The most recent survey of local companies from the Construction Employers Federation (CEF) strongly suggests that the greatest single risk to jobs and the survival of local businesses is the slow pace of government’s return to business and the procurement of much needed construction work, exacerbated by a nervous commercial sector considering its options in retail, hospitality and office accommodation.
At the start of this year, there were reasonable prospects of a revival in the economy generally and construction in particular was looking forward to a revival of fortunes after several years in the doldrums.
The region was emerging from 3 years of political absenteeism by our local representatives and there was at last clarity around the big question of Brexit, albeit with many practical issues remaining to be clarified.
Westminster had allocated an increased capital budget for the Executive in addition to which approximately one billion pounds of funds was found to support the New Decade, New Approach initiative and entice the parties back to the business of government.
Then, on the cusp of this promising upturn in activity, Covid-19 emerged and has monopolised the political and economic agenda ever since.
The survey of local construction companies was conducted in July and represents the views of around 200 businesses with a combined turnover exceeding £1.5bn.
CEF’s incoming Managing Director, Mark Spence commented:
“In any other year, the CEF would typically be calling for additional budgets. This time, the call is simply for the budgets that have already been allocated, to be spent before the end of March 2021 at which point unspent monies risk being returned to Westminster.
The Finance Minister Conor Murphy, in a recent meeting with the CEF was clear he has no intention of allowing NI budgets to be returned to Treasury, but in order for that to be the case, urgent action is required to refocus, procure and award contracts.” added Mark.
CEF represents a sector sustaining around 65,000 skilled local jobs and, with the impending cessation of the Coronavirus Job Retention Scheme, without a clear pipeline of work, exactly half of the businesses surveyed anticipate making significant redundancies. The frustration is that these job losses could be greatly reduced if government would proceed with much needed investment to address the years of underfunding in roads, water infrastructure, social housing, hospitals and schools.
Mark Spence continued:
“In the eye of a storm such as this pandemic, no-one expects perfect decision-making; these are unprecedented times. However, we do need the wheels of government to start turning with more urgency and we look across the Irish Sea with some envy at the political impetus behind the English construction sector which is being primed to build the economy out of recession.”
Major ‘flagship’ projects e.g. Casement Stadium, York St Interchange, the A5, that should have been delivered years ago have been put on hold, each for understandable reasons, but the decision making processes must now be swift to deliver these key projects and their associated economic benefits.
However, where flagship projects have stalled, the available budgets must instead be diverted to smaller, shovel-ready schemes, e.g. local water and roads infrastructure, social housing, urban landscaping, school refurbishments, Health estate reconfigurations.
There are also many green initiatives that could be implemented such as in England where homeowners and social housing providers are being heavily subsidised to invest in upgrading the thermal efficiency of their properties. This would not only aid the environment and address fuel poverty, but also retain important skills within the industry and offer training opportunities to young people and unemployed.
“If this Assembly finds itself at the end of the financial year having underspent its allocated budgets and handing back money to Westminster, it must be held accountable to those whose jobs have been lost unnecessarily.
The CEF calls on our elected representatives to work together to agree a way forward so that Northern Ireland can support a thriving construction industry and avail of every opportunity for sustainable economic growth.” concluded Mark.
The Construction Employers Federation (CEF) is the certified representative body for the construction industry in Northern Ireland. The organisation has over 800 member companies ranging from micro businesses employing a handful of people to the largest construction companies in Northern Ireland. In total, CEF member companies account for over 70% of construction output in Northern Ireland.