Construction industry calls on Government to boost infrastructure

The heads of some of the country’s biggest building groups have called on the Government, in a letter published in The Daily Telegraph today, to use the construction industry to stimulate the economy.

The letter, signed by the chief executives of companies including Mace, Carillion, Severfield-Rowen, and Costain, says: “Even within current public sector spending restraint, there is more that could be done to stimulate construction and create growth – by speeding up decision making and finding new ways of financing construction projects. The construction industry has a part to play in this and is ready to deliver.”

George Osborne, the Chancellor, announced in last year’s autumn statement that he wanted to lead an economic recovery through pension funds investing in national infrastructure. A National Infrastructure Plan including £250bn of potential projects was drawn up.

However, there has been little interest from pension funds, and key projects – such as nuclear power stations, roads, railways and airports – are being delayed by a lack of clarity over Government policy.

The Government’s failure to deliver on its infrastructure promises also drew a stinging rebuke from CBI director-general, John Cridland, who has been one of the Coalition’s staunchest cheerleaders. He said implementation of the growth plan has been “really disappointing”, and asked: “Where are the diggers in the ground?”

Last night Mike Peasland, chief executive of Balfour Beatty’s construction business, who also signed the letter, said Britain risks missing out on overseas investment if it does not press ahead with the expansion of its airports and surrounding transport infrastructure.

“It’s a question of policy,” Mr Peasland said. “If you want Heathrow to be a proper hub that competes with Amsterdam Schiphol and Paris Charles de Gaulle airports then it must be expanded correctly or we will lose the opportunity for investment.”

The letter from the construction industry marks the start of a new campaign called “Creating Britain’s Future”, which is designed to highlight the importance of the sector.

It claims every £1 invested in construction generates £2.84 in economic activity, and the assets built “are vital to keep the UK economy competitive”. However, it adds: “Construction output is falling as the economy shrinks, government spending reduces and public sector projects are delayed.”

Paul Sheffield, the chief executive of Kier, and another signatory said: “The UK desperately needs new infrastructure. The Government had some great ideas but we are waiting for them to become reality.”

Mr Sheffield said the private sector is ready to back infrastructure projects but the Government must “act as a facilitator to get funds in place”.