Building News is an information portal for all professional building specifiers. Here you can find all of the latest construction news from around the UK and the rest of the world.

Construction productivity boost could provide £100bn to UK every year

The scale of construction’s productivity gap has been laid bare in the a research report from Mace, which shows that the UK is missing out on more than £100bn of annual economic activity.

Mace’s research report, ‘The Size of the Prize’,  compares the construction sector and the manufacturing sector in the UK.

Manufacturing has seen steady productivity growth over the last twenty years, allowing the sector to deliver more economic growth with the same or fewer number of workers.

Conversely, the UK construction sector has seen productivity flat line for the past twenty years, limiting growth and denying the UK more than £100bn a year of economic benefit.

Mace’s figures show that – had construction kept pace with the productivity gains in manufacturing – the UK would see:

  • An approximate 3% increase in the UK’s overall Gross Domestic Product (GDP).
  • Each construction worker producing £38 an hour of economic activity, compared to £25.50.
  • The capacity to deliver the £600bn national infrastructure pipeline in four years, rather than six.

The tax generated by an additional £100bn of annual economic activity would produce an extra £40bn a year for the Government, enough to eliminate next year’s budget deficit, based on the Spring Budget forecast from 2017.

Mark Reynolds, Mace’s Chief Executive, said “The collapse of Carillion made clear the stark challenges facing the construction sector. Improved productivity is the key to more sustainable growth and stability across the industry. Unless we take swift action, slim margins and below average productivity will prevent the UK’s construction sector reaching its potential.

“It’s clear the UK is missing out on a huge amount of potential growth and infrastructure delivery every year – as well as the increased funding for public services that would generate.

“Now that we have seen the scale of the missed opportunity, it’s more important than ever that we work together to improve productivity across the sector. This means making the best use of the research and development funding available from government, as well as investing effectively to ensure we have the required skills across our workforce.”

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Hadley Group acquires Hadley Steel Framing Ltd

Ben Towe, Group Managing Director at Hadley Group

Global cold rolled manufacturer of steel solutions with real world applications, Hadley Group is pleased to announce the acquisition of Hadley Steel Framing Ltd (HSF). HSF will continue to operate as a stand-alone business but will have the resources of the wider Hadley Group available for support.

Hadley Group originally acquired a 50% stake in Hadley Steel Framing Ltd (HSF) ten years ago, supporting the growth of the company by manufacturing and delivering its cold rolled steel framing products. This latest development in HSF’s ownership means it will be business as usual with no changes to the manufacturing or delivery aspects of the business. Hadley Group will provide HSF with the stability and security that comes with being part of a large international group.

Hadley Group operates across the globe, providing a significant breadth of product solutions across a diverse market. The company’s expertise, market insight and manufacturing capabilities have positioned it as a world leader in advanced cold rolled steel technology.

HSF is a future market leader in steel framing design, assembly and installation with core strengths in its bolted system certified to 12 storeys. The company’s expert technical, structural and design ability ensures it can provide a single solution from concept to completion on building projects in all sectors, both on site and off site.

Ben Towe, Group Managing Director at Hadley Group, said: “We view the acquisition of HSF as highly complementary to our other current construction product offerings and intend to support them as they continue their progression in the markets they serve. Architects, specifiers and contractors trust HSF to deliver industry standard and bespoke construction solutions on a world stage and we are delighted to confirm the addition of HSF into the Hadley Group.”

The acquisition complements both company’s growing reach with the announcement coming soon after Hadley Group’s acquisition of EWS (Manufacturing) Ltd.

Hadley Steel Framing has recently launched a new website which showcases all of their products and expertise. For more information on HSF, please visit: www.hadleysteelframing.com

For more information about Hadley Group, please visit: www.hadleygroup.com
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£9m to help build 200,000 homes in new garden towns

A £9 million cash injection to speed up the locally-led building of new garden towns and villages across the country has been announced.

The Garden Communities project is expected to deliver 200,000 properties on large sites by 2050, and the latest funding will help get 21 sites ready for development.

The government project is helping ambitious councils get well-designed homes built on large sites, and the money will help pay for master-planning and technical studies.

Work is already underway on 10,000 properties across the country in garden towns and villages, with 36,000 expected to be underway or completed by 2022.

Housing Minister Kit Malthouse MP said “We have not built enough homes in this country for the last three decades, and we are turning that around as we work towards our target to build 300,000 properties a year by the mid-2020s.

“This £9 million funding boost is giving councils the support and cash injection they need so they can finish planning new developments and get diggers on site.”

The developments being funded include a 2,000 home site for custom and self-builders in Bicester, on land purchased by the council from the Ministry of Defence.

It also includes developments in Basingstoke, Didcot, Taunton, Harlow-Gilston and across Northamptonshire where work is already underway on the first phase of developments.

The funding will be administered by Homes England.

Place | Capacity award | Homes
Aylesbury | £420,000 | 15,000
Basingstoke | £695,000 | 10,000
Bicester | £770,000 | 13,000
Harlow & Gilston | £715,000 | 24,000
North Essex (Colchester, Tendring & Braintree) | £1,000,000 | 43,000
North Northants (Corby, Kettering & Wellingborough) | £725,000 | 33,000
Otterpool Park, Folkestone | £1,250,000 | 10,000
Taunton | £550,000 | 15,000
Bailrigg | £100,000 | 3,500
Culm, Mid Devon | £300,000 | 5,000
Dunton Hills | £100,000 | 3,500
Halsnead | £300,000 | 1,589
Handforth | £150,000 | 1,650
Infinity, Derbyshire | £150,000 | 3,200
Longmarston | £300,000 | 3,500
Longcross | £125,000 | 1,700
West Oxfordshire | £150,000 | 2,200
Tresham | £300,000 | 1,500
Welbourne | £300,000 | 6,000
West Carclaze | £300,000 | 1,500
St Cuthbert’s, Carlisle | £300,000 | 10,000

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Councils warn of ‘severe’ need for affordable homes

A report published today by APSE (Association for Public Service Excellence) and written and researched by the TCPA finds that 98% of UK councils surveyed describe their need for affordable homes as either ‘severe’ or ‘moderate’.

UK councils are becoming increasingly unable to meet demands for affordable housing and 98% now describe their need as either ‘severe’ or ‘moderate’, with only 1% claiming that their need is not substantial.

The survey of 166 local authorities in Britain highlights the pressure on councils to meet the growing demand for affordable housing due to a lack of new homes being built and that many of those that are being built are not affordable to those in need.

The research highlights the cumulative impact of existing housing and planning policies in England—such as the 1 per cent annual rent reductions in the social rented sector and the continued deregulation and reform of the planning system—have reduced the ability of councils to secure genuinely affordable homes available for social rent.

Kate Henderson, Chief Executive of the TCPA, said “Our research reveals that Britain is facing an acute housing crisis with councils across the country increasingly unable to meet the need for affordable housing.

“The government must make tackling the housing crisis a priority. An ambition to increase housing numbers is not enough, we need to ensure that the homes that are built are affordable and well designed.”

By exploring a range of issues faced by councils, this study has identified how local authorities are already taking a more active role in housing delivery through entrepreneurial approaches, such as setting up local housing companies and innovative approaches to partnership working. Over two thirds (69%) of councils surveyed said that they already had or were thinking about setting up a local authority housing company either on their own or in partnership.

Paul O’Brien, Chief Executive of APSE concluded “A new wave of council homes would help support local economic growth, jobs and skills in our economy; housing could be an effective driver for a renewed industrial strategy but to achieve this we need to place local councils at the heart of delivery on housing need. That means the Government must provide the financial freedoms and flexibility for councils to deliver solutions to our chronic housing shortage.”

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Government backs plans to create new homes and jobs over next five years

Plans for public-sector land to be developed, which aim to bring forward 10,000 new homes, 14,000 new jobs and save taxpayers £37million in running costs.

Development plans which could see more than 10,000 new homes built across England and 14,000 new jobs created by 2024/25 are to be brought forward through a £15million government project.

The One Public Estate programme was launched in 2013 to make better use of public-sector sites, free up space for new homes and create jobs.

It encourages the emergency services, local councils and government departments to work more closely together by sharing sites and creating public-sector ‘hubs’ – where services are delivered in one place. So far, the programme has saved taxpayers £24million in running costs, created 5,745 new jobs and released land for the development of 3,336 new homes.

The latest round of the programme will see money and support given to more than 100 local public-sector partnerships across England, to bring forward proposals for a range of new projects on public-sector sites.

These include:

  • £680,000 for projects in Waltham Forest, including proposals to bring forward the redevelopment of the 100-year-old Whipps Cross Hospital and sites in public and private ownership for housing development in the Forest Road Corridor
  • £505,000 for projects in Devon and Torbay, including the regeneration of land around St David’s station in Exeter
  • £405,000 for projects in Northamptonshire, including plans to release land around Kettering railway station for the development of new houses and station improvements
  • £410,000 for projects in Worcestershire, including delivering new housing and regeneration around Redditch station, as part of the Rail Quarter development

The Minister for Implementation, Oliver Dowden, said “Getting the best use out of publicly-owned land can help to regenerate our towns and cities and give people improved access to the services they need.

“This programme shows that when government works smarter, with public authorities coming together, taxpayers get better value for money, new jobs are created and space is freed-up for vitally needed new homes.”

The One Public Estate programme is a joint initiative between the Cabinet Office, the Ministry of Housing, Communities & Local Government and the Local Government Association. It now covers 95% of all local authority areas in England.

Funding for the latest round of the programme will help with the creation of feasibility studies and masterplans for the potential development sites.

It is hoped the work will bring forward savings of £37million in public-sector running costs and allow the redevelopment of a large number of brownfield sites.

The Minister of State for Housing, Kit Malthouse, added “This government is committed to helping more people get on the housing ladder and restoring the dream of home ownership for a new generation. The One Public Estates programme will not only help more people find a home of their own, but also help create jobs and save taxpayers’ money.

“The latest projects to share £15million of funding will make a real difference to local communities and provide better services to residents.”

Lord Porter, Chairman of the Local Government Association, concluded “I’m pleased to see One Public Estate continue to grow from strength to strength. This latest round will see the programme now deliver more than 650 projects in total, all of which support councils to work with the wider public sector to deliver the best public services and place for their local communities.

“The delivery of new homes remains a national priority and with 95% of councils now part of the programme. It’s clear to see that local government remains committed to building the right homes for the places they serve.”

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A slow start to the year?

The RICS UK Residential Market Survey for January highlights that 2019 is off to a slow start, showing a subdued backdrop as enquiries, sales and new instructions all fall further.

In the near term, contributors sense little prospect of a turnaround, as concerns over the potential impact of Brexit, alongside affordability constraints continue to cause buyers and sellers to hesitate. However, expectations at the 12-month horizon are modestly positive.

During January, new buyer enquiries fell again at the headline level marking the sixth successive monthly decline. What’s more, demand declined to some degree across virtually all parts of the UK. Scotland was a slight exception, but even there the trend was only flat.

Alongside weakening demand, the number of new properties being listed on the sales market also deteriorated, with the net balance reading of -25% the weakest since July 2016.

Rounding off a subdued month for market activity, agreed sales also fell further, with the pace of decline seemingly gathering momentum compared to December.

Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market, although whether that will be sufficient in London and parts of the South East where affordability remains stretched and the tax changes are most penal remains to be seen.

A brighter outlook for the next 12 months?

Sales expectations for the coming three months remain downbeat, both at the national level and across most parts of the UK with expectations negative in 11 of the 12 regions/countries covered. The outlook over the next 12 months is stronger, however, as a headline net balance of +16% of contributors are expecting sales to rise.

Prices also continued to slip, as the headline price indicator declined for the fourth month in succession, with the net balance easing to -22%. When broken down, London and the South East continue to display the weakest readings, followed by East Anglia and the South West. In these regions the strong price growth over the past six years has left affordability looking stretched, with the high prices a key factor hampering demand. Elsewhere, prices continue to rise in Northern Ireland and Scotland.

Mixed news in the lettings market

Across the lettings market, tenant demand rose modestly in the three months to January (seasonally adjusted series). It has now picked up in each of the last three quarters. Nevertheless, nationally new landlord instructions continue to dwindle, remaining in negative territory for an eleventh successive quarter. Respondents expect rents to rise by roughly 2% over the next 12 months, and at the five-year horizon, averaging 3% each year.

Simon Rubinsohn, RICS chief economist, said “Although some contributors to the survey have taken comfort from a better start to the year than anticipated, a larger proportion are continuing to find the market a difficult one in which to do business.

“Resolution of the Brexit negotiations is widely seen as critical to encouraging potential buyers back into the market, although whether that will be sufficient in London and parts of the South East where affordability remains stretched and the tax changes are most penal remains to be seen.

“Meanwhile, the lettings market is continuing to see instructions fall away as investors respond to the emerging fiscal and regulatory landscape. This is resulting in feedback consistent with further increases in rents across the country, to a greater or lesser degree, over the next 12 months.”

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English councils to receive over £50 million for Brexit preparations

Local authorities across England will receive a share of £56.5 million to help support their preparations for Brexit.

The Treasury announced in December that MHCLG would receive £35 million to prepare for Brexit. MHCLG has now added an extra £21.5 million funding using finance from its 2018 to 2019 budget.

Councils will receive £20 million this financial year (2018 to 2019) and £20 million in 2019 to 2020 to spend on planning and strengthening their resources.

A further £10 million will be available in the next financial year (2019 to 2020). This funding is intended to help local authorities with specific costs which may arise following Brexit.

£1.5 million will be allocated in 2018 to 2019 only to local authorities facing immediate impacts from local ports, with the decision on the allocation and distribution of that funding to be announced shortly.

A further £5 million will be split by teams in the Ministry of Housing, Communities and Local Government, local authorities, and Local Resilience Forums for specific purposes such as strengthening preparations and supporting communities.

The funding will help councils to adapt to the changes caused by Brexit, ensuring their local authority is prepared ahead of 29 March, whilst also protecting vital local services.

Councils will decide how to allocate their funding. It is expected that money will be spent on resources like recruiting extra staff to ensure councils have the capacity to provide timely and accurate information to residents who have questions on how Brexit will affect them.

Communities Secretary Rt Hon James Brokenshire MP, said “Local authorities have a critical role to play in making a success of Brexit in their areas.

“I’m determined to ensure councils have the resources they need, which is why I’m releasing £56.5 million of extra finance to help them to deliver essential services and keep residents well-informed.

“I will continue to work closely with local leaders to ensure they are prepared to respond to any Brexit scenario.

“This funding will not be the only resource councils receive from central government to fund Brexit costs. The government has been clear that departments will assess and, if appropriate, fund any potential new requirements of councils as part of EU Exit work they are undertaking.”

The Secretary of State will also continue to engage with the sector through the EU Exit Local Government Delivery Board and regular communications with stakeholders across the sector.

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Alarm bells sound for construction as output plummets

Rising costs and uncertainty relating to Brexit are to blame for the sharp drop in output growth in January 2019, the Federation of Master Builders (FMB) has said in response to the latest PMI data.

The January 2019 PMI data revealed a fall from 52.8 in December to 50.6 in January, against the neutral reading of 50.0. January data pointed to a loss of momentum for the UK construction sector, with business activity growth grinding to its weakest for ten months.

Commenting on the results, Brian Berry Chief Executive of the FMB, said “The latest PMI data shows a slowdown in growth in construction with business activity growth easing to its weakest for ten months. The ongoing political uncertainty is partly to blame for this set-back. Political uncertainty is the enemy of construction firms that rely on the spending power of homeowners to commission home improvement projects. The UK is set to leave the EU next month, and yet we are still none the wiser about what the future holds. Given these intense headwinds, it should not be surprising that the sector suffered such a sharp decline.”

“Alongside the political uncertainty, the cost of doing business is also rising for construction firms up and down the country. Material prices have been rising steadily since the depreciation of sterling following the EU referendum. Looking ahead, material prices are expected to continue to cause a headache for the construction industry with recent research from the FMB showing that 87% of builders believe that material prices will rise in the next six months. What’s more the construction skills crisis means that key trades are extremely difficult to recruit and the upshot of this is rising wages in construction. Tradespeople know they can command higher salaries than they did preciously as workers are scarce, and this means a squeeze in margins for firms. This will only worsen if the post-Brexit immigration system that the Government has planned goes ahead. If the sector isn’t able to draw upon crucial EU workers of all skill levels, who have so far served to mitigate this shortage, the slowdown of growth will continue.”

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Construction firms lose £1.8bn in invoice fraud

According to the research published by Tungsten, construction firms lose £1.8bn in invoice fraud Cyber-crime costing average construction business £1,948 per year. This amounts to £1,948 per construction business.

Concern about the scale of the fraud is greater in the construction industry than any other sector, with a staggering 71% of business owners troubled by its increase, compared to a national average of 54%. They view it as the single biggest threat facing their business – more so than losing a major contract, a member of staff or competitor activities.

Of the construction companies surveyed, 60% have received a fraudulent or suspicious invoice  – this is significantly more than any other sector and the national average of 47%. Tactics have included: viruses embedded in attachments; unknown invoices attached to an email or sent by post; false changes to bank details and sending duplicate invoices.

Tungsten’s research exposes the need to crack down on fraud in the UK and is backed up by the Government, who in response launched a taskforce in 2016 to combat fraud of all types. The Joint Fraud Taskforce consists of representatives from the City of London Police, National Crime Agency, Financial Fraud Action UK, the Bank of England, and chief executives of the major banks.

Worryingly, not every company is aware of the high stakes – 11% of construction businesses would take no action if they received a suspicious invoice and 6% wouldn’t know what to do. Only around half (54%) would contact the police or a reporting service like Action Fraud, showing that there is still an education job to do in terms of knowing how to handle cyber-crime.

Richard Hurwitz, CEO at Tungsten, said “Construction firms face all manner of challenges, and it’s telling that cyber crime looms as one of the biggest. It seems particularly prevalent within the construction industry possibly because many contractors have minimal back office support and therefore it is easier for fraudsters to get away with their tactics. What’s most troubling is that it needn’t be like this as there are steps companies can take to protect themselves.

“Technology such as electronic invoicing can help construction companies battle invoice fraud as only confirmed suppliers can upload their invoices and then these are validated before they are paid, potentially saving firms thousands of pounds. Tungsten currently handles more than 15 million invoices a year, with firms in 192 countries around the world transacting across the network.”

Pauline Smith, Head of Action Fraud, the UK’s national centre for reporting fraud and internet crime, said: “It is important that employees are made aware of invoice scams and are ready to recognise the signs of fraud. Incidents of invoice fraud are underreported and therefore it is difficult to know the true scale of this fraud type. However what we do know is that this type of fraud prevails across all types of business and no one type of industry is immune. Those organisations that are worried they may fallen victim to fraudsters should always report to Action Fraud.”

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New research shows how used tyres can help protect bridges

In UK alone, 50 million tyres are discarded each year. With an ever increasing volume of vehicles in the world, the disposal of spent tyres is a serious issue. Often dumped in landfill, these tyres pose untold risk to health, safety and the wellbeing of our environment. However, used tyres do have their uses. For example, one such material that is made from discarded tyres could double the resilience of structures in disaster prone regions, ensuring safe and sturdy infrastructure whilst simultaneously reducing waste.

New research published in the Journal Earthquake Engineering and Structural Dynamics has described a new method of protecting bridge infrastructure in disaster-prone regions using used tyres that may otherwise be sent to landfill.

Academics from the Universities of Surrey and Thessaloniki (Greece) looked at how bridges, in particular Integral Abutment Bridges (IABs) react to stress and how simple measures could be taken to protect this vital infrastructure from wear-and-tear, as well as in the event of extreme dynamic impacts such as earthquakes.

Lead author, Dr Stergios Mitoulis of the University of Surrey explained, “Bridges are important infrastructure assets, which are costly to construct and maintain. Their maintenance is a major challenge in most developing countries and significant investment is required to ensure they remain safe and usable, especially in disaster situations.”

“In developing countries especially, there is a need to build bridges using simple and inexpensive methods. This had led to a type of bridge known as an integral bridge becoming increasingly popular which is a simple frame structure with no extra parts such as bearings or expansion joints, it is maintenance-free but has limitations meaning that they can only be used over short lengths. Where the bridge meets the land the soil moves and shifts and in times of stress this can lead to extended damages or collapse. The longer the bridge, the greater the risk of collapse.”

The challenge for the researchers was to find an inexpensive and effective material to bolster bridges, providing support but also providing a buffer able to withstand the force of earthquake situations regardless of the length of the bridge. The team turned to conventional tyres, of which 50 million are discarded in the UK alone each year, and which were banned from the UK’s landfills in 2009. The waste tyres will be used to create a new product, called the isolator, namely a flexible and elastic layer of reused tyres. This flexible layer will be used to absorb movements, reducing costs of repair.

“As with many of the challenges we face in engineering, the answer came from an unexpectedly simple source,” explained Dr Mitoulis. “We were looking for a readily available, cheap and effective material that would keep its cool under pressure. That’s when we thought about the possibility of recycling common tyres and putting to good use a material destined for landfill. We use old tyres to create an aggregate that effectively provides double the performance of conventional designs when movements due to earthquakes or temperature changes are simulated.”

The new design will eventually allow for safer and sturdier bridges in areas that do not have the means to erect expensive structures that require extensive maintenance. The team will now look for new market opportunities in diverse infrastructure assets that are expected to be benefitted by these recycled isolators, including quay and retaining walls and building foundations.

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