Since the initial coalition agreement was published, three key political developments have taken place. None of these developments have fundamentally altered the position for construction companies and construction lawyers, and all mean that some residual political and practical uncertainty remains.
The three developments are the:
- Final coalition agreement (20 May 2010).
- Chancellor’s statement of how the government intends to save £6 billion (24 May 2010).
- Queen’s Speech (25 May 2010).
Final coalition agreement
For the construction industry, the final coalition agreement offered support for Crossrail, but did not end the uncertainty over, for example, Building Schools for the Future (BSF) (although Partnerships for Schools (PfS) was spared the so-called “bonfire of the quangoes”, at least for now).
Some major infrastructure projects have been “cut”. For example, the withdrawal of government support for a new runway at Heathrow and Stanstead has already lead to BAA withdrawing its planning application.
The construction industry should view the Chancellor’s statement as a precursor to the emergency budget, which will take place on 22 June 2010. Until then, it may be best to hold your breath. There may be more cuts and the Treasury’s papers, supporting that Budget, may yet demonstrate that the devil (for the construction industry) is in the detail to come.
More environmentally-targeted spending may offer hope, if it is made available, to help the shortfall in other areas of work.
For the construction industry, the Queen’s Speech promised to introduce a new Bill on high-speed rail links. However, while the government plans to take action on the new planning system necessary to replace the Infrastructure Planning Commission (IPC), it is not yet clear how this will affect major projects.
So, while more political detail continues to emerge, the industry is still in limbo.