Open letter to George Osborne

Mr George Osborne
Chancellor of the Exchequer
11 Downing Street
London

Re: Your forthcoming emergency budget…

Dear Mr Osborne,

Please forgive me for this intrusion. I realise that you’re a very busy man and that you’re currently doing your best to dig UK PLC out of a deep, dark financial hole created by the banking sector, an unprecedented global recession, and by the previous incumbents of your current official home.

However, since you are working on an emergency budget that is likely to impact upon the industry that I represent and love, I thought I would drop you a quick line to offer you advice before you do anything rash on 22 June 2010. And I would preface my remarks by reminding you that, according to Building magazine, every £1 spent on construction generates £2.84 for the UK economy:

1. The construction industry is the UK’s largest single employer and any fiscal decisions you take that impact upon the construction industry will ultimately impact upon a huge number of other sectors from the equipment and materials suppliers we rely upon through the retailers where we spend our hard-earned cash to the parents that want school places, patients that want hospitals and drivers who need the roads that we build.

2. Our latest statistics suggest that there has been a sharp falling off in tenders within the housing association and affordable housing sector. Now, as a private individual I realise that if there’s no money in the bank, I can’t afford to put a conservatory on the back of my house. But the situation in the affordable housing sector is far more complex and far-reaching. For one thing, the UK continues to have a shortfall in the number of available housing, a fact that can only be addressed by a continued investment in the housing market or a moratorium on procreation. Moreover, reducing or freezing funding to the affordable housing associations impacts upon planning consents for private housing, driving up the value of existing housing and, therefore, driving up inflation. While the country remains in the grip of recession, I would strongly urge you to consider a relaxation of planning law to encourage private house-builders to maintain their construction programmes.

3. Another area of the construction industry that has seen a sharp decline from the first to second quarters of 2010 is in schools, colleges and universities. Now there can be little doubt that some of that downturn is merely the market finding a level again after the pre-election increase in spend in this area by your predecessor as a last-ditch attempt to secure some much-needed votes. But the fact remains that the level of spend in this sector is actually well below that of the same period last year, in the very depths of recession. With much of our manufacturing base now sadly consigned to the pages of history, the future prosperity of UK PLC will hinge upon the export of knowledge and skills. If we are to compete on the world stage in the information age, we will need a highly-skilled, highly-educated workforce; a workforce that can only be provided by an ongoing investment in schools, colleges and universities, even if that is achieved by a wider use of private investment in academy schools.

So before you pack up that battered briefcase of yours (and, by the way, I know that times are hard but surely it’s time to replace that with an iPad…?) and head for the House of Commons on Tuesday, please bear in mind that the construction industry is the backbone, the blood, the sweat and tears of the UK economy. And whatever ripples you create here may well become a tsunami in other sectors of the UK economy. So please be kind.

Yours Sincerely
Neil Edwards
Chief Executive
The Builders’ Conference

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