North East left to pick up the crumbs

Mar 27 2009 by Chris Knox, The Journal

ARIDDLE to start your day: What’s often in a hole of one kind or another, usually taken for granted yet is indispensable to us all? Right first time, it’s building and civil contracting in the North East.

No road is laid, no housing estate, school or hospital built, no railway line extended until civil contractors lay the groundwork.

When you see them fully occupied again one day (heaven knows when!) you’ll know then the economy is picking up.

Don’t be misled by spectacular digging as you drive past the second Tyne Tunnel’s workings, or by improvements promised to Tyne and Wear’s Metro train system, extending of the A1 motorway south of Darlington, or improvements to the Western bypass – indeed, practically any such major activity in the region.

While most of us think about the entry of decimal currency when we talk of “old” money and “new”, contractors see “old” money as that which the Government previously promised to spend but instead rolled over to the next tranche of announcements, while “new” money to them is an actual spend previously unannounced.

Contractors in our region repeatedly hear announcements of “new” projects that in fact are “old”.

Yet capital inputs to improve our region’s infrastructure are needed regularly if inward investment is to be attracted to the economy. The £13.5bn of road and rail improvements forming part of the Government’s drive to revive the national economy contains no new money for our region that I can see, despite a statement to the contrary.

Also, as I write, building projects for North East colleges, worth more than £300m, have been frozen.

We’ve warned before about the North East being overlooked.

Have our requests fallen on deaf ears?

The North East is picking up crumbs.

Without a place at the table our civils and construction businesses will have their recovery from the credit crunch seriously delayed.

Be positive, we’re told. But nothing in our line is improving – indeed, it’s getting worse.

Surveys in our industry show plunges both in new orders and in jobs. Firms are moving out of the region, closing even.

Training for employees still in work has ground to a halt. Long before the cry went out to take on more apprentices, our industry in the North East had been doing just that, expecting their futures could be assured.

Now as revenues dwindle, costs imposed by the Government rise relentlessly: higher national insurance rates, higher business rates from April (over 5%), and a business revaluation in 2010 threatening to pile it on further.

With the abolition of empty rates relief also, who’ll put up commercial buildings speculatively to greet economic recovery?

Excuse our remaining workforce if they feel abandoned in the trenches as they dig the occasional ditch.

For more information on Constructing Excellence in the North East, please contact regional director, Catriona Lingwood, on (0191) 383-7435 or catriona@constructingexcellence-ne. org.uk

By Douglas Kell, director, Civil Engineering Contractors Association (North-East)