“If the country needs it, we will build it”. The words of a new Chancellor announcing his first budget that had been eagerly anticipated by a UK construction sector desperate for some good news and inspiration.
The Prime Minister called it the ‘Infrastructure Budget’ as the government promised the ‘biggest programme of public investment ever’ – £600 billion over the next five years into infrastructure.
This all sounds like good news for the sector, but without any more detail it’s very difficult to get a clear picture of how this translates into projects on the ground that boost growth in the sector. The hope is that when the delayed infrastructure strategy announcement finally arrives in late Spring it will deliver the specifics. It’s worth noting also that whatever changes are planned for the Treasury Green Book will also impact decisions on major investment and we await this announcement also.
Whilst it’s difficult to tell how much of the projects announced are new money, rather than expenditure already committed, the budget certainly looks very positive for the construction sector and on the face of it should be welcomed.
However, it comes at a time when the economy is plunging down a steep COVID 19 slope with no one able to predict when the momentum will slow and the world will start to return to normal. It has the potential to severely undermine any government’s best efforts to protect its construction sector. Some economists predicted that even with the budget spending plans, emergency interest rate cuts and promised tax cuts, the sector is unlikely to see any growth of more than 1% this year. It is inevitable that staff will have to self-isolate for significant periods of time and that will have added impact.
Just when it seems the industry had some good news from a budget to inspire a much needed step forward, mother nature looks like pushing it back two steps with an unprecedented health emergency.
The government needs to keep its promise and follow up an optimistic budget with detailed plans for delivery and financial measures to mitigate the impact of COVID 19.