Posted by Catherine Welch, Partner
The Government’s plan to rebuild post-coronavirus: a highway to recovery?
Is the Government’s announcement of support for infrastructure a boon for the construction sector, or does it have the potential to create a two-tier industry?
The Government has set out its plan to spend £5bn on accelerating infrastructure projects. The pledge to fast track major building projects across the country is designed to help the UK’s recovery from coronavirus.
Any speed up of investment in public assets where there has been underinvestment during the years of austerity, for example schools and hospitals, is a good thing for supporting the construction industry and the wider UK economy, especially in light of the Covid-19 impact and the potential reality of a no deal Brexit on the horizon at the end of this year.
To assist the contractors and consultants to weather the Covid-19 economic impact (much of which is still yet to be fully felt by the industry), the question is how quickly this investment can be translated into actual contracts placed along the whole supply chain, with shovels in the ground and the cash flowing swiftly to those contractors and suppliers.
There is also some suggestion that this investment could lead to a ‘two-tier’ construction industry post-Covid-19 hitting.
On the one hand, we’d have contractors and consultants involved in infrastructure projects looking to the mid/long term prospects of projects coming online and building their business models around this clear investment pipeline. On the other hand, there would be those contractors and consultants who work on projects ‘outside’ of infrastructure where the investment and project pipeline is already drying up.
Some industry commentators believe this could be an opportunity for contractors to diversify their offering as part of mapping out their own ‘roadmap to recovery’, as we – as a society – learn to operate with thriving businesses where Covid-19 mitigation measures are still required, as opposed to holding our breath for a time when the practical and economic implications of Covid-19 may be overcome.
Whatever the outcome, there will be calls for the government to balance this investment with its desire to mitigate the environmental impact of certain proposed infrastructure projects.
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