Autumn statement: Infrastructure and net zero must not be sacrificed, says industry

Leading construction industry figures have urged the government to avoid heavy cuts to infrastructure investment ahead of today’s autumn statement.

Hunt is thought to be seeking to plug a £50bn black hole and the BBC has reported that the burden will likely fall more heavily upon spending cuts (~£35bn) than tax rises (~£20bn).

The heavy cuts expected have been the cause of much speculation within the media, with senior government ministers hinting that major government-backed construction projects could be reviewed.

Even if headline projects survive, broad-based austerity at every level of government could have a significant impact on regional infrastructure projects.

Noble Francis, chief economist at the Construction Products Association, said the statement would be a “difficult balancing act” for the chancellor and that “construction clearly isn’t going to be immune”.

He said stimulating housing and housebuilding demand and boosting retrofit of existing stock would help generate near-term growth and make progress towards net zero targets.

“Also, if government ensures that investment in infrastructure at national level and funding, through the Levelling Up Fund, for local projects, is not cut then this would provide enable growth and help to increase productivity across the country,” he said.

Suzannah Nichol, chief executive of Build UK, said she understood the need for “difficult decisions” on taxation and spending, but said maintaining infrastructure spending would be crucial for growth.

If we want a country with a transport network that enables goods and people to move around efficiently, an education and healthcare estate meets the needs of our population and enough homes, with energy saving measures in place, then the Government has to maintain its commitment to delivering its construction pipeline,” she said.

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“The industry has the capability and capacity to deliver this vital infrastructure, and we hear every day how much it is needed to enable other sectors and individuals to do their bit for growth.”

The Institution of Civil Engineers’ director of policy, Chris Richards, agreed that public infrastructure investment was “critical for economic growth and to meet our levelling up and net zero objectives”.

He urged government to think about infrastructure as an investment rather than a cost and stressed the need for a “clear plan” across all parts of government to “coordinate our net-zero efforts”, aligning infrastructure goals for net zero and levelling up.

“We need to focus more on reducing our energy demand and filling in the gaps in the Net Zero Strategy to decarbonise the power grid by 2035,” he said. “The net zero transition is affordable – delays and inaction are not.”

Jason Millett, Mace’s consult chief, also said investment and infrastructure and housing was critical and urged the chancellor to honour previous spending commitments on projects such as such as HS2, the New Hospitals Programme and policies to support the government’s ambition to build 300,000 new homes a year.

He also stressed the importance of “continued funding for low-carbon energy alternatives”, including new nuclear projects such as Sizewell C and small modular reactor innovation.

“As we enter the winter months, the need to build resilience in both energy supply and demand becomes more acute,” he said, encouraging the government to follow through on its manifesto promise to fund £9bn for retrofit.

Katy Dowding, executive vice president at Skanska, said if projects were on the line, she hoped the chancellor took a “wide angle” approach to assessing their viability, considering social value and carbon reduction benefits as part of “the total value each one can deliver to society, relative to their financial cost”.

Gleeds chair Richard Steer said the government was working on a “short-term survival basis until the next election” and urged them to ring fence funding for hospitals and care facilities.

“I would also want transport protected, with HS2 and Northern Rail being vital if we are to try and get cars off the road to meet our net zero targets,” he added, also mentioning energy and the construction of new power stations as “important stepping stones in the aim of the UK becoming energy self-sufficient”.