Efficiency savings from next year's Scottish budget must not be made at the expense of the construction industry.

This was one of the key messages from Scottish Building Federation Chief Executive Michael Levack when he appeared before the Scottish Parliament's Finance Committee yesterday.

Giving oral evidence to the committee as part of its strategic scrutiny of the Scottish budget for 2010/11, Mr Levack pointed to evidence from a variety of industry sources, suggesting that, while the overall economy is predicted to begin growing again in early 2010, recovery may not feed through to the construction sector until early 2011.

This meant that the Scottish Government must be ready to provide further support to the industry throughout next year, Mr Levack argued.

Looking further ahead, he suggested that the outlook for the industry is very positive, with a number of major capital projects on the horizon, including the new Forth Crossing and significant investment in the run-up to the 2014 Commonwealth Games in Glasgow.


But with many of these projects only due to come on-line in 2012, and private sector investment continuing to be squeezed, he said next year could see a further loss of construction skills and capacity unless the Scottish Government takes action to help bolster the industry in the interim.

In this context, he expressed concern that, although very welcome in the current climate, the decision to accelerate £230m in capital expenditure to the 2009/10 budget would leave a major shortfall in public funding for construction in the 2010/11 budget.

He also called on MSPs to apply further pressure on Scottish Government ministers to accelerate progress on the Scottish Futures Trust with a view to mobilising additional private sector investment in capital projects such as new schools and hospitals. He said this was now particularly urgent given that projects with a value in excess of £1bn, approved under the previous financing arrangements, are due to be concluded in the next 6 months.

Michael Levack said: "We're already hearing commentators speculating about possible green shoots of recovery. But in reality, many experts maintain that our economy still faces a prolonged downturn and an even longer period of time before confidence recovers.

"Recent political discussions have focused on the need for Government at all levels to make significant 'efficiency savings' from public expenditure. My message to MSPs is that this cannot happen at the expense of Scotland's construction sector."

(GK/JM)