Impact of the Government’s Spending Review on the Construction Industry

Impact of the Governments Spending look back on the manifestation IndustryThe impact of the Governments inspection on the complex body part effort has had different reactions. Edwards (2010)7 points out that 20 bn of capital spending volition be cut between now and 2014/15. The impact volition be severe on government departments and local authority budgets. however further details published by the HM Treasury (2010)3 luff that the government intends to increase net capital spending by 2.3 bn up to 2014/15, relative to the June 2010 Budget predictions. Currently the Government spends approximately 50 bn on capital projects.It appears that the Government is decoctsing on those projects with the highest economic value. instruction along with health and infrastructure are areas that the government has chosen to focus on (Anon, 2010)8. This article also quotes Graham Watts, Chief Executive of Construction Industry Council who states that social housing is the worry, but investment in schools, blow reduction and transport infrastructure plus the Green Investment patois are exacting. The Spending Review of 2010, has reduced the funding for kind Housing from 8.4 bn to 4.4 bn (HM Treasury, 2010)3 This will be a severe blow to those social system companies who specialised in having contracts with social housing customers, such as, local councils and housing associations, according to Light (2010)9.Keynesian surmise and the UK Economy The UK economy has endured 6 consecutive quarters of negative growth, resulting in one of the most protracted recessions in modern times (2008/09). Since the beginning of 2010 the economy has shown some positive signs of recovery.Two schools of thought have emerged from this rece... ...ble to the Miller Group will therefrom be further restricted. The Group does recognise this constraint and as a result the company continues to focus on cash generation and speak to controls (Miller Group Interim Report)13. Th e cost control factors according to Keynesian Theory will mean the company is responding to its own difficulties and will start stash money to, like the consumer and this will further impact the circular conflate of money in the economy. SummaryThis paper has provided an overview of the UKs Spending Review of 2010 and its potential impact on the macroeconomic picture of the UK. Particular tension has been given to the relevance of the Spending Review on the construction industry and its impact on a construction company. Furthermore the paper attempts to subsume some aspects of the Keynesian Theory to the current UK economic situation.