Spending review places 47 000 construction jobs at risk

Published:  15 October, 2010

EDINBURGH: Projected cuts to Scotland's capital investment budget could lead to the loss of 47 000 jobs from the region's construction industry, the Scottish Building Federation warned.


In a letter to the Chancellor, the Federation's chief executive Michael Levack asked government to consider the huge impact of cutting capital budgets that next week's UK Comprehensive Spending Review will have on construction employment.

Me Levack suggested the effects of a projected 40% cut in Scotland's capital budget between 2009-10 and 20014-15 would be "highly counterproductive" and could undermine attempts to build a sustainable economic recovery.

The letter also highlights official statistics from the past two years which show that, between 2008 and 2009, Scottish construction industry output fell by £1.7bn while 42 000 people directly employed in the industry lost their jobs. Over that period, the Federation estimates that a further 8000 Scottish jobs dependent on the industry would also have been lost.

The SBF's letter to the Chancellor also warns that any signs of recovery in private sector construction remain "fragile" and urges the introduction of "targeted measures to stimulate private sector construction activity' to compensate for 'any cuts in capital investment that are deemed to be unavoidable".

Cutting VAT on homebuilding repair and maintenance works is cited as a specific example of a targeted tax incentive that could help the industry to recover.

SBF represents more than 700 individual construction firms - from sole traders to major national contractors.

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