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.

Builders back the high street

In this weeks Autumn Budget, Chancellor Philip Hammond outlined positive steps that need to be taken in order to address the housing crisis and breathe new life back into our high streets. This is not only great news for the builders who will carry out the works, but also for residents of the countless forgotten towns and cities across Britain, whose people stuggle to make a living and get by on empty high streets dominated by boarded up windows and To Let signs.

Commenting on the Budget 2018, Brian Berry, Chief Executive of the FMB, said “It is important that the Chancellor has recognised the importance of investing in our high streets. He has announced a £675 million Future High Streets Fund to allow councils to rejuvenate town centres. It is estimated that as many as 300,000 to 400,000 new homes alone could be created by making use of empty spaces above shops on our high streets. This is space just waiting to be turned into residential accommodation. There is a pressing need to re-invent many of our town centres in light of changing patterns of retail and leisure. The Government should be applauded for its ambition to safeguard the life of our high streets.”

“We would urge councils to take this opportunity to look again at how they can work with local builders and developers to make better use of existing town centre building, and facilitate the development of wasted space above shops. A recent report titled Homes on our High Streets from the FMB puts councils at the heart of the solution and suggests some practical ways for them to facilitate the development of wasted space above shops. Retail will always be an important element of vibrant high streets, but there is plenty we can do on a small scale to help convert unused and under-used space in to attractive residential units. This will both boost the supply of new homes and help breathe new life back into our high streets. What we must avoid is perfectly good space lying empty and achieving nothing in terms of boosting the local economy or housing individuals.”

“We are also pleased that the Chancellor has today announced £1bn to guarantee capacity to support lending to the SME housebuilding sector. This will be implemented by the British Business Bank, working with Homes England. Many small-scale house builders continue to experience real difficulty in accessing the finance they need to build homes, and it is often the smallest scale builders that experience the greatest problems. This new funding will help to speed up the delivery of homes and lead to a more diverse and resilient housing supply.”

Is your town struggling to survive? Tweet us a picture of your town’s lonely highstreet and copy in @PhilipHammondUK; let’s show the government where this money needs to be spent!
/0 Comments/by

Autumn budget – industry comment

This week Chancellor Philip Hammond delivered his autumn budget to the chamber. Touching on key issues such as the housing crisis, skills shortages, Brexit, apprenticeships and planning reform, the latest budget included much for the construction sector to sit up and take note of.

The Chancellor has previously promised 300,000 new homes a year by mid-2020s. Will the range of measures signalled in the latest Budget be enough to achieve that ambitious target? Are enough steps being taken to address some of the key issues facing the construction industry? Buildingspecifier.com catches up with thought leaders from across the sector to see what they have to say in response:

Modular construction

Brendan Sharkey, head of construction and real estate at top 15 accountancy firm MHA MacIntyre Hudson, believes that the future of construction is modular . He said “One of the most impactful things Philip Hammond could do to support the industry is to target tax relief at small to mid-tier firms to encourage them to adapt productivity enhancing approaches like modular construction.”

“Modular construction is the future for large parts of the industry, as the government itself frequently tells us. This technique removes the weather from consideration, and brings factory-style efficiency and better quality control into the production process. Larger construction firms already use modular production, but it needs to percolate down the food chain. One way to ensure this happens would be for the Chancellor to put his money where the government’s mouth is, and to offer extra plant and machinery relief for small to mid-tier businesses who want to invest in modular development.”

Infrastructure

Rob Oliver, Chief Executive of the Construction Equipment Association (CEA) commented: “The pre-announced commitment of some £30bn to roads repair and maintenance is extremely welcome. This is not only good news for motorists but will provide an additional boost to the plant hire sector. The hope is that the money will be invested in machines and methods which make those repairs effective long term – not just commissioning low cost, short-term, sticking plaster solutions.”

“The Chancellor specifically recognises that the investment in road, rail and infrastructure is set to power the economy forward. This is good news for the construction industry that is at the centre of this.”

“Interesting to see increased funding for the Transforming Cities programme – up to £2.4 billion. This will help facilitate some long needed local development projects.”

Home ownership

Kevin Roberts, Director, Legal & General Mortgage Club said “The first Stamp Duty exemption has already helped 121,000 first-time buyers. This extension to Shared Ownership properties of up to £500,000 is very welcome news for buyers up and down the country – even better to hear that it will be applied retrospectively for homeowners since the last Budget. The Government clearly recognises the benefits of Shared Ownership as a genuine option for individuals, couples and families who want to become homeowners. Hopefully, this exemption will now bring about even more awareness of the scheme and make it as widely recognised as other high profile tenures such as Help to Buy.”

Refurbishment

In response to this week’s Autumn Budget, specialist insurer Ecclesiastical is urging the government to reconsider reducing VAT on repairs and approved alterations to listed buildings.

Faith Kitchen, Heritage Director at Ecclesiastical said “We’re disappointed the government hasn’t considered reducing VAT on repairs and approved alterations to listed buildings in the Budget.”

“We strongly support organisations such as the Heritage Alliance and the Listed Property Owners’ Club which have argued the VAT on repairs gives an unfair tax advantage to developers and penalises owners of historic buildings, many of whom are private individuals, who are facing higher repair and maintenance costs.”

“As the UK’s leading insurer of Grade I listed properties and with over 130 years’ experience we are passionate about protecting the country’s historic and iconic buildings and structures. Reducing VAT is vital to help organisations and owners of listed properties protect such an important part of the nation’s heritage.”

“We need to do more to support the custodians of Britain’s heritage properties, and while unfortunately this hasn’t been addressed in today’s Budget, we urge the government to reconsider reducing VAT to 5% on repairs and approved alterations to listed buildings.”

Skills gap and apprenticeships

Duncan Green, managing partner leading property, construction and infrastructure consultancy Pick Everard said “I am pleased to hear that Mr Hammond has announced a £695m initiative to help small firms hire apprentices. I believe that apprenticeships for both males and females in construction are crucial to the future of the industry, especially because of the skills gap, and training needs to remain a top priority if we’re to see real change in the UK’s infrastructure.

“Essentially, skills and training are how we will see the high wage, high skill economy of the future.”

Housing

Paul Butterworth, Partner, Ashfords LLP Real Estate Team commented “The problems in housing do not merely mean that someone doesn’t have a roof over their head, but it is vital that other areas which affect those in need, such as mental health provision are also recognised as part of the problem. Therefore, the Chancellor’s specific mention of mental health provision being part of the NHS 10 year plan and the expansion of children’s social care have to be good news in providing funding for support services. There will always be arguments as to whether this is new money or simply filling a hole which has arisen following austerity. It is at least a recognition of the need for a joined up approach to the issues faced by those most in need.

“The £675m “Future High Streets Fund” mentions facilitation of redevelopment for under used commercial into residential property. This is likely to mean a change to allow for permitted development rights, rather like the policy of allowing conversion of offices to residential without the need for a specific planning consent.

“A further £500m for the Housing Infrastructure Fund again underlines the importance of housing and offsetting from developers the costs of infrastructure on major schemes to help unlock housing developments.

“The extension of SDLT exemption on shared ownership properties valued up to £500,000 purchasing a £300,000 share, sorts out an anomaly in the tax system whereby they were caught by an SDLT hit whereas buying 100% didn’t give rise to this. It’s interesting that this is applied retrospectively so is this going to be claimed via the individual tax code.

“All in all a reasonably positive housing budget, not necessarily adding anything new but follows the trend from previous budgets.”

Investors

Melanie Leech, Chief Executive, British Property Federation said “The Government should be careful in how it targets these measures that will be consulted upon in early 2019, as an additional surcharge on large-scale overseas investors could put investment in housing delivery at risk. We estimate that 22,000 build-to-rent homes, 15 per cent of the sector’s pipeline, are reliant on funding from overseas investors such as pension funds. Making it more expensive for these institutions to invest won’t help deliver these much-needed homes.

“A new tax relief for commercial property owners is a real surprise. This move brings the UK more closely in line with the many other countries that already provide tax relief for the cost of building commercial property, making the UK more attractive to invest in. It makes investing in new and refurbished buildings cheaper from a tax perspective, and is a welcome move.”

Planning

The CLA represents landowners, farmers and rural businesses across England and Wales who together, manage more than 10 million acres of rural land. The organisation has reacted to the Chancellor’s Budget.

On Sir Oliver Letwin’s review of build-out rates, CLA President Tim Breitmeyer said “We are pleased the Letwin Review does not remove the financial incentives for landowners to bring land forward for the building of much needed homes.

“However, we are concerned that planning authorities would be given the ability to unilaterally decide where large scale housing development should take place, backed up by the threat of compulsory purchase, irrespective of the wishes of the landowner. Compulsory purchase should only ever be a last resort. The primary focus should be on establishing effective partnerships with local landowners, not seeking to forcibly remove their property.”

/0 Comments/by

Experts warn that planning system is failing those in greatest need

Councils in the most deprived areas of England are meeting only a fraction of their requirements for affordable housing because the planning system is not set up to deliver homes for people in the greatest need, according to a recent report.

Between 2016-17, Blackpool, Knowsley and Pendle—whose residents take home some of the lowest incomes in the country—saw no new affordable housing delivered through the planning system and less than 7% of their requirement met by other means. On the other end of the spectrum, affluent areas including the Vale of White Horse were able to deliver 96% of their affordable housing using the planning system.

The planning system is one of the main drivers for delivering affordable housing in England, with 70% of councils saying they rely on it substantially to allow them to meet housing need. Local requirements for affordable housing are usually set as a percentage of overall housing delivered on a scheme. Councils have said deprived areas are being left behind by the current system because only high-value areas can meet developers’ profit expectations and still deliver affordable homes.

Figures show that although over half of councils have set a minimum threshold for genuinely affordable housing using their local plans, only 2% actually manage to achieve it.

Developers have traditionally managed to bypass local requirements for affordable housing by first submitting a scheme that meets the threshold, but later backing out of their commitment, claiming unworkable profit margins. The government attempted to address this problem earlier in the year by restricting the use of viability testing to only ‘particular circumstances’, although councils aren’t convinced that this will curb the problem. One official claimed that the changes will simply create new issues, which local authorities will struggle to react to.

The report also finds that councils often specify much lower numbers of affordable housing in their local plans than necessary because they believe that setting a level which meets their true requirement would deter developers from investing in their areas. This has seen deprived areas setting their target as low as 5% of new affordable housing—when the actual need is sometimes as high as 84%­—but still seeing no new homes created for lower-earning residents.

Planning for Affordable Housing, which was funded by the Nationwide Foundation, makes a series of recommendations about what needs to change to the planning system to deliver more affordable housing for people in need across the country, and highlights the critical role that innovative councils are playing to secure more affordable homes.

Henry Smith, projects and policy manager at the TCPA, said “Although housing costs are often lower in more deprived areas of the country, they’re still out of reach for many local people. This research shows that the housing crisis truly is a national problem and not only limited to major cities and those living in the south east.

“Councils are being put in a difficult situation where they’re forced to furiously attract development to meet a five-year target imposed on them by the government, but at the same time negotiate with developers to make sure that what is actually affordable to people most in need.

“Many councils are responding to these difficult circumstances by acting in new and innovative ways, such as fast-tracking planning applications—considered a barrier by many developers—for schemes which meet higher levels of affordable housing. However, to truly make a dent on these numbers the government needs to immediately increase grant levels for councils and housing associations to enable them to deliver genuinely affordable homes. It is also essential that the government creates a definition of affordable housing, which links affordability to income and people’s ability to pay, rather than an arbitrary portion of the market rate.”

/0 Comments/by

Infrastructure and housing workloads keep UK construction sector buoyant

Workloads continue to grow in the UK construction and infrastructure sector, amid financial constraints and Brexit uncertainties, according to the results of the Q3 2018 RICS UK Construction and Infrastructure Market Survey.

RICS UK Construction and Infrastructure Market Survey, Q3 2018: Outcomes

  • Workloads continue to rise across all sectors and geographic regions
  • Infrastructure activity reaccelerates in all parts of the UK apart from Scotland and Northern Ireland, led by rail, roads and energy
  • New business enquiries and hiring increase despite tightening credit conditions

In Q3 2018, 20% more chartered surveyors reported that their workloads had risen rather than fallen (up from +15% in Q2). Unsurprisingly, given the recent support from Government, private housing and infrastructure workloads reported the strongest rise. Private housing workloads improved in Q3 with 30% more respondents reporting a rise rather than a fall, up from +25% in Q2. Meanwhile, the infrastructure sector also continued to strengthen this quarter, with 22% more respondents reporting a rise in workloads.

Looking at the infrastructure sector in more detail, rail, roads and energy are the subsectors expected to see the strongest growth in output over the coming twelve months. Following the go-ahead from Government on major projects such as HS2, Heathrow expansion and Hinkley Point C it is likely that these projects are underpinning the growth as work starts to get underway.

Meanwhile, activity across the private industrial and public non-housing categories improved modestly with net balances of 9% and 11%, respectively. A soft patch was most observable in public housing where the pace of workloads slowed from +12% to +7%.

Jeffrey Matsu, RICS Senior Economist said “hile ongoing capacity constraints have supported steady workload activity, the outlook going forward is far from clear. Recent Brexit-related indecision has added considerably to this uncertainty, but whatever the outcome, the pace of growth is expected to decelerate if only due to cyclical market conditions.”
Regionally, workloads are now reported to be increasing across all regions, with notable acceleration in the Midlands and East. The pace of private housing activity was strongest outside of London and the South East whilst Scotland and Northern Ireland saw the industrial and infrastructure sectors contract.

Despite the growth in recent workloads, financial constraints are reported by 75% of surveyors to be by far the most significant impediment to growth. This is down slightly from 80% in Q2. Anecdotal evidence suggests the difficulties to accessing bank finance and credit, along with cash flow and liquidity challenges are the main reasons for hampering current growth. Cyclical market conditions are also making an impact. In an additional question introduced this quarter, respondents were also asked how credit conditions have changed over the past three months. 12% more respondents reported a deterioration rather than improvement, with them expecting this to worsen over the next three and twelve months.

Near term, the outlook for the sector remains upbeat. Respondents have reported growth in the number of new business enquiries received and 42% more respondents have reported seeing more new hires in their company over the last three months.

However, the outlook for the economy as a whole has led to a reduced optimism for the construction sector over the year ahead, with respondents pointing to a softening in growth. 33% more contributors expect activity to rise rather than fall, down from 41% in Q2, and a net balance of 25% foresee an increase in hiring. As the pace of growth has broadly moderated, since 2014, anecdotal evidence suggests that the uncertainty generated around Brexit, as the date to exit draws closer, is the main reason for the relatively cautious outlook.

Brexit caution could also be a reason for the reported rise in tender prices, as +61% and +50% more respondents continue to envisage greater price pressures in the building and civil engineering areas, respectively. This is up from Q2 and continues to signal rising input costs and shrinking profit margins for businesses. Indeed, expectations for profit margins remained flat in the latest results.

Hew Edgar, RICS Head of Policy concluded “Despite challenging market conditions and Brexit looming, overall construction output in the UK is up on the second quarter of the year, and in particular it’s very positive to see that workloads for much needed new homes and infrastructure are increasing. For three years our respondents have highlighted workloads rising in private housing, however whilst driving the growth in construction, the UK is yet to reach Government’s target of 300,000 new homes per annum. The last time the UK built more than 300,000 new homes per year was in the 1970s when council houses accounted for around half of the total. Hopefully, this is set to change following the announcement to lift the Housing Revenue Account borrowing cap, which should encourage more local authorities to get back into building.

“We’ve long called on the government to secure funding to ensure Britain’s exit from the European Union doesn’t impact the delivery of vital infrastructure schemes, and encouragingly our latest survey revealed that rail, roads and energy are the subsectors expected to see the strongest growth in output over the coming twelve months, unsurprising given recent announcements in these sectors.”

/0 Comments/by

There are still many danger’s in the construction workplace.

From the 22nd – 28th October the European week for safety and health at work will focus on the prevention of risks posed by dangerous substances within the workplace.  In the UK 8,000 people die due to exposure of carcinogens at work and 13,500 new occupational cancer cases are registered in the UK.

Our industry accounts for the single largest number of occupational cancer cases with approximately 3,500 cancer deaths and 5,500 new cancer registrations each year in Britain.  The main factors involved in this are past exposure to asbestos along with exposure to silica, solar radiation, welding fumes and other contributing factors.

The European Agency for Safety and Health at Work’s (EU-OSHA) aims to reduce the exposure of workers to dangerous substances as outlined in their document ‘Healthy Workplaces Manage Dangerous Substances’.

“Protecting workers from exposure to carcinogens is one of the key challenges for occupational safety and health in the 21st century. We are working to highlight the scale of the problem and the importance of preventing exposure to carcinogens at work as part of our current campaign. We believe that by informing and educating workers and employers, as well as offering practical solutions, we can reduce and even eliminate exposure to carcinogens at work, thereby preventing needless suffering and deaths from cancer. said Christa Sedlatschek, Executive Director of the European Agency for Safety and Health at Work (EU-OSHA)

Although use of some of the most dangerous substances, such as asbestos, are now banned or strictly controlled, modern workplaces continue to expose workers to dangerous agents, such as highly toxic liquids and chemicals, as well as nanomaterials, the health risks of which are not yet fully understood but predicted to be even greater.” said David Parr, Policy and Technical Services Director at the British Safety Council.

“The most effective way of managing exposure to dangerous substances in the workplace is the creation of a risk prevention culture. When this happens, workers are pro-actively involved in risk assessment processes and are well informed about the dangers, as well as the control measures that can be taken to prevent or control them.

“Occupational exposure limits (OELs) for hazardous substances laid down in European OSH directives are crucial for the protection of workers’ health. With Brexit growing increasingly imminent, it essential that the well-established control regime relating to this issue is not compromised in any way by the UK’s withdrawal process”

The British Safety Council has been working with employers and decision makers for over 60 years.  Their vision is that no-one should be injured or made ill at work and they are delighted to be supporting EU-OSHA’s campaign through there monthly magazine ‘safety management’.

 

 

/0 Comments/by

Construction and EU procurement in No-Deal Brexit

In nearly six months’ time, on 29 March 2019 at 11pm UK-time to be more exact, the UK is expected to leave the EU.

The construction industry has already started to feel the impact of Brexit, and has ongoing concerns about, amongst other things, skill and labour shortages, the increasing price of materials, potential import and export tariffs.

Another area of concern for the construction industry has been how the system of advertising UK contracts for works, goods and services to EU companies would work post-Brexit and how businesses in the UK construction industry would be able to continue to bid for work, goods and services in Europe. This is important because many UK construction and consultancy businesses benefit and need to continue to benefit from smooth and open working relationships with EU businesses.

The government’s position

While the government continues to negotiate with the EU, in the hope of reaching agreement on a number of key points in the next few months, it is also starting to prepare for a “no-deal Brexit”.

As part of that, a couple of weeks ago the UK Cabinet Office released guidance entitled “Accessing public sector contracts if there’s no Brexit deal” which sets out how works, goods and services can continue to be accessed across the UK and EU in the event of the UK leaving the EU without an agreement in place.

The current system

At the moment, UK public bodies and authorities can procure certain works, goods and services for construction projects, including from EU businesses, by advertising them on the Official Journal of the European Union (OJEU) via Tenders Electronic Daily (TED). Equally, UK contractors, consultants, manufacturers and other construction businesses can bid to provide works, goods and services to EU public bodies through OJEU via TED.

This means that, for example, a UK public authority procuring specialist offshore trenching and vessel services for a government-funded offshore renewables project can receive tenders from specialist construction companies throughout the EU. It also means that UK companies, for example a UK architectural business, can tender for a commission to design a high profile development project in Spain on the same basis as companies based in other EU member states.

But post-Brexit, without a deal, this position would change.

The government’s guidance

There are two key messages in the government’s guidance “Accessing public sector contracts if there’s no Brexit deal”:

First, the UK is aiming to accede to the World Trade Organization (WTO) Agreement on Government Procurement (GPA). The GPA is an international trade deal that the UK currently participates in by virtue of its EU membership, but in a No-Deal Brexit world the UK will need to become a member itself. Whilst this is not a new position it does confirm that there has been no change to the government’s position on the need to seek GPA membership.

Second, the UK will develop a UK version of OJEU / TED, which it refers to as “a replacement UK-specific e-notification service”. The guidance states that:

  • UK-based contract opportunities would no longer be advertised to the EU on OJEU / TED and would instead be advertised on the new replacement UK-specific free-to-use e-notification service
  • This UK e-notification service will be available from “Exit day”
  • The requirement to advertise and ability to access other UK domestic systems will remain eg on Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI
  • UK businesses who wish to tender or bid for EU contract opportunities may continue to do so via OJEU / TED and
  • To enable the above, some changes to how the current procurement rules operate may be necessary, and these will be made by amending existing UK legislation.

The government has also said that further information will be provided nearer to the Brexit date.

So, has the government provided clarity?

In part, yes. The government has at least given some insight into its thinking about how works, goods and services can be advertised and procured across the EU in the event of a No-Deal Brexit.

However, there is very little detail around how this will work in practice.

In particular, while the guidance says that “Suppliers who wish to access contract opportunities from the EU may continue to do so via OJEU/TED”, it is not clear whether this position would be agreed to by the EU or whether they would have to access OJEU/TED as third country participants.

UK public authorities, construction companies, construction industry professionals and other construction industry businesses may also be concerned that, during a period in which they dealing with other challenges that may arise for their businesses due to Brexit (such as skill and labour shortages), they will potentially also have to familiarise themselves with a new UK e-notification service.

One thing is clear though, with no agreement yet reached with the EU, and with the Brexit date looming in a matter of months, the government should be working hard behind the scenes to flesh out its guidance, to provide certainty for UK public authorities and the construction industry before 29 March. We would hope to hear more on this by the end of this year.

 

Guest post written by WBD UK Lawers Kathrine Eddon, Head of Public Procurement and Michelle Essen, Managing Associate in Construction.

/0 Comments/by

Construction in the North West is ten times higher than national average

Recently published figures show that overall construction output in the North West is up 15% – 10 times the national average.

According to the Office of National Statistics, total construction output across the region is up to more than £4.6 billion in the 3 months to August 2018 compared to the same period last year.

Overall construction output in Great Britain for this period is up 1.5% compared to the same period last year meaning the North West’s increase is 10 times the national average.

The value of construction work on new housing in the North West has increased by £386 million this quarter compared to the same quarter in 2017 and output of new infrastructure projects has also risen during this period.

Northern Powerhouse Minister, Jake Berry MP, said “It’s wonderful to see how the Northern Powerhouse is driving investment in the North West and helping grow the construction industry to the tune of over £600 million.

“Anyone visiting the North West can see the huge number of construction projects underway and these figures show just how valuable they are.

“This construction boom is helping build new homes, new infrastructure and a stronger economy in the region.”

/0 Comments/by

UK has sixth-highest rate of excess winter deaths in Europe

Research reveals that the UK has the sixth-worst long-term rate of excess winter mortality out of 30 European countries. In addition, when taking into account cold weather beyond just the winter months, the UK ranks second-worst out of 30 European countries.

Over the last five years there has been an average of 32,000 excess winter deaths in the UK every year. Of these, 9,700 die due to a cold home – the same as the number of people who die from breast or prostate cancer each year. The fact that UK homes are amongst the least energy efficient in Europe confirms that these deaths are preventable.

Pedro Guertler, co-author of the report from E3G comments “The UK has one of the worst records on cold homes-related deaths in Europe and it is not only a public health tragedy, it is a national embarrassment. This epidemic is entirely preventable and E3G and NEA are calling on the UK Government to reinstate public capital investment in home energy efficiency to fix the cold homes crisis. As well as ending needless suffering and premature deaths, it would also address a wide range of national infrastructure priorities.”

Alongside existing private investment, E3G and NEA are calling on the Treasury to use public infrastructure capital – as opposed to revenue expenditure – to co-fund area- based energy efficiency schemes to systematically improve the quality of UK housing in every part of the country. The report says this is essential if the UK is to meet its fuel poverty and carbon emission reduction targets. Scotland, Wales and Northern Ireland have already been developing these programmes with great success but the UK Government has yet to back similar programmes in England and the number of insulation measures installed in UK homes has crashed by 90% since 2012 due to ill-judged cuts to home energy improvement programmes.

Peter Smith, the co-author from NEA added “As the UK experiences one of the harshest winters for several years, it is important to remember that this causes needless hardship, places health at risk and leads to premature death. Beyond the terrible scale of cold related winter deaths, people experiencing fuel poverty can also struggle with poor mental health and this can sadly lead to total social isolation and even suicide. This preventable tragedy must end. The UK Government must support the strong case for the re-introduction of adequate public capital investment – a necessity if we are to make the UK’s homes warmer and safe for human habitation.”

/0 Comments/by

Government to assist the 74% of construction companies being killed by late payment

A new announcement by Government to address the issue of late payment is expected to help the 74% of construction companies that have almost gone into liquidation due to the unfair practice.

The package of measures unveiled by the Small Business Minister Kelly Tolhurst will also reduce the hidden, human cost of delayed payment. According to research commissioned by the Prompt Payment Directory, 48% of the 400 construction companies polled reported depression, panic attacks, suicidal thoughts and anxiety as a result of late payments.

Late payment also affects a company’s ability to reliably predict cash flow, invest in training or even pay staff and bills.

The Government is pulling together strands that have existed for a while, but is now backing them with enforcement.

The small business commissioner will join the board of the Prompt Payment Code and measures will be put in place to remove signatories from the code’s list. This will help avoid the farce of Carillion and other similar companies being on the list despite their payment terms of 120 days being well beyond what could be considered reasonable.

The Government will aim to pay 90% of undisputed invoices within five days. Central and local government are not always prompt payers, often paying outside the terms of legislation. Having the Government lead by example will help change the culture.

There are also proposals that include consideration of how company boards can implement responsible payment practices and the promotion of accounting tools to help businesses manage payment processes.

While the Government has also highlighted its Mystery Shopper service that allows companies to report poor practice, it does not acknowledge the imbalance in the relationship between companies and their suppliers. Often the supplier carries much of the risk of the project in addition to being paid late. Suppliers in this position often do not report late payment because they do not want to jeopardise future work.

Neil Walters, national chair of the National Federation of Builders, said “Payments move from one business to another, but we should never forget the human cost of paying late. Enforcement is the key to making these government proposals work so that construction will no longer be the sector with the highest rate of insolvencies and all small businesses can stay open for business.”

/0 Comments/by

Government investment to overcome barriers to building

Investment to tackle issues on potential housing sites and get homes built in areas where they are needed most has been launched by Communities Secretary Rt Hon James Brokenshire MP.

Issues like land contamination, infrastructure requirements, and complex land ownership can present real barriers to building homes where they are needed most.

From this week, the government is intervening by providing 2 streams of investment – the Land Assembly Fund and the Small Sites Fund – for Homes England to deploy alongside their expertise. This will help release land to deliver 300,000 new homes a year by the mid-2020s.

The £1.3 billion Land Assembly Fund, will be used to acquire land needing work and get it ready for the market, making it less risky for developers to invest in and start building. Outside of London this work will be carried out by Homes England.

For public land owners or local authorities that are struggling to get building on land in their area, the £630 million Small Sites Fund will provide grant funding to speed up getting the right infrastructure in place to support home building on stalled small sites to provide the homes their communities need.

Communities Secretary, Rt Hon James Brokenshire MP said “We need to act on a number of fronts to build the homes this country needs.

“The availability of this investment will help us intervene in the sort of sites that aren’t yet ready to build on, or where developers have been put off.

“Developers can now get straight on with building homes, rather than overcoming the barriers to build. And in the same way we are also supporting councils that have land for housing, but need additional help to enable development.”

An example of Homes England acquiring land is Burgess Hill in Sussex, a site that desperately needed affordable housing, but which sat undeveloped for years. The national housing agency has stepped in, bought the land and is also delivering the infrastructure, so that the roads, schools and doctor’s surgeries are all in place for over 3,000 new homes that will now be built there.

Homes England Chairman, Sir Edward Lister said “Homes England is stepping in where the market isn’t working, unlocking land and releasing sites to those developers that are committed to providing homes at pace.

“The £1.9 billion announced by the government today will mean we can invest in crucial infrastructure and help local authorities to get more homes built on public land.”

The government will work closely with the Greater London Authority to help ensure targeted funding through the Land Assembly Fund and Small Sites Fund can deliver additional homes in the capital.

/0 Comments/by