Scottish Building Federation: Construction Sector Faces A Potential Meltdown

The Scottish construction sector faces a potential meltdown this summer if the Scottish Government fails to accelerate progress on the Scottish Futures Trust.

That was the stark message from the Scottish Building Federation today as it highlighted a list of major projects, set up under the previous financing arrangements, which are due to come to an end in the next 6 months.

The list includes construction work with a total capital value of £352m on schools in the Scottish Borders, Falkirk, Angus, and Clackmannanshire and hospitals in Fife and the Forth Valley - all due for completion by the beginning of July.

The Federation also points to projects with an additional capital value of £782m, representing school infrastructure investments in West Lothian, South Lanarkshire and Dundee City, and investment on behalf of NHS Greater Glasgow, all of which are set to be concluded by the beginning of November.


In total, this means that public infrastructure projects across Scotland worth in excess of £1bn will reach completion within the next half year.

The construction industry is now fearful that, with no public sector investment in construction forthcoming due to a lack of progress in implementing the Scottish Futures Trust, and with private sector investment badly squeezed by the credit crunch, many construction firms will face a major shortfall in work as these projects come to an end.

SBF Chief Executive Michael Levack said: "With new chief executive Barry White now appointed, it really is crunch time for the Scottish Futures Trust. Until now, with private sector infrastructure investment squeezed by the credit crunch, Scottish construction has to an extent been cushioned by ongoing work to complete public infrastructure projects agreed under the previous system for financing capital investment. But a whole raft of these projects is due for completion this summer and autumn.

"In the current economic downturn, unless we see rapid progress towards the Scottish Futures Trust actually starting to fund new infrastructure projects, we could see a significant number of construction firms left high and dry within a matter of months and faced with the real prospect of having to down tools."

(GK/JM)