Chancellor should keep his eyes on the prize - an infrastructure-led recovery

Alastair Reisner
12 March 2014

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It is heartening to see that growth in the UK economy is forecast to gather momentum this year.

While there are many factors that have contributed to the recent upturn, it is clear that the infrastructure sector has played a key role in generating growth, and that the government has listened to industry as to the potential benefits of infrastructure investment for the wider economy. 

Last year, CECA’s Securing our economy: The case for infrastructure report demonstrated that a failure to invest adequately in infrastructure cost the UK as much as £78 billion every year in the last decade. If we are going to keep up with our international competitors, it is vital that we close this gap by sustaining recent growth in investment.

"The infrastructure sector will continue to rise to the challenge of driving growth in a sustainable recovery.'

Alasdair Reisner.

Funding, however, is only part of the picture. We must be able to demonstrate the value of any money that is spent. Too often inefficiency occurs due to uncertainty and volatility in the flow of investment. For this reason it is vital that we lock-in recent positive moves to provide better visibility and certainty of spending.

That is why CECA supports the current HS2 Bill, and welcomes the proposed strategic roads Bill which will soon be submitted to Parliament. If both can pass smoothly through Parliament they will give UK infrastructure suppliers greater certainty over the likely future shape of the sector. This in turn will allow companies to invest in the skills, processes and equipment that will deliver more efficiently.  

However with just over a year until the General Election, we recognise that time is tight for both to progress onto the statute books.  It is for this reason that CECA’s main call going into the Budget is not solely to the Chancellor, but to politicians of all parties to ensure that there are no delays in passing these Acts. 

We have also called on Mr Osborne to maintain focus on tackling shrinking energy capacity. The beginning of this century saw increased concerns over the prospect of power shortages, and many nuclear and coal powered stations are coming to the end of their lives - and will need to be decommissioned in the next decade. The government must continue to make the decisions that prioritise reliable and flexible generation, and ensure Britain maintains a mixed portfolio of conventional, nuclear, and renewable energy capacity.

Finally, none of this vital infrastructure will be delivered without a dedicated, capable workforce. The Chancellor must ensure that there is adequate support for a demand-led skills system, which responds to the evolving needs of businesses of all types and sizes. 

CECA believes that if the Chancellor takes these steps and maintains momentum, then the infrastructure sector will continue to rise to the challenge of driving growth in a sustainable recovery that delivers a resilient economy for the future.

Alasdair Reisner is chief executive of the Civil Engineering Contractors Association