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.

RIBA calls for progressive UK immigration policy post-Brexit

The Royal Institute of British Architects (RIBA) has published a new policy paper recommending the creation of a post-Brexit immigration system that ensures the UK job market remains open to skilled professionals from around the world.

RIBA’s Global by Design report (February 2017) highlighted that of their members identified access of skilled talent from across the world as vital to the future success of UK architecture. 40% of non-UK EU respondents said that they had ‘considered leaving the UK with earnest intent’ following the EU referendum result.

The RIBA Building a post-Brexit immigration system that works for UK architecture paper includes eight key post-Brexit recommendations to Government:

  1. Come to an agreement with the EU over the rights of EU citizens currently living in the UK, and UK citizens living in Europe, that includes continued recognition of professional qualifications, at the earliest opportunity
  2. Review the minimum appropriate salary requirements for Tier 2 visas and reduce these requirements for recent graduates or those working for small businesses
  3. Reduce the cost and administration burden on businesses seeking to become a visa sponsor for employees
  4. Re-introduce post-study work visas to allow international architecture students to develop their professional experience between Part 1 and Part 2 study
  5. Secure a transitional relationship with the EU that extends the freedom to study and work in the UK beyond the UK’s exit from the EU in 2019
  6. Include work visa quotas in new trade agreements
  7. Extend mutual recognition of professional qualifications via new trade agreements with priority countries including the USA, Australia and Canada
  8. Implement a system of priority access for business travellers to support architectural practices to do business in overseas markets

RIBA President Ben Derbyshire said “Our members are clear that Britain’s exit from the EU must not imperil our pre-eminent position as a magnet for the very finest talent from around the world. UK architecture has benefitted enormously from the contribution of European and non-European colleagues, who have enriched architectural practice in this country.

“The RIBA’s proposed immigration system aims to ensure that the UK can continue to embrace and attract people to live and work in the country. We are pressing the Government particularly on the urgent need for certainty for our European colleagues currently living in country. Many of our valued colleagues are drifting away, and there will be an exodus, no doubt, if we impose unreasonable burdens on those who are fully aware of the positive contribution they have been making to our pre-eminent position.

“The RIBA will continue to make the case for a Brexit that works for our profession and our built environment, from securing access to the talent and investment we need to survive to opening up the new trade opportunities that will support architects to thrive.”

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Public consultation reopens for controversial third runway at Heathrow

The previously shelved public consultation on the planned third runway at Heathrow has been reopened due to new evidence, according to the Department of Transport (DoT). It will seek to gauge public support for the plans in light of the new findings.

DoT has published a series of new reports relating to the environmental and human cost of expanding an already-bustling airport in a heavily populated area.

The government’s sustainability appraisal expects the plans to have a negative effect on air quality, noise and biodiversity. It also says that the Gatwick second runway scheme would cause less damage than either potential scheme at Heathrow. The plans will have to mitigate against any significant deterioration in air quality or the whole scheme could be thrown into jeopardy.

To build or not to build…

London’s airports are forecast to be full by the mid-2030s with Heathrow already operating at capacity and Gatwick at capacity during peak times.

This has left the government with the dilemma of either being framed as anti-business if it does not act to address capacity, or anti-environment if it goes ahead with expansion. It is worth noting that should they go ahead with construction, efforts to reduce greenhouse gas emissions by at least 80% on 1990 levels by 2050, as legislated by the Climate Change Act, will be seriously undermined.

A Heathrow spokesperson said “Expansion will support our plan to make Heathrow a great place to live and work, doubling the number of apprenticeships at Heathrow to 10,000, with fewer people impacted by noise than today, and an ambition for carbon-neutral growth.”

Attracting Controversy

A third runway at Heathrow would result in an extra 700 planes a day would pass through it. This equates to an extra 260,000 flights each year, increasing flights by 54% to 740,000 a year.

Paul Mcguiness, Chair of the ‘No 3rd Runway Coalition’ said “We are horrified that the government has even considered succumbing to the shameless, no-expense-spared browbeating of Heathrow, as the airport pursues its own narrow, financial self-interest.”

Friends of the Earth London campaigner Sophie Neuburg said “Airport expansion will bring more noise, pollution and misery to local communities.

“Bold and urgent measures are needed to head off the looming threat of catastrophic climate change. It’s simply pie in the sky to think we can build a third runway at Heathrow while keeping UK targets for slashing emissions.

“These short-sighted plans will also add to London’s pollution crisis. The courts have already warned the government to clean up London’s illegally dirty air as soon as possible – we need action now, not more empty promises tomorrow.”

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Industrial sector remains strong while retail suffers

Demand for industrial property space in Wales is significantly outstripping supply, according to the RICS Commercial Market Survey, Wales, Q3 2017.

Chartered surveyor respondents are reporting increases in occupier demand for industrial space and falling availability. They are also pointing to strong rises in interest from investors to purchase industrial property assets.

As a result, both rents and capital values in the sector are expected to keep rising in the three months ahead.

This is contrast to the retail sector, where occupier demand is reported to have been falling, and investor interest flat. As a result, short-term rent and capital value expectations in the retail sector have declined, according to the balance of surveyors.

Whilst there is variation between sectors, overall the commercial property sector in Wales remains stronger than in other UK regions, according to the survey. Like the industrial sector, office continues to perform well, with occupier demand and investor interest rising and expectations for rent and capital values in the three-months ahead still positive.

Chris Sutton, RICS Commercial Property Spokesperson said “With a growth in ‘last-mile’ logistics and steady demand from trade counter operators, the industrial sector has been very buoyant. This has mirrored activity in the capital markets with multi-let industrial investments in demand. In terms of the office sector, the announcement of the 266,000 sq ft public sector hub for HMRC in Central Square, Cardiff is the largest office pre-let ever agreed in Wales and this has given a further boost to the Central Cardiff Enterprise Zone.”

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Industry must rise to meet UK economy growth

Industry must rise to meet UK economy growth

The UK’s economy had higher than expected growth in the three months to September, reveals the latest figures from the Office of National Statistics released today.

According to the ONS, gross domestic product (GDP) for the quarter rose by 0.4%, compared with 0.3% in each of 2017’s first two quarters.

Services and manufacturing industries grew during the period. Industrial production rose in July and August but construction output fell.

The financial markets are now indicating an 84% probability that rates will rise from their current record low of 0.25% when the Bank of England’s Monetary Policy Committee (MPC) meets on 2 November.

Construction is crucial

Construction output in the UK is currently more than £110 billion per annum and contributes 7% of GDP. Approximately 60% of construction output is new build, whilst 40% is refurbishment and maintenance.

The industry accounts for approximately 3 million jobs, 10% of total UK employment and includes both manufacturing and services.

Construction is a high cost, high risk, long-term activity, and so it’s performance is a good indicator of the health of the wider economy. When the economy falters, construction investment often grinds to a halt. However, today’s announcement suggests that our economy is beginning to recover after a tumultuous time post-Brexit. It is imperative that the construction industry recieves the support it needs from government to help continue this upward momentum.

What do you think the industry needs from Government? Let us know in the comments section below, or reach out to us on twitter @BuildSpecifier
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Hinkley Point C UPDATE

EDF have handed a £99m construction deal which includes design, supply and installation of transmission facilities to Swiss-based firm ABB. The overall project is expected to cost a total of £18bn.

ABB will be responsible for the construction of the substations that will feed 3,200 MW of power to the grid, the installation of six Megavolt transformers, and transmission feeds to transfer power from the plant to the grid.

The deal takes the value of Hinkley contracts let by client EDF so far to £9bn.

Major deals to date include the £2bn civils contract for BYLOR, a joint venture between Bouygues TP and Laing O’Rourke, and the £208m earthworks deal won by a Kier and Bam Nuttall joint venture.

First concrete at the plant was poured in March this year as part of the construction of 7 km of gallery tunnels that carry the plant’s cables and pipes.

However, last week it was revealed that parts of these tunnels had to be demolished and replaced after issues were found with the concrete that had been laid.

Commenting on the infrastructure deal, Hinkley Point C managing director Stuart Crooks said “This major contract marks another significant step forward for the project.

“Hinkley Point C is bringing together companies and expertise from the UK, France and the world. Construction is fully under way and we remain firmly focused on what we need to deliver in the year ahead and beyond.”

From the beginning, Hinkley has been marred in controversy. According to leading protest group Stop Hinkley discharges from the proposed Hinkley Point C nuclear Power station could cause around 200 deaths across the globe over its 60-year lifetime.

The radioactivity of spent fuel from Hinkley Point C would amount to around 80% of the radioactivity of waste already produced in the UK.

Also, with the delivery cost being so high, questions have been raised regarding the true value of Hinkley for Britain. Studies suggest that energy efficient improvements could reduce the energy consumed in UK households each year the equivalent to the output of six nuclear power stations the size of Hinkley Point C.

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£2.5 million cash boost for garden towns

A £2.5 million cash boost to speed up the delivery of over 155,000 new homes across England, has been announced by the Communities Secretary Sajid Javid this month.

Nine locally-led garden town developments, from Bicester to Taunton, will each receive new funding to fast track the build out of these large housing projects.

The new funding will support local authorities and communities in delivering ambitious proposals, speeding up the progress of developments through additional dedicated resources and expertise.

Garden towns being supported by government are committed to delivering high quality, well-planed and well-designed new communities that will stand out as exemplars of good development in years to come.

The funding will support the development of 9 new locally-led garden towns at Bicester, Didcot, Basingstoke, Otterpool Park in Kent, Aylesbury, Taunton, Harlow-Gilston, North Northamptonshire and North Essex.

Communities Secretary Sajid Javid said “Locally-led garden towns have enormous potential to deliver the homes that communities need. This new funding will help support the construction of more than 155,000 homes in 9 places across the country.

“New communities not only deliver homes, but also bring new jobs and facilities and a big boost to local economies.”

The government’s Housing White Paper sets out bold new plans to ensure the housing market works for everyone, so that more people can have the security of a decent place to live.

Across England, government is supporting the locally-led development of 10 garden towns and cities, as well as 14 garden villages – with the combined potential to deliver 220,000 new homes across England.

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£15bn road upgrade plan updated to minimise congestion

Highways England has today updated its £15 billion road improvement programme to reduce the impact of roadworks on motorists and minimise congestion while improvements take place.

Plans for twenty-six road upgrades have been revised to reduce roadworks taking place in the same area of the network or on popular journey routes at the same time. This will mean less congestion for motorists as Highways England embarks on the biggest road upgrade plan for a generation.

The Supplementary Delivery Plan published today will see Highways England rescheduling its programme for the schemes between three and 24 months – meaning a number of schemes will be completed earlier than planned. All are still set for delivery as part of the Government’s first road investment strategy.

Jim O’Sullivan, Highways England Chief Executive said “Our update today is a sensible and responsible way to deliver major national investment in road infrastructure. It will keep our roads moving, deliver a lasting legacy for the country and ensure best value for money for the taxpayer.”

Now, more than two years into delivery of a £15 billion Government investment in motorways and major A roads, Highways England has already completed 18 major schemes, adding more than 190 lane miles of much-needed capacity to the nation’s roads.

The 10 schemes being brought forward are:

  • A19 Testos
  • A19 Downhill Lane
  • M56 junctions 6-8 smart motorway
  • M6 junctions 21a – 26 smart motorway
  • M6 junction 22 upgrade
  • A500 Etruria
  • M6 junction 10
  • M4 Heathrow Slips
  • A47 Acle Straight -small scale improvement
  • A47 and A12 junction enhancement

The 16 schemes being re-scheduled to smooth the timing and frequency of roadworks are:

  • A5 Dodwells to Longshoot widening
  • M3 junction 9 improvement
  • A31 Ringwood
  • M27 junctions 4-11
  • A47 North Tuddenham to Easton
  • A47 Blofield to North Burlingham dualling
  • M25 junction 25 improvement
  • M25 junction 28 improvement
  • A1 Birtley to Coal House
  • M60 junctions 24-27 and junction 1-4 smart motorway
  • A47/A11 Thickthorn
  • A47 Wansford to Sutton
  • A47 Guyhirn Junction
  • A12 Chelmsford to A120 widening
  • M25 junction 10/A3 Wisley interchange
  • M25 junctions 10-16

Highways England is obliged to ensure that investment in the road network delivers good value for money. Following a full review the Road Investment Strategy (RIS) programme some schemes require further development to achieve an acceptable return on investment. As a result, in addition to the 26 schemes above, 6 schemes have been paused for further review and consideration as part of future RIS planning process.

These schemes are:

  • A1 & A19 Technology enhancements
  • M11 junctions 8 to 14 technology upgrade
  • A12 whole-route technology upgrade
  • M53 junctions 5-11 smart motorway
  • A14 Junction 10a
  • M62/ M606 Chain Bar

Two further schemes required rework to achieve value for money; however, changes in local development plans mean that these schemes can be progressed, albeit in the early stages of Road Period 2. These are:

  • M5 Bridgwater junction improvements
  • A50 Uttoxeter Project B growth corridor project
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Sensational bounce back for infrastructure activity

Infrastructure bounced back sensationally in September with six major HS2 contracts awarded on the month worth a total of £7.2 billion. However, the same can’t be said for the remaining sectors in construction, including housing which saw new orders decrease for the first time in six months.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights the levels of construction contract values awarded in September across all regions of Great Britain. The overall contract value for September was £6.9 billion based on a three month rolling average, the highest monthly figure for almost two years. The strong total was largely based on the commissioning of the large HS2 contracts, which made up six of the top ten biggest projects in the month, whilst also masking the pitfalls across other sectors of construction.

Barbour

Across the industry, project numbers were down in September by 28.5% when compared to August, which was spread right across the various sectors of construction. Housing saw the biggest drop in contract values, decreasing to £1.8 billion, a 33 per cent drop on the month after consistently high growth since May and has up to now been construction’s most reliable source of high contract values over the course of 2017. Outside of Infrastructure, the only two other sectors that saw growth were Hotel, Leisure and Sport with minimal growth of 0.9% compared to August, and Medical & Health which increased by 10.4%.

Outside of the six HS2 projects, the £300 million Old War Office Building residential development in Westminster was the highest value project for September. This is followed by a new Amazon distribution centre in Bristol with a construction cost of more than £200 million – four times higher than the value of any other industrial project on the month.

Regionally, the West Midlands was the leading region for construction contract value with 35 per cent of the total, followed by London and the East Midlands with 28 and 15 per cent respectively, the three regions with HS2 contracts. The remaining regions counted for 1-4 per cent individual share of the monthly total contract value.

Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said “It was an unusual month for construction in September due to the £7.2 billion HS2 contracts, drastically boosting construction figures and depicting a strong, healthy industry, whereas without the six major contracts it was a poor month for contract values, highlighted by the housing sectors uncharacteristic decrease.”

“Nevertheless the HS2 projects will be a major boost to the workforces in the three located regions, providing thousands of jobs and sub-contracting opportunities.”

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Theresa’s £2bn announcement – in figures

To the critical acclaim of the construction industry, the government confirmed plans for a new generation of council and housing association homes yesterday. Funding for affordable homes will be increased by a further £2 billion to more than £9 billion. But how exactly will this money be used to boost housing? Buildingspecifier investigates:

The numbers of homes will be determined on type and location of housing, and bids received for funding. With a typical £80,000 subsidy, this £2 billion investment can supply around 25,000 more homes at rents affordable for local people.

Ministers also confirmed plans to create a stable financial environment by setting a long term rent deal for councils and housing associations in England from 2020.

The funding will further support councils and housing associations in areas of acute affordability pressure, and where working families are struggling with the costs of rent and some are at risk of homelessness.

This complements recent announcements on supporting tenants in the private rented sector and on extending Help to Buy.

The government’s Affordable Homes Programme will increase from £7.1 billion of public funding to £9.1 billion, and the £2 billion additional funding for affordable housing could lever in total investment by housing associations and councils of up to £5 billion.

Since April 2010, around 333,000 affordable homes have been delivered, including 240,000 for rent. More than twice as much council housing has been built since 2010 than in the previous 13 years.

As set out in the Housing White Paper, to help encourage more investment in social housing, government will create a stable financial environment by setting a long term rent deal for councils and housing associations in England.

Under the proposal set out this week, increases to social housing rents will be limited to the Consumer Price Index (CPI) plus 1% for 5 years from 2020. This will give social tenants, councils and housing associations the security and certainty they need.

Previously, the government’s affordable housing policy primarily supported ‘affordable rent’ – rents of up to 80% of local market level – and low-cost home ownership. This announcement now extends support for ‘social rent’ – which are lower rents, set according to national guidelines.

These latest measures reinforce this government’s approach to back housing of all tenures – with more social housing; extra security for those in the private rented sector; and helping people get onto the housing ladder.

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Theresa May speech – the view from construction

At an eventful Conservative Conference today PM Theresa May has announced an extra £2bn will be allocated to aid delivery of affordable housing in areas “where need is greatest.” She also confirmed an energy cap in a bid to alleviate fuel poverty. Buildingspecifier reports:

Affordable housing

At an eventful Conservative Conference today PM Theresa May has announced an extra £2bn will be allocated to aid delivery of affordable housing in areas “where need is greatest.”

“We simply haven’t built enough homes,” admitted May said, although she reassures that “help is on the way.”

“It won’t be quick or easy – but as Prime Minister’s I’m going to make this my mission.”

The Prime Minister highlighted that there will now be “almost £9bn” available for affordable housing which both councils and housing associations can bid for.

“We will invest an additional £2bn in affordable housing, taking the government’s affordable housing budget to £9bn. We will encourage councils as well as housing associations and provide certainty over future rent levels.

“In those parts of the country where need is greatest we will allow social rented housing to be built, at well below market levels, getting the government back into the business of building houses.”

Energy cap

The Prime Minister also revealed that caps on energy prices would be imposed under planned legislation. She gave a stark warning to energy firms that they faced a price cap on their “rip-off” bills under her new plans.

Draft legislation for the measure will be published next week, Mrs May revealed, as she accused firms of punishing loyal customers.

May commented “While we are in favour of free markets we will always take action to fix them when they are broken. We will always take on monopolies and vested interests when they are holding people back. One of the greatest examples in Britain today is the broken energy market. The energy market punishes loyalty with higher prices and the most loyal customers are often those with lower incomes, the elderly, people with lower qualifications and people who rent their homes.”

Industry reaction

Chief Executive of the National Housing Federation, David Orr said “In the aftermath of the tragic fire at Grenfell Tower, the prime minister said that we as a nation have not paid enough attention to social housing. Today, she is right to make a bold break with the past and commit to building the homes we need most – genuinely affordable homes for those on the lowest incomes.

“The additional £2bn will make a real difference to those let down by a broken housing market. Building homes for social rent will make work pay and help bring down the housing benefit bill in the long run by moving people out of costly private lets.”

Brian Berry, Chief Executive of the FMB, said “Despite the Prime Minister’s precarious political position since the General Election, Theresa May has today managed to take a braver and bolder stance on house building than any Prime Minister of recent years. The private sector will continue to expand the number of new homes it builds, particularly so if the Government succeeds in its aim of removing barriers that hold back small scale house builders. However, in the house building heyday of the 1950/60s, a healthy private sector was always complemented by significant levels of social house building. Indeed, we have only ever built at the level we need to keep pace with demand when both the private and public house building sectors have been firing on all fronts. In the 1960s, for example, we were building around 400,000 homes per year and half of those were social housing.”

“The Prime Minister’s plan is also an opportunity to help shape a stronger local house building industry. If councils can start to engage with smaller, local builders to deliver this new generation of council housing, it could further help to diversify the industry. This would also boost the capacity of the private sector through the provision of more public sector work. Indeed, the increased use of small and medium-sized building firms will limit the problem of land banking, as this is something small builders simply don’t do.

“There do remain however, some significant roadblocks to the Prime Minister’s vision. Following Brexit, the serious shortage of skilled labour the construction industry is already dealing with will be exacerbated if it becomes much more difficult for EU tradespeople, who have come to play a crucial part in plugging the industry’s chronic skills gap, to move to and work in the UK. Although the industry must seek to overcome this crisis by recruiting and training many more young people than we currently do, the Government must also be mindful and realistic about the continuing need there will be for skilled EU workers as it puts in place its post-Brexit immigration policy. Otherwise it will risk jeopardising the delivery of the bold new house building ambitions the Prime Minister outline today.”

Andy Sommerville, Director of Search Acumen, commented “Our country needs to embark on the greatest housing boom the UK has witnessed in a century. For decades, UK governments have neglected the critical issue of our nation’s housing shortfall and as a result we estimate by 2022 the UK will be short of a million homes.

“Theresa May’s pledge to invest an extra £2bn in affordable housing is the first building block to making up for years of under supply and we can only hope that this is not simply another empty promise to fix our broken housing market. Now that our leaders share the industry’s sense of urgency, we must act to build more homes and we must act quickly. The gulf between supply and demand is widening each day. For the property and construction industry, this is the cue for Britain to start building.”

Chartered Institute of Housing chief executive Terrie Alafat CBE said “We have been calling on the government to invest more in genuinely affordable homes for rent so the Prime Minister’s announcement of an extra £2 billion for affordable housing is very welcome.

“As we have been saying for some time, social rents, which are significantly cheaper than market rents, are the only truly affordable option for many people on lower incomes, so the recognition that we need more of these homes is a vital step forward.

“It’s also encouraging to hear that Theresa May agrees councils have a central role to play in building the homes we need at prices people can afford.

“The details of exactly how these new homes will be funded and just how many will be for the lowest social rents will be crucial. The number of homes for social rent funded by the government collapsed from 36,000 to just over 1,000 between 2010/11 and 2016/17. Reversing this trend will be a significant task – how much of this new funding will be dedicated to building these kinds of homes?

“There is much to welcome in these announcements and they are certainly an important step in the right direction, but we still need to do more if we are to finally build the number of truly affordable homes we need.”

 

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