16 Aug 2012
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Treasury urged to release repair and maintenance cash

Calls on the Treasury to release money ahead of schedule to local authorities for roads and housing repair and maintenance work have been stepped up following the latest construction output figures, which show a continuing decline in the volume of construction work.

The Local Government Association (LGA) and the Construction Products Association (CPA) said this week that central government should give councils funding allocated in the Comprehensive Spending Review for 2013/14 and 2014/15.

The Office of National Statistics figures, published on 10 August, showed construction output was down 9.5% in the second quarter of this year, compared with the same period a year earlier.

The fall in construction output for Q2 2012 compared with Q1 was revised upwards to a drop of 3.9% from the 5.2% decline announced in July, but based on provisional figures. In July the ONS said the poor construction figures had pushed the wider economy into recession.

A spokesman for the LGA said bringing forward spending on highways repairs would have multiple benefits as councils could resurface roads rather than patch them up: “We are all for releasing capital funds now which we can get cracking on resurfacing all our roads which is better in the long term than patching them up. It is better for the economy – there are fewer roadworks, less hold-ups and more jobs for construction.”

The spokesman added that the Asphalt Industry Alliance estimated it was 20% more expensive in the long term to patch up roads than to resurface them.

Noble Francis, economics director at the CPA, said bringing forward repairs spending could help stimulate construction faster than investment in large, complex schemes, and that bringing forward repairs spending on housing could have a “considerable” effect to revive that part of the industry because spending had been heavily cut but was set to increase in 2014/5.

“Contractors are already in place because there are frameworks, planning is in place because the work is on-going and it is labour intensive,” said Francis.

The CPA's industry forecast published last month predicted private non-housing repairs would start to grow in 2013 while public non-housing repairs would expand from 2015. In housing public repairs would grow from 2014 and private repair work would increase from 2013.