Contractors lead fight against spending cuts

Construction launched the first salvo in its fight against capital spending cuts, spelling out that every £1 spent on construction delivers an economic benefit of nearly £3.

The UK Contractors Group in partnership with the CBI today launches the first report to detail the huge benefits construction delivers to the UK economy.

It is the first time independent consultants have priced in pounds and pence the value construction creates.

The report, paid for by the 30 contractors making up the UKCG, makes a forceful case for continued investment construction projects crucial to the long-term future of the UK.

It warns that any Government axing construction puts its green credentials in jeopardy because 80% of the carbon reduction measures for 2020 rely directly on the construction industry to deliver them.

The report, Construction in the UK Economy: The Benefits of Investment, shows that every £1 spent leads to a £2.84 increase in GDP. In areas like school building the report’s authors estimate an even bigger economic benefit of £3.87- £5.04.

James Wates, chairman of UKCG, said: “This is the first time the industry has put together a set of compelling and powerful arguments to support the case for investment in infrastructure.

“Now is the time for the whole industry to come together behind the CBI to press the message home.”

Meanwhile, other new research says building Crossrail and completing the modernisation of the Tube will generate economic benefits of £24bn in additional GDP.

The report by business organisation London First showed that without continued investment, Londoners would face increasingly impoverished travelling conditions on a daily basis.

Stimulating facts

• £1 spent on construction gives £2.84 in economic activity

• Every £1 spent on new schools generates £3.87- £5.04 long term benefits

• 55p in £1 recouped by Treasury through various taxes

• Construction is less reliant on imports than motor industry

• Construction contributes 8.5% UK GDP

• The entire value chain consists of 300,000 firms

• The entire industry employs 3m, 8% of UK employment

• Construction offer the fastest way to stimulate growth

• It creates jobs among the low skilled and young workforce

• Tends to creates more jobs in areas of high unemployment

• Construction suffered highest rate of job losses