The Scotland Bill currently going through the Scottish Parliament could give the Scottish Government the power to decide how to raise finance and the right to spend a portion of Scottish income tax. This is in the face of a capital spending cut in Scotland of 38% over four years.
The Scottish Government has been exploring new ways of funding projects and having the power to borrow money on the open market would be beneficial. An example of an innovative funding scheme is the National Housing Trust, which has been lauded by contractors. This has recently ensured £6 million of funding through Clydesdale Bank for the construction of homes in Galashiels through a Joint Venture between Scottish Borders Council, Tweed Homes and the SFT.
With the strongest growth in commercial markets expected to come from the South-East of England, the Scotland Bill currently going through Parliament could bring significant change.
It would see the Scottish Parliament given the power to decide how to raise finance and the right to spend a portion of Scottish income tax as the UK government cuts its grant for capital spending in Scotland by around 38% over four years.
The SFT has awarded a Cyrill Sweett and Miller joint venture a £435 million deal to build regeneration schemes through its Northern Hub, one of five hubs set to spend £1 billion on community projects over 10 years. Scotland’s biggest infrastructure project, the Forth Replacement Crossing is worth £790 million and was awarded to a consortium of Dragados, Hochtief, American Bridge International and Morrison Construction in March. Brookfield Construction was awarded the country’s second biggest scheme currently under way, the £670 million construction contract on the new £840 million South Glasgow Hospitals.
The Scottish Government points to the boost to the construction industry that such infrastructure schemes bring through subcontracting opportunities. They also point out that investment outside of infrastructure projects has not dried up. Sanctuary Scotland Housing Association is looking for eight contractors for a £200 million, four-year framework, while Aberdeenshire Council’s four-year capital works framework is worth £220 million. South Lanarkshire Council has already awarded deals under an £850 million primary schools modernisation programme, which will see all 124 primary schools in the area rebuilt by 2016.
Infrastructure projects still promise strong investment in the longer term. With the Scottish Government keen to maintain its focus on renewable energy, Scottish contractors are hoping natural resources can help to lead the country into a more stable decade.