Construction should be top election issue

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Local election candidates are being urged to make investment in building projects a top priority as a new report shows the Scottish construction industry has generated more than £300 in added value to the local economy for every £100 local authorities have invested in capital projects since the last local elections in 2007.

The findings are part of a major new report published by leading trade body the Scottish Building Federation in the run-up to this year’s local government elections on May 3.

The body claims continued local investment in capital projects will deliver excellent value for local taxpayers while supporting employment in Scotland’s critically important construction industry.

Providing local analysis, the new SBF report illustrates how significantly the construction sector has suffered from job losses during the economic downturn. Between 2007 and 2010, employment in the Scottish construction industry dropped by more than 41,000. Over that period, the industry in South Lanarkshire lost more than 6500 jobs, while construction employment in West Dunbartonshire fell by 47%. Edinburgh has also been particularly hard hit, losing in excess of 5000 construction jobs – more than a quarter of all those employed in construction in the capital. Meanwhile, Angus and the Scottish Borders have also witnessed major downturns, with employment in the local building industry dropping by 45% and 44% respectively.

In terms of the number of new publicly funded homes built per head of population, the report finds Orkney to be the best performing Scottish local authority, having completed one new home per 105 people living in Orkney between 2006/07 and 2010/11. The Highland Council area and Midlothian and Shetland also score highly, with public funding in the Highlands providing one new home per 114 people and the other two local authorities each recording a ratio of one new home per 118 people over that same period.

Public investment in Aberdeen City, East Dunbartonshire and Falkirk delivered considerably fewer new homes, each recording a ratio of more than 450 people to each new home completed. The Scottish Building Federation is urging local authorities with low rates of public sector new build homes to do more to prioritise public investment in housing. It says the poor performance of Falkirk is particularly concerning given that, based on official housing waiting list figures, it has one of the highest rates of homelessness in the country.

Shetland, Eilean Siar and Clackmannanshire emerge as the most efficient local authorities in terms of processing planning applications, with only around three per cent of applications delayed beyond the normal statutory period for the planning authority to take a decision. Based on figures compiled between 2006/07 and 2010/11, Glasgow, West Lothian and Perth and Kinross emerge as the poorest performing local authorities with the average percentage of decisions delayed beyond the statutory period each year ranging from 12% in the case of Perth and Kinross to 15% in Glasgow.

The report also shows the gross value added (GVA) of the construction industry significantly outstripping the value of local authority capital investment in most local authority areas in Scotland. In Aberdeenshire, for every £100 of public funds invested in capital projects, the industry has delivered almost £730 of gross value added. Rates of construction GVA are also particularly high compared to levels of local public capital spending in Dumfries and Galloway and Dundee, where the industry is delivering close to £500 of added value for every £100 of local authority investment in capital projects.

Inverclyde was the only local authority in Scotland to record a negative ratio of industry gross value added to local public capital spending, with every £100 of public investment seeing only £64 in added value from the construction sector.

Commenting on the report, Scottish Building Federation chief executive Michael Levack said: “This report demonstrates the value of prioritising capital spending at a local level in terms of generating wider economic benefits. Across Scotland as a whole, for every £100 of public money invested by local authorities in capital projects, the construction industry is generating more than £300 of added value to the local economy. Provided the money is invested effectively in the right areas, prioritising capital expenditure within local government budgets offers an excellent return on investment.”