Disappointment at lack of short-term infrastructure investment

The construction industry reacted with disappointment to the chancellor’s Budget, which provided little in the way of short-term support to boost infrastructure.

George Osborne did announce £3bn in extra annual capital investment, but the boost - funded through cuts to departmental budgets - won’t happen until 2015, after the next election.

Osborne said the government would set out how the extra investment would be allocated in the 2015-16 spending review, to be unveiled in June, as part of a long-term capital investment plan.

However, Osborne did not provide any short-term stimulus with funding for smaller infrastructure projects, as many had called for.

The chancellor also failed to confirm any further projects would be underwritten through the £40bn UK Guarantees scheme, other than a guarantee of up to £75m to help raise finance for the partial conversion of the Drax coal-fired power station to biomass, which had been announced.

There was also no announcement over a finance deal for the £10bn Hinkley nuclear project, despite intense negotiations between EDF and Treasury in the lead up to the Budget over the “strike price” - the price that the government will guarantee EDF will receive for the energy generated by the power station - which is necessary to allow the scheme to go ahead.

Alasdair Reisner, Civil Engineering Contractors Association director of external affairs, said the chancellor had offered a “jam tomorrow” Budget that would “do little to boost growth through infrastructure provision before 2015”.

Duncan Symonds, UK head of infrastructure at global consultancy WSP, said: “It’s disappointing that the chancellor’s recognition of infrastructure as the ‘economic arteries’ of this country wasn’t backed up by more detail on the ‘how’ and ‘when’. ”