CLC Lobbies for Revival of Private Finance in Construction

The Construction Leadership Council (CLC) is urging the next UK government to revitalize private finance in the construction industry, presenting a plan that could inject £45 billion annually into the UK economy by boosting industry productivity. In an open letter, CLC members outlined several measures, some familiar and others innovative, aimed at achieving this ambitious goal.

_{Key Measures Proposed}

The letter from the CLC includes a blend of established lobbying points and new recommendations to foster growth and efficiency in the construction sector. Here are some of the critical measures proposed:

1. 10-Year Infrastructure Plan:
   • The CLC advocates for the publication and consistent implementation of a long-term infrastructure plan. Such a plan would provide stability and predictability, enabling better planning and investment decisions across the industry.
2. Consistent Use of the Construction Playbook:
   • The Construction Playbook, a set of guidelines for procurement and project management, should be applied consistently to all government projects to standardise practices and improve outcomes.
3. Prompt Payment Practices:
   • Tightening regulations around prompt payment is essential to ensure that cash flow issues do not hinder project progress and contractor stability.
4. Planning Reform and Development Presumption:
   • The CLC calls for planning reforms and a presumption in favor of development on small sites to expedite project approvals and reduce bureaucratic delays.
5. Tax Breaks for Research & Development:
   • Increased tax incentives for R&D would encourage innovation within the construction sector, leading to more efficient building techniques and sustainable practices.
6. Promotion of Build-to-Rent Sector:
   • By increasing subsidy levels for the build-to-rent sector, the government could stimulate investment in housing, addressing the housing shortage and creating more rental options.

_{Innovating with Private Finance}

The most intriguing proposal from the CLC is the call for greater flexibility in fiscal rules to revive private finance in the construction industry. The letter recommends opening a dialogue with the industry to explore how private finance can fund some projects currently supported by government funds. This approach aims to deliver essential infrastructure while keeping within affordable fiscal limits.

By leveraging private finance, the government could alleviate some of the financial burdens on public funds, enabling the continuation and initiation of critical infrastructure projects without overextending the national budget. This strategy could also attract more private investment into the construction sector, fostering economic growth and job creation.

_{Economic Impact}

The CLC estimates that these measures could add £45 billion a year to the UK economy. This significant boost would come from increased productivity, more efficient project delivery, and the economic multiplier effect of construction activities. The revival of private finance, in particular, could unlock new funding streams and accelerate the pace of infrastructure development.

_{Moving Forward}

As the next government considers these recommendations, the collaboration between the public and private sectors will be crucial. The proposed measures highlight the need for strategic planning, financial innovation, and regulatory reforms to drive the construction industry forward.

The CLC's open letter is a call to action, urging policymakers to recognise the potential of the construction industry as a catalyst for economic growth. By adopting these measures, the government can create a more resilient, efficient, and productive construction sector, ultimately benefiting the entire UK economy.