Spending review brings opportunities for contractors

Thursday 27 June 2013

Yesterday (June 26th) chancellor George Osborne introduced a series of sweeping spending cuts worth £11.5 billion. Schools and hospitals may have been protected, but almost no other department was safe. The Department for Business, Innovation and Skills (BIS) is set to lose nearly six per cent of programme and administration budget, but it will nevertheless retain £13 billion to pay for many of the government’s growth-boosting measures.

Self-employed professionals who work in science and technology will be pleased to see that science funding will rise in real terms to 2015-16, while an additional £185 million for the Technology Strategy Board will provide a boost for research and development across the country, potentially bringing benefits for contractors with expertise in a range of technical disciplines.

But the government is also redeploying some of its existing resources to support investment in energy and infrastructure projects that will facilitate further growth. Mr Osborne announced that the government will be putting money behind the largest infrastructure programme that the UK has seen - and it seems contractors stand to gain from a wealth of new opportunities.

Individual projects were announced separately by treasury minister Danny Alexander today. Among the £100 billion projects which will enjoy government backing was the long-awaited Mersey Bridge to keep Liverpool and the surrounding towns and cities better connected.

Consultants and specialist contractors in renewable energy may be pleased to hear that a further £800 million will be set aside for the green investment bank, as well as giving it the right to borrow another £500 million from central government if required. For those with nuclear energy expertise, the construction of a new nuclear power plant at Hinkley Point is also likely to be particularly welcome.

Extensive repairs and developments to the transport network will be launched, opening up opportunities for civil and safety engineers who choose to work for themselves. Another 850 miles of railway are set to be electrified over the course of the next parliament, while another £16 billion will be set aside for the controversial HS2 rail link within the next parliament.

Improvements to the road network will also be expansive, with major projects already announced on the A19, A63, M6, M5, A38, A21, M4 and the Chichester bypass.

For IT contractors, there was also news that the government plans to invest another £250 million to meet its target of fixed super-fast broadband for 95 per cent of the country’s population by 2019. Because this is likely to boost the role of technologies such as cloud computing and bring your own device working practices, it is likely that this move will bring plenty of new opportunities for independent workers in this field.

An additional £600 million is also set to be given to the Regional Growth Fund, encouraging private sector companies to invest in projects that will both boost economic growth and maintain sustainable employment.

“Infrastructure is rightly singled out as the most effective engine for growth, as we urged,” said John Cridland, director-general of the Confederation of British Industry. “While the Government talks a good game on infrastructure we've seen too little delivery on the ground so far.”

But the Institute of Directors argued that Mr Osborne had not gone far enough.

“The Spending Review leaves business feeling like Oliver Twist,” said chief economist Graeme Leach.

“More please, chancellor. Please could you go further and faster with spending restraint? Please could you shift even more expenditure from current spending towards infrastructure?”

By Victoria McDonnell

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