Growing pains

How you view this week’s Budget statement depends on whether you believe it is just Tory ideology or think the public sector needed a kick up the backside (see our Budget coverage for an analysis of what it all adds up to for construction). It was trailed positively from the outset, as the bulk of the bad news had already been buried in the Comprehensive Spending Review at the end of last year. This time the message was simple but effective: the country needs to move from recovery to growth, but there’s to be no giveaway - or any new money, come to that. There will be no increase in capital spend from its low base. After all, there is a key set of market drivers that are simply out of the government’s control, such as the impact of war in Libya, global political unrest and oil price hikes. The plan is focused on turning private sector confidence around and getting development, along with the rest of the economy, moving in the right direction by greasing the wheels of the local government machine.

Osborne’s underlying principle is that we’ve got to operate with a new sense of realism as well as a new cost base, and then be happy with our lot. In return, the government will make life easier for business and instill confidence by stimulating a few percentage points of growth from now until 2015. How? With new initiatives and language. Radical planning reform will see a “presumption in favour” of sustainable development and an onus on local authorities “to say yes”. There will also be new local enterprise zones, more apprenticeships, tax breaks, green initiatives - but, controversially, the zero-carbon home targets have been watered down - and finally there is a major boost to housebuilders with the offer of a home equity subsidy to first-time buyers. Is it enough? Well, optimistic growth figures have already been written down by the government. It’s now up to developers to test the system and see if the rhetoric can work in practice. So it’s a start, but the dark clouds are far from lifted.

Nuclear hiatus

It’s an old debate re-ignited by the catastrophic events in Japan, and now the issue of nuclear new build and the security of our islands’ energy supply has been elevated to the top of the political agenda. Just as the first nuclear new build contractors in the UK are selected and the possibility of up to 10 new reactors is raised by government, the whole process is put on hold. What’s at stake is up to £50bn worth of work until 2025 and, according to the anti-nuclear lobby, the country and environment’s safety. The government has been prudent in announcing a review of the process and (see our news analysis) there are technical and design considerations to be better understood from the Fukushima disaster. The arguments surrounding safety, expense, efficiency and alternative renewable energy will no doubt continue to rage - especially as water in Tokyo and food from near the site begin to show levels of radiation and public health may be at risk. The UK government won’t want nuclear to become an election issue - or to upset the business vote along the way - so it’ll have to take a position soon. But until the autumn at least, expect political paralysis as well as delay, delay and more delay.

Tom Broughton is brand director for Building