Seventy-three per cent of local authorities have cancelled or postponed planned built environment projects in the past two years, research by Scape Group has revealed
According to AJ sister-title Construction News, Scape found that in rural areas 89 per cent of local authorities had to cancel or postpone a project, compared with 67 per cent in urban areas.
The most common reason for a postponement or cancellation was suppliers not being able to deliver within their budget, which affected 46 per cent of local authorities.
Other reasons included lengthy timescales in securing grant funding, suppliers not being able to meet desired timeframes and sales of assets falling through.
Scape’s Value Added Spending Monitor for Q4 2014 found local authorities have seen a 14 per cent fall in revenue budgets for built environment projects in 2014. They said the biggest source of pressure on finances in 2015 would come from schools and colleges and the health and social care sector.
Looking ahead to 2015, 79 per cent of local authorities said their top priority to improve built environment projects was to offer a greater number of apprentice and learning opportunities.
Meanwhile 74 per cent said they aimed to achieve a higher proportion of staff employed locally and a higher proportion of spending with local businesses.
Scape chief executive Mark Robinson said: ‘The budget squeeze has come at a time when construction demand is rising, which has pushed prices up due to limited capacity in the market.
‘The knock-on effect is that suppliers are becoming more selective or charging premium prices.’
He added that Scape’s partners were reporting construction inflation of 15 per cent to 20 per cent, making projects less affordable.
The research was carried out by Wriglesworth Research for Scape among 61 UK councils in November 2014.