Move comes as government publishes revised public building work pipeline

Ministers today set out plans to support the growth of UK tunnelling skills and a revised public building work pipeline against the backdrop of yesterday’s revelation that a sharp dip in construction output had dragged the UK economy into recession.

Cabinet Office minister Francis Maude was joined by business secretary Vince Cable to lay out plans to update and improve the construction pipeline, expand the idea into 12 other sectors, and publish a government-industry “procurement pledge”.

The announcement also laid out details of a pilot programme in the tunnelling sector designed to use the information in the pipeline to improve skills and efficiency in the supply chain. This follows an analysis that seven of the government’s 40 priority infrastructure projects, worth £50bn in total, require significant tunnelling expertise.

The support for tunnelling skills will include:

  • 450 new apprentices and extra training for 500 existing underground construction workers
  • Explore sponsorship of tunnelling degree courses
  • Help to exploit UK world-leading tunnelling research and development to grow markets

According to the Cabinet Office, projects in the construction pipeline such as High Speed 2 and the nuclear programme will generate 4,000 jobs in tunnelling by 2015/6. The British Tunnelling Society says that demand for these skills could outstrip supply by 2015.

The publication of the revised pipeline of government projects, originally launched alongside the Autumn Statement in November 2011, was widely welcomed by the industry. However, sources said this week’s move hinted at the possibility of a more active industrial policy from the government to aid industries which are seen to be a priority.

Vince Cable said: “Frankly, we’ve been too short-term in how we’ve done procurement in the past. Our key competitors in Europe already see procurement as an integral part of a proper industrial strategy and it’s time we did the same. This is a win-win scenario, making our businesses stronger and providing best value for the taxpayer.”

Francis Maude said: “Publishing data on what we plan to buy – whether it’s tunnels or computers – means we can identify skills gaps sooner and give industry a heads up so UK businesses  are in a better position to compete.

“We are publishing information now so that when the time comes to do these projects British industry will be in a strong position to win the contracts that drive growth here    at home.”

The announcement was came against a backdrop of dire economic news, with construction entering its third technical recession since 2007 with a 3% fall in output in the last three months, a fall which also dragged the wider economy into recession.

On Monday this week the Treasury said that up to £1.5bn of cost savings had been identified in infrastructure projects since the publication of its National Infrastructure Plan.

However, a survey of infrastructure industry chief executives undertaken for IUK [check] found that while the publication of the pipeline had been helpful in providing greater certainty to the supply chain, the industry had so far seen very little sign of any improvement in procurement processes.

It found that 72% of contractors said they had seen no improvement in infrastructure procurement processes in the last year, with 7% saying things had got worse.

Industry figures such as British Chambers of Commerce, the Confederation for British Industry (CBI), Institute of Directors and the UK Contractors Group are among those who have pledged their support for the Government’s new approach and signed the Government’s “Procurement Pledge” that sets out key policy on procurement.

Noble Francis, Construction Products Association economics director said: “Our latest forecasts for construction anticipate that the industry will fall considerably this year. It is essential that government does its utmost to switch its current spending towards the more productive capital spending.”

The revised £50bn pipeline of capital work is available here or from the Cabinet Office web site.

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