HA cuts £275m from major roads budget
11:29 07 Apr 2004
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Roads contractors face a severe downturn in work after the Highways Agency (HA) slashed £275m off its planned expenditure for major or Targeted Programme of Improvements (TPI) schemes and maintenance work in 2004/05.
The shocking discovery is revealed in the Civil Engineering Contractors Association (CECA) review of the HA's 2004/05 Business Plan, which is due to be sent out to its members soon.
Research shows that budgets for major improvement schemes have fallen from the £691m outlined in last year's business plan to £508m this year.
This fall of £183m breaks down into a £154m cut in capital expenditure, representing a fall of 37%, and a £29m cut in resource expenditure (an 11% drop), which is mostly used on scheme preparation.
Maintenance has also been hit with a £92m cut from last year's stated figure for 2004/05 of £822m to £730m. The combined capital and maintenance cuts amount to a total of £275m.
Worryingly, CECA added that although the HA's document listed 91 TPI schemes - of which 20 were added during 2003/04 - the HA has, for the first time, failed to give dates for actual/estimated construction starts and actual/estimated schemes available for use.
CECA also commented that it has been some considerable time since either the HA or the Department for Transport has published estimated costs of schemes, which makes it impossible to judge whether starts will make up for completions.
"Judging by the budget figures, however, in 2004/05 they clearly will not," CECA economic adviser Jim Turner told CJ. He added that the downturn is both worse and sooner than expected.
"The HA's document makes grim reading. There is not one ounce of encouragement for contractors in the business plan. The downturn in major scheme work has come earlier, and will be worse in the short-term than was previously expected. The question is whether there is enough work in other sectors to keep civils contractors busy during a two- or three-year quiet period."
An HA spokeswoman said: "We are pressing forward with our procurement and construction programme for 2004/05. There is a spending review being undertaken across the whole of government and we have made submissions in relation to that. We are still waiting for a response from government, but we anticipate that eight major schemes will start construction in the 2004/05 financial year. We are fully committed to delivering these schemes to the previously announced timetable."