Chancellor's promises good for landscaping

The Government's rediscovery of Keynesian-style spending policies, signalled by reports that chancellor Alistair Darling is keen to "prime the pump" of the UK economy with public cash, should rightly bring some comfort to landscaping firms hit hardest by the housing slump.

What those reports are most likely to mean is that the Government will remain committed to spending on major public-sector capital projects, while bringing forward billions of pounds worth of cash from public-sector budgets for 2010 and 2011 to spend now on what the chancellor has called "re-prioritised" projects. These are expected to include the new schools programme and spending commitments for leisure facilities. Darling is particularly keen to target what he described as "employment-creating sectors such as housing", and has already brought forward cash to build more social housing.

His promises come just in time. Only last Thursday research company Experian warned that the deteriorating economic conditions of recent months had led it to revise its earlier prediction of modest growth for the construction sector in 2009 to a decline of three per cent in output.

As one would expect, Experian found the housing sector has declined the most, with output there expected to fall next year by some 14 per cent. This, however, will be offset by the buoyant infrastructure market, which will see growth in output of 10 per cent.

Of course the benefits of the Keynesian revival going on in Whitehall will take some time to reach the landscaping sector and its suppliers. Many recent public-sector building programmes have been running behind schedule - including the schools-building programme - and as several commentators have pointed out, building work can't suddenly start simply because the cash has been made available. And landscapers won't be the first in line to receive it.

And, as noted last week (HW, 17 October), borrowing is already heading towards 50 per cent of national income, which will place constraints on exactly how much more the chancellor can borrow to fund new public-sector projects.

But his intentions are good news nonetheless, with the promise of real opportunities opening up, just as others are closing - to say nothing of their potentially positive impact on the wider economy.


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