Delays in public spending hit firms in south England

Brian Everard, southern regional director, Civil Engineering Contractors Association

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Contractors in the South-east and South-west are under pressure due to the credit crunch and delays in spending Government infrastructure funding, according to regional experts.

The impact of the credit crunch on private housing and to an extent commercial development has seen a drop off in associated infrastructure work such as roads and drainage in the regions, said Brian Everard, southern regional director for the Civil Engineering Contractors Association.

He added: "Large housing developments are all on hold at the moment. It's causing a lot of concern."

Delays in decisions on major roads projects such as the Ilchester bypass and M5 work at Taunton is causing additional uncertainty.

Mr Everard said: "The funding allocations to the regional transport boards don't appear to be being spent.

"And meanwhile, rising construction inflation is eating away at those allocations."

However, Mr Everard said more money for rail, water and waste civils work was due to come on line.

He said that work from clients such as Network Rail and the water companies would help overall local industry confidence, as would work coming from some major local projects under way such as Land Securities' Ebbsfleet Valley in northern Kent and regeneration work in Exeter, Taunton, and Bristol.

The 20 to 25-year Ebbsfleet Valley project will see 420 ha of land transformed into a mix of residential, business, retail, leisure and public space to make the most of improved transport brought to the area by the Channel Tunnel Rail Link.

But Mr Everard said he was concerned as to how the credit crunch would affect companies abilities' to take on apprentices, especially as CECA has been doing a lot of work developing apprentices in the south.

The longer-term impact of the crunch on industry staffing capacity was echoed by Rupert Perkins, finance director for the National Federation of Builders and contracts director at building contractor John Perkins.

He said he was receiving "three or four" calls a day from employment agencies asking him to take on professional staff looking for work.

He added he was aware of some contractors in his area that relied on housing work that had gone out of business, but said his own firm was doing well as it was focused on public sector non-housing work.

He added: "It's because we took the decision to target sectors such as education and health, which is really paying dividends."