Chancellor is urged to support North-East construction sector (From The Advertiser Series)

Chancellor is urged to support North-East construction sector

10:45am Wednesday 6th March 2013 in Business By Steven Hugill

CONSTRUCTION bosses have today called on Chancellor George Osborne to safeguard thousands of North-East jobs, warning some companies are teetering on the brink of collapse.

Leaders from three North- East industry bodies have written an open letter to Mr Osborne urging immediate support for the region’s construction and civil engineering sectors.

The North-East Civil Engineering Contractors Association (CECA), the North-East Association of Consultancy and Engineering (ACE) and Institution of Civil Engineers (Ice) have joined forces to ask the Chancellor to improve road networks, hand more power to smaller projects to get work started, and cut red tape, which they believe could create up to 3,000 jobs.

The groups say about 5,000 posts were cut across the industry in the North-East last year, with about 20 companies closing and more forced to downsize and lay off workers.

Their warning comes after Sunderland-based builders merchant A Thompson and Sons, which employs about 70 people, yesterday fell into administration.

Other North-East firms which fell victim to the tough economic climate include C&A Pumps, in Bowburn, near Durham City, Gateshead contractor Barton Civil Engineering, property repair group Rok, and Morgan Sindall, which shut its Durham office on Belmont Business Park.

The three groups are calling on the Government to: 􀁥 Fast-track plans for road improvements at the A19 Testos junction, connecting the A184 south of Newcastle and the junction linking the A19 with the A1058 Coast Road, in North Tyneside, near the Tyne Tunnel, which are due to start after 2015;

• Give more power to smaller projects, allowing local authorities, enterprise partnerships, and the Homes and Communities Agency to start work in the next 12 months;
• Create a team to cut red tape to speed up projects across the North-East.

John Dickson, chairman of CECA, called on Mr Osborne to make money available for the North-East, saying £25m would allow smaller local firms to start projects meaning jobs would be maintained and the region’s economy improved.

He said: “It is not just about creating jobs, but sustaining them.

“There are a number of small and medium-sized companies in the North-East who are teetering on the brink.

“Without some work, some of them are going to fold.

“Companies in the sector have shed workers at an alarming rate over the past three years and are struggling to hold on to more.

“If the Government was to release £25m for the North- East, that would mean about five or six projects could get started in about four months, which would have a significant impact on the construction and civil engineering industries.

“If you have smaller projects, they are ready to get going much sooner and can put work into the construction industry relatively quickly.

“If you have projects only the big companies can do, they take the work away from the smaller and medium-sized firms and export the profits.”

In the letter, the groups said the North-East could lead the way as an export region, but was held back by historic infrastructure deficits.

It said: “Our transport and utility networks have seen significantly lower levels of investment than the rest of the UK, meaning our efficiency trails behind.

“Our export economy will flourish further with better transportation, employment in construction will provide jobs in the short-term, and the proceeds of local growth will increase, returning more tax to the Exchequer.

“We want to see the North- East make an even greater contribution to the national good and are ready and willing but not yet enabled.

“We look to you, Mr Osborne, to give us that last vital ingredient.”