At last, the uncertainty is over. But while cuts to Government departments’ budgets over the next four years will be less severe than expected, it will still be tough.

Wherever you stand, deficit reduction was inevitable and from a business point of view, it is a relief to know the Government has clear plans and is taking tough action now to secure economic stability.

In Oxfordshire, there will be winners and losers and, although we are likely to hear more from the losers, many companies will have prepared for the belt-tightening and will continue to flourish during the difficult times ahead.

n Smaller firms likely to take most of the pain Cuts will, however, hit the construction sector harder than most, not just large and medium-sized outfits like ours, but the whole supply chain.

While building contractors are seeing the pool of work available reducing and competition for projects inevitably increasing, building suppliers will be feeling the pinch even more.

Sub-contractors who earned their living from the construction of new buildings such as steel prefabricators, curtain wall suppliers and roof truss manufacturers, are likely to suffer most, if they cannot adapt and increase efficiency.

They are now taking a lot of the pain and there is a real risk that some very good suppliers will fail, as the emphasis accelerates away from new build to refurbishment.

Interestingly, we are already finding the downturn is leading to improvements in sub-contractor performance — we are seeing service of a much higher quality at a lower cost — which is all good news for those commissioning work.

Public sector construction projects were already under pressure before the spending review.

With local government funding directly in the firing line, this will only increase, despite the fact the coalition is prioritising the NHS, early years education provision and some capital projects of long term economic value, notably transport.

It is less clear how the commercial sector will be affected, despite David Cameron’s stated “relentless focus on growth”.

With the reduction of public sector building, companies will have their pick of construction firms and be able to demand higher levels of service.

n Refurbishment market opportunities The underlying requirement for modern, high quality, functional space does not disappear.

There will be growing pressure to make the most of existing buildings — whether it is the Oxford Ice Rink, the Ferry Sports Centre, or Thame Library. Smaller, more cost-effective interventions will be used to improve, make good and maximise what already exists and remodel it for new uses.

Ministry of Defence and Police spending cuts will also hit. Here too, fewer shiny new buildings will perversely see more work opportunities for firms with strong track records in refurbishment work. Schools and colleges are already choosing to make their budgets work harder. Remodelling and refurbishment is likely to be the way forward.

These projects tend to be far more complex than new build, as they frequently involve occupied buildings where careful phasing of work is required within strict timeframes. It is an area where experience really counts.

The future for housebuilding still remains very uncertain and the success of the Government’s programme to raise money from social housing rent increases to fund new affordable homes remains to be seen. I think the market will continue to drag along the bottom until more confidence, and therefore more money, returns.

n Continued investment While many construction companies have had up to eight very good years, these have given them the chance to build up good levels of reserves.

Continual investment in people, however, is also essential, so we see the Government’s support for an extra 75,000 apprenticeships as tremendous news.

It echoes our own policies and long-term commitment to providing opportunities and training for young people struggling to enter the employment market.

More companies need to get behind this initiative as young people are not only the future for the construction industry, but future leaders of UK Plc.

n What really matters As a nation we have got what we deserved to some extent, having overspent for the last four years. Looking ahead, there will be up to four years of belt-tightening. Unfortunately, I think Oxfordshire’s construction sector will shrink.

To improve the chances of more companies coming through the recession, I believe we all need to focus effort on what really matters — staff, suppliers and customers.

Hopefully, the vast majority of Oxfordshire companies will also come through as fitter, leaner, more effective businesses.

o Contact: Beard, 01865 860000.

Web: www.beard-construction.co.uk