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UK sets out £650bn infrastructure spend as supply chain crunch continues

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A warning sign is displayed at a Persimmon construction site in Dartford, Britain August 21, 2015. REUTERS/Neil Hall/File Photo
The construction sector has also felt the pinch, with widespread shortages of materials such as timber pushing up prices. Photo: Neil Hall/Reuters

The UK government set out a plan to pump £650bn ($897.8bn) into infrastructure on Monday morning in London, a move it hopes will support 425,000 jobs per year. 

The latest Plan for Jobs progress update set out investment in infrastructure projects across the country over the next decade.

The government said that since its launch last year the programme has safeguarded the economy, supported people back into work and will continue to invest in giving people the skills they need for a successful career.

Some £350bn has already been spent since the pandemic began.

"This isn’t just about numbers — our Plan for Jobs is also about giving people the hope and opportunity to meet their potential as we emerge from the pandemic and the economy recovers," said chancellor Rishi Sunak. 

The move comes amid a heightening supply chain and labour market crunch in the UK. Businesses across the country have been struggling to cope with both new Brexit border checks and a shortage of HGV drivers to deliver goods. Fast food chains such as McDonald's and KFC have run out of stock and certain products such as fresh fruit and vegetables have become scarce in supermarkets. Alarm bells have also been sounded ahead of the busy Christmas period. 

The construction sector has also felt the pinch, with widespread shortages of materials such as timber pushing up prices. 

The latest Markit report for the construction sector in August noted that amid softer growth in new orders, the rate of job creation had eased to a four-month low. Firms continued to note that strong market conditions had sustained demand for new employees, though additional cost burdens and a lack of skilled workers began to weigh on the rate of hiring.

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The government said it will "continue to work closely with business to identify any challenges in the labour market and respond pro-actively to help prevent disruption to markets and consumers."

The plan hailed 63,000 new starters on the Kickstart scheme. 

This is well shy of the 250,000 target for the programme. The Department for Work and Pensions (DWP) had said that efforts to recruit Kickstarters would be ramped up as lockdowns were unwound. 

There had been delays with the programme as SMEs had found it more difficult to access. Most of the delays were because companies that were hiring fewer than 30 people through the scheme could not apply directly to DWP. Instead the rules forced them to offer placements through an intermediary or “gateway.”

The delays meant the government removed the 30-job threshold from the Kickstart Scheme earlier this year.

The government also said that an average of 1,200 job seekers per week were enrolling on Sector-based Work Academy Programmes and that more than 80,000 apprentices had been newly hired under new incentive payments.

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