Over three quarters of UK subcontractors don't benefit from national infrastructure projects

Rebecca Smith
Heathrow has pledged to spend £50m of supply chain investment by 2017
Heathrow has pledged to spend £50m of supply chain investment by 2017 (Source: Getty)

With Philip Hammond's first Autumn Statement on the horizon, the general expectation is that it'll be an infrastructure-laden announcement.

And UK subcontractors are among many hoping they'll get some attention. Over three quarters (78 per cent) don't benefit from national infrastructure projects, according to new research from specialist funder Bibby Financial Services (BFS).

Helen Wheeler, managing director of construction finance at BFS, said: "Despite the sound of claxons coming from government each time a large scale infrastructure project is announced, it is clear that any benefits to the construction industry are swallowed up by the large and the few."

In March 2016, the government announced its National Infrastructure Delivery Plan, including a pipeline assessment of planned infrastructure investment across the private and public sector.

While part of this plan focused on improving the procurement process and opening doors for both national and regional subcontractors, BFS's research of 250 UK subcontractors, found just one in five subcontractors benefited from national infrastructure projects. A third of firms wanted support in tendering for national contracts.

As for the biggest threat to their businesses, late payments were a bugbear - over a quarter said they will be the most significant trouble over the next year.

Behind commercial contracts, housebuilding was seen as the greatest opportunity for subcontractors to secure work in the future
Commercial contracts and housebuilding were seen as big chances for subcontractors to secure work (Source: BFS)

There have been several big infrastructure decisions made in recent months - from Heathrow getting the green light on expansion to the £18bn Hinkley Point.

Last month, Heathrow said the government's backing of its expansion had triggered £50m of supply chain investment. Of its procurement spending, 95 per cent will be with the British supply chain and 60 per cent of that outside London. There are contracts worth £460m up for grab ahead of construction starting in 2021.

Recent research from the Centre for Economics and Business Research (Cebr) for Arcadis, found that infrastructure delays have been costing the UK. A one-month delay in the transport infrastructure pipeline means the UK will miss out on around £2bn of investment-related GDP over the next five years (equivalent to £48,425 for each minute of delay).

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