Procurement Guidance Tool

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Spending Round 2013

Leading up to this spending round George Osborne promised a ‘dynamic vision for the future of British Infrastructure’, a much needed boost for an industry which has lost a staggering £20 billion in annual output since the financial crisis.  After it was announced on the Wednesday that no additional funding would be added to the coffers we were left sitting on our hands until Danny Alexander came around the next day to explain where spending would be allocated and possible plans for next parliament.  

Expectations were already low as spending plans were laid out in key areas; £70 billion for transport, £20 billion for schools and £10 billion for Science and Flood Defence. In every quarter since 2011 Q2, total managed expenditure for these areas has fallen on an annual basis, a trend which is likely to continue for some time given that the bulk of the announcements aren’t planned until after this parliament, by which time the economy and construction should be showing signs of recovery.


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The Association has produced a comprehensive list of projects set out in the spending review which can be found here

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Beforehand, the Association was anticipating that a spot price could finally be agreed to give Hinkley point C the go ahead. Especially in light recent warnings by Ofgem and the National Grid that the UK faces the prospect of a future energy crisis it was crucial the government acted to mitigate the uncertainty over key energy projects. This turned out to be another opportunity missed, despite granting Hinkley point C eligibility status for Government guarantees. Instead, the Chancellor announced that a strike price would be announced in July, which was well received by the press. The question is, will the press hold him to it if it doesn’t arrive?

Overall, the spending round turned out to be a missed opportunity by the Coalition, both economically and politically. Despite big announcements beforehand, nothing new was allocated since Budget 2013. This could turn out to be very damaging for the Coalition and the economy. With other key sectors such as services and manufacturing showing signs of recovery, construction is beginning to act as a drag on the economy. When will the government recognise that growth for construction means growth for the economy, something they have been professing support for over three years now?

By Kallum Pickering at 2 Jul 2013, 16:17 PM


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