Government urged to take action as value of healthcare construction projects takes a nosedive
THE healthcare construction industry is expected to take a big hit over the coming months as the Government drags its heels over public sector projects.
Experts are urging Whitehall chiefs to fast-track larger schemes in a bid to kickstart the economy and protect jobs in the sector.
Their comments come after it was revealed that in the first three months of this year, the underlying value of healthcare construction projects dropped by 12%, according to figures from construction analysis, forecasting and intelligence firm, Glenigan. And, despite a small increase in the three months to July, since then the industry has been suffering.
Particularly badly hit are Scotland, where the market was worth £303m in 2008m, but has dropped to £87m this year to date. In England, the East Midlands is 50% down on 2008 so far this year, and the North East is around 75% down compared with three years ago.
A Glenigan spokesman said: “Strong government spending on health led to a bright year for construction in the sector during 2008. However, as this funding was reduced there was a market drop in the underlying value of planning approvals, which dragged on output since 2009.
“Recently the flow of healthcare projects has been extremely restricted and a lack of larger schemes worth over £100m will be a constraint. As the sector is so reliant on public investment, changes to the way money is invested in the NHS, as well as financial restrictions placed on it after the Comprehensive Spending Review, mean we expect reductions in the value of project starts over the rest of the year.”
To try and curb the trend and protect jobs within the sector, Michael Conroy Harris, construction specialist at international law firm Eversheds, said schemes the Treasury may be putting to one side need to be fast-tracked.
He told BBH: “The construction industry needs help in digging itself out of a hole.
“To see a significant fall really puts the spotlight on government plans to kickstart the economy. What we really need now is a fast-tracking of large infrastructure projects if growth is to be encouraged and a further fall to be averted.”