Griffiths replaced as construction minister in post-election reshuffle

At the time of going to press, it looked like construction had a new minister in the wake of Labour's victory in the General Election.

Downing Street has not yet confirmed the portfolio, but it appears that Alun Michael was appointed as construction minister on Tuesday as part of the new Department for Productivity Energy and Industry, the replacement for the DTI. Michael would take over from Nigel Griffiths, who becomes deputy leader of the House of Commons – however it was unclear whether Michael’s parliamentary under secretary, Barry Gardiner, would assume day-to-day running of the portfolio. Should Michael assume responsibility, it would signify a promotion for the representation of construction. QSs had complained that Griffiths kept too low a profile during his tenure in the post in a recent survey (see QS News 29.04.05).

The ministerial shake-up also saw David Miliband take on the new job of minister of communities and local government. The role has been created to lighten the workload of the ODPM. Miliband, a Blairite, was minister for the cabinet office and prior to that, schools minister.

Yvette Cooper has been promoted to minister of state for housing and planning with the task of increasing housing supply as fast as possible. She was formerly a treasury adviser on public spending and is an ally of chancellor Gordon Brown.

The post election ministerial reshuffle came as the RICS predicted government spending on construction would continue unabated, despite fears over the state of public finances.

Construction spend should continue to rise irrespective of what happens to public finances

Milan Khatri, RICS

“Construction spending should continue to rise over the next two or three years irrespective of what happens to public finances,” said RICS’ chief economist, Milan Khatri. He cited the government's commitment in the 2005 budget to raise public sector investment spending, including construction projects, from 1.6% of GDP in 2004/5 to 2.3% by 2006/7.

Khatri said: “This represents a gross increase in investment spending of 31.4% or £12.2bn over two years and does not include spending through PFI. Despite the likely pressures on government finances, public sector construction projects should in theory be insulated from any department al cutbacks.”

The PFI would continue and likely accelerate, according to Khatri, in the emerging areas of social housing, urban regeneration and waste recycling, as well as in the traditional areas of health, education and defence. The RICS also predicted tax increases could be on the agenda and could slow down the housing market.