Pre-budget cuts in capital spending disappoint Construction Products Association

9 December 2009

At a time when the country needs a stimulus to help the economy recover from the sharpest economic downturn since the 1940s, it is disappointing that today's Pre-budget Report has reaffirmed there will be a dramatic cut in government capital investment over the next four years.

Responding to today's Report, Noble Francis, Economics Director at the Construction Products Association said: 'With the construction industry facing a decline in output in 2009 of nearly 15 per cent, the largest single year fall since the War, it is extremely disappointing that the government has confirmed capital investment will fall by 50 per cent over the next four years, especially given its stated commitment to boost investment in national infrastructure and skills. For every £1.00 of the investment now being cut, an additional £2.84 would have been generated in economic activity creating much needed jobs throughout the country, according to the recent high profile report on the construction sector prepared by LEK Consulting.'

However, the Association welcomes measures to help improve the energy efficiency of the built environment and in particular the widely trailed Boiler Scrappage Scheme, which is a small step in the right direction. 'Although tackling 125,000 boilers is a welcome start, there are nearly five million boilers currently in use with a permanent pilot light, so if the government is to live up to its ambition to maintain leadership in the low-carbon sector, the scale of the problem that needs to be addressed remains considerable.'

Other measures such as extending the warm front scheme and encouraging wider use of renewables are also to be welcomed but unfortunately they do little to enhance the government's stated ambition to maintain leadership in the low-carbon sector.

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