Warning 50,000 construction jobs could be axed after spending review

Almost 50,000 construction jobs could be lost in the coming years if feared spending cuts go through, industry leaders warned today.

This would amount to a quarter of the current workforce being laid off -and comes on top of more than 40,000 job losses in the industry in recent years.

Scotland's capital investment budget is facing a projected 40% reduction as part of spending cuts aimed at driving down the UK's 155 billion annual deficit.

The Scottish Building Federation (SBF), which represents more than 700 construction firms, has now issued a late plea to Chancellor George Osborne ahead of next week's spending review when the extent of many cuts will be set out.

SBF chief executive Michael Levack said today: "We remain extremely concerned about the potential impact of such significant cuts in Scotland's capital budget on employment in the construction industry.

"By analysing recent official statistics, we have attempted to quantify what that impact is likely to be. It amounts to a loss of jobs equivalent to roughly one quarter of the current workforce.

"Clearly, the hope must be that a proportion of this loss will be compensated by a rise in investment from the private sector.

"At the moment, however, our concern is that any recovery in private sector construction activity remains very fragile.

"Therefore, if the Government is telling us that funding cuts of the scale predicted are unavoidable, incentives must be introduced to stimulate recovery in the private sector. Otherwise, we could see a net loss in total industry employment dangerously close to the 47,000 job figure we have highlighted to the Chancellor."

Mr Levack has now written to the Chancellor suggesting the effects of a 40% cut in Scotland's capital budget between 2009/10 and 2014/15 could undermine attempts to build a sustainable economic recovery.

The letter highlights official statistics from the past two years which show that between 2008 and 2009, Scottish construction industry output fell by 1.7 billion while 42,000 people directly employed in the industry lost their jobs.

Over that period, the Federation estimates that a further 8,000 Scottish jobs dependent on the industry would also have been lost.

The recent Scottish Independent Budget Review, led by Crawford Beveridge, predicted that Scotland's capital expenditure is likely to fall by 40% or 1.6 billion over the next five years.

SBF's analysis of official statistics on industry employment and output suggests that, for every percentage point reduction in capital investment, an additional 1,200 jobs could be lost.