Industry needs to deliver improvements to benefit from budget promises

Julian Francis
22 November 2017

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The chancellor has delivered a decent budget for the construction sector - now the industry will need to improve its productivity and reduce costs to benefit, says Julian Francis.

In order to square a difficult economic circle in his budget, Phillip Hammond has called for a dynamic and innovative economy that will be based on a technological revolution to meet the needs of the UK today and in the future. 

Overall, this was a good budget for our industry with commitments to existing projects outlined in the national infrastructure and construction pipeline and some commitments to future spending that will build on the work that we have already done. 

The increase in the National Productivity Investment Fund to £31bn will provide increased resources that will help the industry move forward with greater cross sector engagement. This will also be aided by the announcement of £64m for construction and digital training courses which covers T levels, increased maths training and apprenticeships will help drive new entrants into our industry. 

Recognising the political implications of a growing housing gap in the UK, Philip Hammond announced a £44bn capital fund to invest in various housing schemes. Central to this will be the Housing Infrastructure Fund that ACE has been calling for since we published our housing paper over four years ago. We will also see a commitment to building five new garden cities. 

I have been having a number of meetings with the Treasury and key government departments calling for a commitment from the chancellor to investment in the economic foundations of the UK to generate the growth of the future. Having read the contents of the Red Book and having listened to the chancellor’s speech, I am delighted to see that this work has paid off. 

ACE has had some big wins, from the £1.7bn for the City Transformation Fund, support for local infrastructure development plans, £500m for increase digital infrastructure investment, reforms to CIL and Section 106 schemes, to allowing local authorities to bid to increase borrowing to invest in new council housing, commitments to Crossrail 2, further city devolution deals, approval of the East West Corridor from Oxford to Cambridge, and increased investment in housebuilding. 

Yet all this investment comes with a price tag attached for our industry. In conversations with Philip Hammond, he offered the following deal to us. He would continue to ensure investment in the infrastructure pipeline but we will need to improve our industry’s productivity. The chancellor is disturbed that costs in the sector remain too high and productivity too low in comparison to international competitors. ICE’s Project 13 will be crucial to our industry to achieve the results that will make our industry respectable in the government’s eyes. 

Today, the chancellor has moved to keep his side of the agreement, so it is now up to us to keep ours by finding new ways to improve our industry’s productivity to play our part in improving the overall UK economic position. 

Julian Francis is the director of policy and external affairs at the Association for Consultancy and Engineering.