The new austerity begins now

But it’s taken only a few hours of David Cameron in number 10 for the implications of the new era to sink in. As we report, all Building Schools for the Future deals that haven’t reached preferred bidder stage are about to be stopped pending a review of the programme and wider government spending. No new local education partnerships – the joint ventures of contractors and local authorities that work on big schools packages – will be formed, and existing ones will be asked to prove they are not wasting money. It’s only a matter of time before the Treasury sends the boys round to other departments. We’re not just talking about a few cuts to public spending here, we’re talking about a rethinking of the very mechanisms of procurement.

What isn’t clear is how durable the coalition will prove to be. It has a working majority and a clear intention to govern for all five years of a fixed-term parliament, so businessmen and bankers can plausibly expect policies to last for long enough to draw up short to medium-term plans on the basis of them. On the other hand, it usually takes a world war to get these two to share a government, and cohabitation is likely to be a strain for both. What may keep them together in the end is the prospect of being punished if they are perceived to have acted badly; if nothing else, that should bring more stability than looked likely a few days ago.

There are a few areas of policy agreement. Both parties are more opposed to regulation than Labour, and that bodes well for housebuilders – but it will have little net impact if the localism agenda that is common to Cameron and Clegg prevents firms from winning planning permissions. The housing recovery is fragile, so it’s vital that with cuts upon us in the public sector, we don’t erect barriers in the private. Both parties have made a fuss about their commitment to the green agenda. Paul Morrell, the government’s chief construction adviser, is chairing the panel looking at how contractors and consultants can help decarbonise the economy, and his eventual report is likely to increase the industry’s political visibility. Let’s just hope he is allowed to finish his work. There’s good news, too, on an area of policy disagreement: the Lib Dems have agreed not to oppose the commissioning of nuclear power stations.

We’re not just talking about a few cuts to public spending here, we’re talking about a rethinking of the very mechanisms of procurement

As we went to press the Cabinet was still being named, and many areas of policy were as clear as mud. But we can expect a Conservative manifesto tempered by Lib Dems’ preferences rather than the other way round – Vince Cable may be looking after the banks, but George Osborne is in the Treasury. That means that cuts will be early and deep – the Tories are pressing ahead with their plans to save £6bn this year, which is largely expected to come out of big IT projects and “efficiencies”. Although we should keep our cynicism under control, it’s obvious that the least painful way to make “efficiencies” is to abort capital projects that haven’t had the go ahead; as we’ve seen with the moves to suspend school spending, next year’s budgets are being decided now – and we’re in for a bumpy ride.

That said, much coalition policy is still open to influence, which it wouldn’t be if the Conservatives had won an overall majority. So the industry should put forward its arguments for reducing the deficit without sending construction into a double-dip recession. We’ll be putting forward the responses from our Charter 284 campaign – so please sign up to it before we do (www.building.co.uk/charter284). We’ve got less than six weeks to present a case to Osborne before his emergency budget. The industry’s lobbying power is more important now than ever before.

Denise Chevin, editor