CPA Bulletin

POLICY: 1 POLICY Political and economic turbulence ahead? In politics alone, the decade saw four Prime Ministers, four general elections and two referendums. Looking ahead into the 2020s, we can expect domestic politics to still be influenced and guided largely by the UK’s departure from the EU. Less than two months ago, there were still doubts in some quarters that the UK would be leaving the EU, with Parliament unable to pass the Prime Minister’s withdrawal bill. Now, with an unexpected majority of 80, Boris Johnson says he will be able to take the UK out of the EU by the end of January, leaving less than a year for both sides to come to an agreement on the next phase of trading arrangements and what a future UK - EU relationship looks like. The spectre of a no deal Brexit has for the moment, receded, but that does not mean it has entirely gone away. While business groups largely welcomed the result of the general election and the end of months of wrangling and inertia that a hung parliament might have resulted in, the UK is still in unchartered waters both politically and economically. If no agreement can be reached over the next year, a no deal between the UK and EU is still possible. Recent economic data from across the economy and the construction sector, shows sentiment remains weak at best. Although construction has shown time and again how it is able to survive and thrive, profit margins continue to be squeezed with many high- profile business failures. There are many hurdles to tackle over the course of this Parliament if we are not to see this trend continue. What the Conservative victory means for construction For construction, the Conservative manifesto outlined action to: • develop a national infrastructure strategy • provide an additional £100bn infrastructure spending on roads and rail. This includes £28.8bn investment in strategic and local roads and the development of a Northern Powerhouse Rail and Midlands Rail Hub • consider the findings of the Oakervee review into HS2, and work with civic leaders in the Midlands and the North to decide the optimal outcome • build new schools and hospitals • overhaul of the planning system • support modern methods of construction • commit to help first time buyers with deposits of no more than 5% • build 300,000 new homes a year by the mid-2020s • develop a £10bn Single Housing Infrastructure Fund • implement a £3bn National Skills Fund • improve the workings of the Apprenticeship Levy. As with all plans and promises, the devil is in the detail. The construction industry has been calling for clarity around the plans for HS2 since the Oakervee Review started. At the time of writing the review has not been published although early indications from a leaked copy at the end of last year, suggested it would recommend the project receive the go-ahead. The new government must provide direction and guidance in how it develops its infrastructure and housing policies, especially on the issue of planning reform and how projects can be kept on budget and on time. With a raft of new Conservative MPs representing seats in the north, there has been speculation that the Northern Powerhouse, unveiled by David Cameron and then largely ignored by Theresa May, could be revived under Prime Minister Johnson. Certainly, the election sawmuch increased debate on transport infrastructure in the north, especially the current state of coast to coast services. Such projects may only come to fruition towards the end of the decade, yet the arguments and debate about their merits must start now. The challenge for the Conservatives is how they can make their plans become a reality as they work with devolved regions and local authorities - especially as such a majority means they are likely to be in power for much of the decade. De-carbonising the economy With the climate change debate intensifying, CPA members will be at the forefront of efforts to limit emissions and develop new cleaner and greener sources of power and technology for the construction sites of the future. As the move towards zero emissions gets tighter, and more cities develop clean air zones, new technologies in electric engines are set to improve further, allowing manufacturers to provide fleets with larger machines that are both noise and emission friendly. Increasingly we have seen how the environmental impact of a project and its workforce is now facilitated into the costings and rewarding of projects. Companies who do not recognise this will end up losing ground and market share as a result. The skills agenda must take precedence This year sees the launch of the CPA skills strategy, a strategy we hope will set the tone for how the industry recruits and 16 CPA Bulletin > February 2020 www.cpa.uk.net Construction into the 2020 s - what next? The Conservative’s victory in the December general election bought to a close the second decade of the 2000s - a decade that has seen its fair share of both political and economic change. But what does the next decade have in store for construction and what does the election mean for the sector?