Perspectives

Expect the unexpected - what the general election result means for construction

It’s safe to say that the result we saw last week was not what anyone was expecting – and certainly not what many in the construction sector might have been hoping for. Mace's Deputy COO Mark Castle explores what it means for the construction sector.  

As the polling experts and pundits mull over exactly how they called the vote so badly, and the politicos battle it out to establish who gets to govern, the rest of us are left trying to guess what it means for the long-term future of the country.

It certainly seems – at least at the time of writing – that we’re going to end up with a minority Conservative government led by Theresa May and supported by Northern Ireland’s Democratic Unionist Party (DUP).

It’s hard to see how such an arrangement is strong or stable in the long term. With such a tiny margin required for Labour or others to challenge each new piece of legislation, the government will face a choice between passing very watered-down proposals or facing a series of embarrassing defeats.

What this might mean for the construction and development sector is far from clear, but we can make a few assumptions. 

Instability and uncertainty makes developers and investors uncomfortable and flighty; bigger projects in the UK’s major cities will find it harder to find funding and as a result we may see appointments drop off in the short term.

Similarly, in the public sector we will see big spending decisions kicked once more into the long grass. We’re used to this now – we haven’t really returned to normal since before the EU referendum last year – but many in the sector were banking on a strong majority enabling the government to make confident spending decisions.

There are some reasons for hope. The appointment of Gavin Barwell as Theresa May’s chief of staff will be seen as a good result. The recently deposed MP for Croydon was well-regarded by the industry in his role as housing minister and his new position may well mean a more radical and forward thinking housing and development agenda from the prime minister.

It’s also likely that the government will want to prioritise policy where it shares some common ground with the opposition to deliver some early victories in the Commons.

One of the key areas of agreement in the two manifestos was around infrastructure spending, particularly on regional transport infrastructure. We know that both the Tories and Labour are keen on a “Crossrail for the North” or similar, so hopefully we will see some renewed momentum behind that proposal.

The DUP’s role will also potentially mean Northern Ireland receives some serious infrastructure investment for the first time in decades. Their manifesto proposed hundreds of millions of pounds of road development across the region, and you would expect that delivering at least some of that programme will be part of their agreement with the Conservatives.

The bigger, existential questions for our sector around Brexit and what happens on freedom of movement have become even less clear than they were last week. The role of the DUP may make it more likely that we see a “softer” Brexit, and May’s substantially reduced majority may make it more likely she takes a more transparent and cross-party approach to the negotiations.

Conversely, of course, we could well see another election in less than six months – or Corbyn could try to form a government next week and this entire column could be out of date by the time you read it.

My message to the sector is that we need to be prepared for the unexpected, and we need to make sure we are working as hard as possible to ensure that our access to the skills, people and investment that we need to keep delivering sustainable growth is high on the agenda – whoever ends up running the country.

This article was originally published by Construction Manager.

“It’s also likely that the government will want to prioritise policy where it shares some common ground with the opposition to deliver some early victories”

In conversation today

Mark Castle, Deputy Chief Operating Officer Construction

Mark Castle Deputy Chief Operating Officer for Construction

More about Mark Castle