“It is critical that the domestic agenda is not sidelined as the UK faces a minimum of two years of negotiations to leave the EU,” he said. “Focus must remain on energy security and energy independence, as well as progressing the UK’s ambitious infrastructure pipeline. Schemes such as HS2, Crossrail 2 and the Northern Powerhouse programme are vital to the country’s ability to compete on a global stage, which is more crucial than ever due to this referendum result,” he added.
EY’s Bairstow also raised concerns around working in Europe. “The industry may face challenges in exporting skills and expertise in engineering and consulting services if the pound weakens and if there are barriers to the European market,” he said.
The Institution of Engineering and Technology (IET), which issued a statement warning that leaving the EU could lead to negative impacts on UK engineering, has reiterated its concern that the referendum result will lead to a further skills shortage.
“We were very careful to consider the options as they related to UK engineering but the result of the referendum is clear and we are calling for an urgent discussion so that any negative impacts can be mitigated for the benefit of UK engineering and our country’s economy,” said Naomi Climer, IET President.
Meanwhile, Mott MacDonald, Atkins and others issued cautious statements on the referendum result.
”The consequences of the UK’s decision to leave the EU remain unclear, and as a business we will need time to assess the implications. How exiting the EU will occur or what UK’s future relationship with the EU will be is far from certain at this time. The fact is we are still in the European Union and will be for the next two years, so it remains business as usual. We will continue to work together with our clients in exactly the same way,” said Mott MacDonald chairman Keith Howells.
“We employ both EU and non-EU staff and have offices throughout Europe and the world. We are used to dealing with challenges and change, and given the diversity of our business we are confident of our ability to adapt to new circumstances as they emerge. We will see what happens in the next few months and will be ready to respond,” he added.
Atkins’ Krueger said it was “critical” that government remained focused on infrastructure during the exit period.
”It is critical that, during this period, the Government does not become distracted from the vital task of delivering the nation’s infrastructure and ensuring the future productivity and competitiveness of the UK,” he said. “Close attention must also be given to the maintenance and protection of our commercial and contractual links with Europe.”
Ramboll issued a statement reaffirming the company’s commitment to doing business in the UK.