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.

Autumn statement: Something feels different

Statements from the Chancellor of the Exchequer aren’t always cause for celebration, but this one has left us feeling cautiously optimistic. Chris Coxon, Head of Marketing at Eurocell plc, takes a view.

Wrapped up as the National Productivity Investment Fund – £23bn between 2017 and 2021 – Chancellor Phillip Hammond’s Autumn Statement outlines investments in housing, transport, digital communications and R&D. Within that there’s a £2.3bn housing infrastructure fund, £1.4bn for affordable housing and £1.7m for accelerated construction to speed up house building on public land. This is obviously welcome because of the pressing issue of housing affordability.

If the Government can pump-prime supply then it would be hoped eventually that the improvements in meeting demand would reduce prices – at least at the ‘bottom’ end – and enable the next generation of home ownership.

(As an aside, one topic rarely discussed in respect of housing affordability is how much money large mortgage payments and high rents take out of the real economy, such payments vanishing into institutions and funds and not into the high street).

We will have to wait for the detail of policy in the expected Housing White Paper, to be published ‘shortly’, according to the Treasury. There have been strong hints that offsite construction will feature strongly.

Admittedly, we’ve been here before: construction is a cyclical affair. When skills shortages threaten, thoughts turn to factory-based production; call it prefab, offsite, modern methods of construction, pre-manufacture or flying factories. This would represent a radical departure from how building products currently arrive on site, and caution needs to be maintained if whole sectors of manufacture are not to be detrimentally impacted by this.

The difference this time – maybe – is that this Government understands that its ambitious housing targets will not be met without a sea-change in how housing is delivered and – here’s the important bit – that policy must drive a change. To achieve its targets of 200,00 builds (some say 250,000 to 300,000 are needed) per year, the current methodology has to be challenged and the regime appears to at least be mindful of that, if not quite yet offering solutions.

The exciting bit, for us, was news of the creation of industrial strategy challenge fund – loosely based on the US’s DARPA programme. The areas which the fund will focus on will be decided in due course, yet let’s hope it doesn’t get too hung up on ‘funky’ tech, and encompasses more prosaic sectors such as ours.

Chris Coxon

And there’s something for innovators in the tax regime too. As the statement said: “To ensure the UK tax system is strongly pro-innovation, the government will review the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D”.

Depending on how both these initiatives play out, it sounds like good news at the moment and the right words and actions from Government provide some reassurance that our investment in innovation today will bear fruit tomorrow.

 

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Good news for construction in Autumn Statement

The extra resources announced by the Chancellor in today’s Autumn Statement for social housing and infrastructure investment will be welcomed by the construction industry.

The promised additional funding should help to address the need for more affordable homes and tackle the shortfalls in the UK’s transport infrastructure. It will also help to offset the impact of faltering in private sector investment on industry workloads.

Social housing providers already have a strong development pipeline, but the realisation of planned projects has been frustrated by recent changes in Government policy. It is vital that the measures announced in today’s statement are implement as soon as possible to enable projects to be quickly brought to site.

The provision of an additional £1.3 billion of additional funds for local and national road projects should help Highways England and councils to accelerate small scale improvements to address ‘pinch points’ in the road network. These schemes can potentially help tackle congestion and improve the UK’s competitive position.

Glenigan data reveals a firm pipeline of projects that have cleared the planning hurdles and could potentially be quickly brought on to site.

The Government’s commitment to supporting a sustained increase in investment in built environment is also encouraging. The new National Productivity Investment Fund promises to add £23 billion in high-value investment from 2017-18 to 2021-22, with the government target this spending at areas that are critical for productivity: housing, research and development and economic infrastructure.

Increasing productivity – put your money where your mouth is

Whilst the budget was a largely positive message for the construction industry, some are understandably weary of whether was has been promised will come into fruition and make Britain productive once more.

Paul Dossett, Partner at Grant Thornton, UK LLP, thinks that building roads and bridges will not solve the UK’s productivity problem. In response to the Chancellor’s announcements around boosting infrastructure, said “Our research with the CEBR has found that if UK productivity reached that of the G7 it would boost GDP by £382bn by 2025. While the government’s focus on infrastructure is welcome, building houses, roads and broadband networks is not the sole answer to addressing the productivity gap between the capital and the rest of the UK. Our Vibrant Economy Index shows the challenges faced by many places in the UK is cultural. Infrastructure is important but building roads and bridges will not solve the productivity problem alone. Instead, we need to start at school, build aspirations and community involvement, and focus on measures that will improve not only economic prosperity but increase the health, happiness and wellbeing of the population.”

Chairman Richard Steer of Gleeds Worldwide commented “The new productivity fund sounds good but we have heard this type of thing before and, whilst it is argued that it will be funded by increased borrowing, the main issue is confidence in the UK and this was not a budget that is going to help enhance the value in the sterling which effects costs, or persuade private sector funders to invest. It was an inward looking budget that appeared to deliver opportunities via raised borrowing. The increased profile of housebuilding initiatives is to be welcomed but until we know answers to questions like whether or not we will have free access to skilled labour, one feels it was more of a wish list than a reliable fiscal forecast.”

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Lack of women in construction could be worse than predicted

The number of females in professional construction roles is less than many analysts predicted, according to a survey carried out by specialist construction recruitment firm, One Way.

In a survey of professionals from across the industry, the firm found that 65% of respondents work in a company where less than 5% of the workforce is made up of women in an actual construction role.

When asked about the challenges for women in construction, over half (58%) stated that businesses themselves are to blame due to a range of issues such as stereotyping in the recruitment process and a lack of commitment from employers. Just over a third (35%) felt that it simply isn’t a popular career choice for women.

The survey – carried out as part of the firm’s #GirlsAllowed campaign which aims to bring together those in construction and education outlets to encourage more girls into the sector – also revealed that the majority (83%) believe that a lack of construction career education in schools is creating a concerning gap in female talent.

Reassuringly, over 80% of those surveyed agreed that they would personally get involved in an initiative to help address the lack of women in construction.

Paul Payne, Managing Director of One Way, commented on the findings “What is clear from these results is that employers need to do more to both attract more women into the industry and embrace them once on board. The results of the survey clearly demonstrate that the sector has a bad reputation when it comes to hiring females and given the severity of existing skills shortages, this simply cannot continue. While we were expecting to find low levels of employment, some of the figures were certainly below our initial perceptions, which makes the need for greater collaboration through initiatives such as the #GirlsAllowed campaign more vital now than they have ever been.

“While it’s great to see so many respondents commit to taking more action, there were some concerning views that came to light that I feel need to be altered immediately. Aside from some of the gender stereotyping comments, other remarks suggested that some in the industry itself don’t think construction is a sector that women should be in. This is quite simply untrue and is an attitude myself and the team at One Way certainly want to turn around.”

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Solar PV plant to be built in Chernobyl Exclusion Zone

Two Chinese firms have announced that they intend to rejuvenate Chernobyl’s exclusion zone by building a solar PV plant within its confines.

GCL System Integration Technology Co., Ltd. (GCL-SI) , a subsidiary of the world’s leading energy group GCL, will cooperate with China National Complete Engineering Corporation (CCEC) in delivering the Chernobyl PV plant project thirty years after the Chernobyl accident.

On 26th April 1986, during a safety check, reactor 4 of the Chernobyl power plant experienced a meltdown that could not be contained. As a result, it is estimated that more than 100,000 people have died as either a direct result of fallout or from subsequent radiation-related illnesses. It is also estimated that over £111.7 billion worth of damage was caused by the disaster. These astounding figures prove that regardless of who is considered responsible for the accident, cleaning up Chernobyl is of worldwide concern. If another reactor had blown during the meltdown, Chernobyl could have rendered the whole of Europe uninhabitable.

During the meltdown, vast quantities of radiation were released into the surrounding atmosphere, contaminating approximately 30 km2 of land with fallout. However, the Ukrainian government now aims to give a new renewable life to the exclusion zone. In October, the country’s Ministry of Environment and Natural Resources claimed the plan to build a PV plant at Chernobyl. “Its cheap land and abundant sunlight constitute a solid foundation for the project. In addition, the remaining electric transmission facilities are ready for reuse,” said Ostap Semerak, Ukraine’s minister of environment and natural resources.

Two Chinese companies will play significant parts in Chernobyl’s revival. CCEC are the general contractor and will manage the overall project. GCL-SI will offer consultancy and planning service as well as PV facilities to the project. According to GCL-SI, construction of the over 1 GW PV plant is expected to initiate in 2017. Once completed, Chernobyl will once again catch the global attention; this time as a revived site of solar energy.

“There will be remarkable social benefits and economical ones as we try to renovate the once damaged area with green and renewable energy. We are glad that we are making joint efforts with Ukraine to rebuild the community for the local people,” said Mr. Shu Hua, Chairman of GCL-SI.

Regarding GCL-SI’s overseas strategy, Mr. Shu further commented: “We have been dedicated to providing integrated solar services and will take diverse approaches this year to drive penetration and achieve global presence. The Chernobyl project is also one of our key steps to approach abroad.”

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Small UK construction firms waiting nearly two months for repayment from property giants

The UK’s 20 largest property developers now take 56 days on average to pay sub-contractors, up from 54 days last year, resulting in severe cash flow problems for smaller construction companies, says Funding Options, the UK’s leading online alternative business finance matchmaker.

Construction sub-contractors are facing growing cash flow problems — average time taken by the 20 largest UK construction firms to pay their suppliers.

graph_construction_subcontractors_facing_cash_flow_problems.771a84ffee87

Funding Options says that the failure of major developers to pay invoices in good time is damaging their sub-contractors’ growth prospects and in some cases threatening their viability. Without swift payment of their invoices, small companies such as bricklayers and carpenters cannot budget effectively and face severe funding issues.

These problems are being exacerbated by a slowdown in the construction industry since the second quarter of 2015.

The delays are jeopardising the ability of smaller construction companies to pay wages on time and bid for future work. The claim that big developers are sitting on the money owed to contractors is supported by the fact that large developers are paid by their own customers in 39 days. This is more than two weeks faster than they pay sub-contractors.

The study by Funding Options shows payment delays have been increasing since 2014, when it was taking developers 48 days to pay their suppliers such as electricians and plumbers.

It adds that with the Government setting a challenging target of one million new homes to be completed by 2020, it is more important than ever that payment delays in the construction sector are tackled as soon as possible.

Conrad Ford, CEO of Funding Options, says: “Smaller sub-contractors face the risk of bankruptcy if they are not paid within a reasonable amount of time.”

“Increasing numbers of small construction firms need help to cover those gaps in their cash flow.

“Major developers feel they have a lot to gain from delaying payments, knowing that their sub-contractors would be hesitant to raise their issues for fear of losing out on future work. There seems to be only two choices for the suppliers: accept these slow payments or lose the business going forward.

“These kinds of problems also won’t help the Government in hitting the very demanding targets it has set for new home completions.

Funding Options says that, technically, businesses are permitted to charge interest and other additional costs if their payment agreements are breached. However, smaller businesses rarely impose these charges as they need to avoid upsetting the companies they rely on for future business.

Conrad Ford says: “There are a few ways to allow firms to cover the gaps in their balance sheets. One of these options is bridging loans, which help them to accept new contracts, and be forward looking instead of dwelling on work they’ve already done.

“Funding Options puts smaller companies like sub-contractors in touch with suitable lenders, allowing them to plan ahead confidently and getting rid of doubts about whether they’ll have the costs to carry work out.”

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Millions in UK at higher risk of illness due to damp in homes

  • Respiratory illnesses cost European Governments 82 billion Euros per year according to new German research
  • Velux Group calls for healthier homes across UK and Europe

84 million Europeans live in homes that are too damp, causing respiratory illnesses such as asthma and COPD (chronic obstructive pulmonary disease), according to new research from the German institute Fraunhofer IBP.

European governments’ expenditures on asthma and COPD in terms of hospitalisation, loss of productivity and medical treatment amounts to 82 billion Euros each year, according to the research.

In light of the findings, the VELUX Group is calling for healthier homes to be a central consideration for the new European framework for national building legislations, which will affect UK house builders once implemented.

The research from FraunhoferIBP, reveals the socio-economic costs of asthma and COPD, which are proven effects also of living in damp and unhealthy buildings. The costs are 82 billion Euros annually, covering European governments’ direct expenses on medical treatment and additional care for patients in- and outside of hospitals, as well as indirect costs due to loss of productivity.

The study also reveals that close to 84 million Europeans live in damp or mouldy dwellings, which increases their risk of having respiratory diseases and life-long allergies by 40%. This proves the number of people living in unhealthy buildings remains an issue, despite recent awareness of the correlation between indoor environment and human health.

“We are convinced that the development of respiratory illnesses as a result of damp buildings can be reduced, and it is now clearer than ever that the legal framework for buildings needs to support healthy indoor climates in new and existing buildings. This way, human lives could be improved, and it is also good for the economy too,” says Grant Sneddon, Product Manager, VELUX® GBI.

Sneddon points to the upcoming revision of Energy Performance of Buildings Directives, EPBD, under the Energy Union, where the framework for national building legislations will be set.

“It is a big concern to see that very many people spend their everyday lives in damp and unhealthy homes. What is more, the new research reveals for the first time that 2.2 million citizens have asthma directly because they live in unhealthy buildings,” says Prof. Dr. Gunnar Grün, head of department for energy efficiency and indoor climate at Fraunhofer IBP.

Fraunhofer’s research, based on a cross-sectional study, questionnaires and in-depth case studies across 32 European countries, estimates that the number of Europeans living in damp and unhealthy dwellings could be reduced by 50% by 2050, which could reduce the number of people with associated respiratory diseases by 25%. In the case of asthma, this could lead to a reduction of 550,000 people.

How to prevent dampness in homes

According to the Fraunhofer institute dampness is one of the main defects in buildings across Europe, primarily caused by inadequate building structures and home owners’ lack of attention to ventilate sufficiently. As a consequence, mould is likely to grow, however the risk of this can be reduced significantly by choosing the right building fabrics during renovations.

In April 2016 the VELUX Group completed the RenovActive project in Belgium, a home renovation based on Active House principles focusing on the building’s architectural quality, human health, comfort and well-being, energy efficiency, and environmental benefits.

A key element in the modernization is the prevention of indoor dampness and mould, which is ensured by a natural and continuous airflow in the house. Read more about RenovActive by clicking here.

The Fraunhofer IBP white paper, ‘Towards an identification of European indoor environments’ impact on health and performance,’ is now available here.
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LEDs attract fewer disease carrying insects than other lights

New research by scientists from the University of Bristol has revealed that domestic LED lights are much less attractive to nuisance insects such as biting midges than traditional filament lamps.

The team now highlights the urgent need for further research on other heat-seeking flies that transmit disease, including mosquitoes that are carriers of pathogens that cause damaging diseases such as malaria and Zika fever.

The study, funded by the Natural Environment Research Council and UK lighting manufacturer Integral LED, used customised traps at 18 field test sites across south-west England, illuminated by a series of LED, filament and fluorescent light sources. Over 4,000 insects were carefully identified.

The results showed that LEDs attracted four times fewer insects compared with the traditional incandescent lamps, and half as many as were attracted to a compact fluorescent lamp.

Notably, for biting flies (midges in the genus Culicoides, some species of which are vectors of wildlife disease), 80 percent were attracted to the filament lamp, 15 percent to the compact fluorescent and only 2-3 percent to each of the two different LED lamps.

Dr Andy Wakefield led the field research in a project supervised by Professors Gareth Jones and Stephen Harris from the University’s School of Biological Sciences.

Dr Wakefield said “we were surprised by the number of biting flies drawn to the traditional tungsten lights. We do not know why this is but we know that some insects use thermal cues to find warm-blooded hosts in the night, so perhaps they were attracted to the heat given off by the filament bulb.”

Co-sponsors of the study, Integral LED were instrumental in the commissioning of the project and provided technical and financial support.

The UK company’s Marketing Director Sanjiv Kotecha said “As lighting manufacturers, we welcome that a link between LED lights and low attraction to insects has been proven. The energy saving advantages of solid-state lighting are well known, yet the benefits to well-being are only beginning to be revealed.”

Watch the video below:

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Only 15% think HS2 is worth the money

Following the news that the first major works contracts for High Speed 2 worth around £900m have been awarded to three consortia*, a survey conducted by the ITV Tonight programme into issues surrounding HS2 has found:

  • Only 15% feel that HS2 is worth £56bn
  • 58% don’t think it’s a price worth paying
  • 77% of people would prefer that the money was spent in other areas, like the NHS
  • Nearly three-quarters of people thought HS2 would lead to price rises for train tickets
  • 60% said they would not pay more to ride on HS2
  • 7% would be prepared to pay increased prices for the high speed line
  • 80% said they felt sympathy for people who may lose their homes to HS2, even though they may be compensated
  • 11% people thought the high speed rail link would benefit the majority of commuters
  • 23% are not aware that HS2 is being planned

Additionally, less than 20% of respondents thought they would use HS2 when built, and only a third of people feeling that HS2 will benefit the north.

Joe Rukin, Stop HS2 Campaign Manager responded “After six and a half years of trying to con people into thinking HS2 is a good idea, public support for this white elephant is at an all-time low. It’s clear the spin from Government isn’t working as not only do only 15% think it’ll be worth the money, they’ve also seen through the spin, with the vast majority thinking it won’t benefit commuters, it won’t benefit the north and it will lead to an increase in the cost of train tickets. Quite simply, no-one is buying the hype and it is time to cancel HS2 before it is too late.”

Penny Gaines, chair of Stop HS2 added “We have yet another survey that shows the British people don’t think HS2 is worth the £56 billion pound price tag. This is the same message as from numerous other surveys. People can see the downsides, they won’t use HS2 and they are worried that HS2 will mean increased fare prices on the trains they do use. With the Government’s intention that whoever gets the West Coast Main Line franchise will also run HS2 for the first few years, it is even more likely that conventional speed fares will go up.”

*North: LM JV (Laing O’Rourke Construction, J Murphy & Sons)
South: CS JV (Costain, Skanska Construction UK )
Central: Fusion JV (Morgan Sindall, BAM Nuttall, Ferrovial Agroman (UK)

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Government plans to upgrade energy infrastructure and increase investment in clean energy

The Government last week reaffirmed its commitment to spend £730m of annual support on renewable electricity projects over this parliament, and set out further details for the next Contracts for Difference auction where companies will compete for the first £290m worth of contracts for renewable electricity projects.

The second Contracts for Difference auction will result in enough renewable electricity to power around one million homes and reduce carbon emissions by around 2.5 million tonnes per year from 2021/22 onwards. It will also allow developers of innovative renewable technologies to deliver the best deal for bill payers. For example, the maximum price for offshore wind projects is now 25% lower than was set for the last auction, and a competitive auction could bring that price down further.

The Government has also today set out proposals for the next steps to phase out electricity generation from unabated coal-fired power stations within the next decade. This long-term plan will provide confidence to investors that the UK is open to investors in new, cleaner energy capacity as we transition from coal to gas, and build a diverse energy system giving us greater security of supply, which includes record investments in renewable technology and the reliable electricity that new nuclear power investment will provide.

This will be of some comfort to the environmentally conscious, who fear that the recent election of Donald Trump to the position of President will undermine real progress in green technology globally. Trump has already dismissed global warming and there will be no encouragement of reducing carbon emissions under his administration.

Business and Energy Secretary Greg Clark said “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.

“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

These are essential elements of the Government’s plan to upgrade the UK’s energy infrastructure, lower our carbon emissions and spur on the growth of large scale, low-carbon energy – a key part of the global deal to tackle climate change agreed in Paris last year.

Taking unabated coal power out of our energy mix and replacing it with cleaner technology, such as gas, will significantly reduce emissions from the UK’s energy use. The government first announced its intention to take unabated coal out of the energy mix in November last year.

The Government is also looking to end uncertainty over whether onshore wind projects on remote islands should be treated differently from onshore wind projects on mainland Great Britain. A consultation is being launched asking for views which either support or oppose this position which will be reviewed to provide a comprehensive answer.

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Gender pay gap at 16.3% for construction sector

The Minister for Women and Equalities, Justine Greening has welcomed figures showing the gender pay gap for the construction industry is now the lowest on record.

The Annual Survey of Hours and Earnings, published by the Office for National Statistics, provides the most accurate data on the median average difference between men and women’s earnings. These statistics show that the construction sector has a gender pay gap of 16.3% – that’s 1.8% below the national average.

From next April the government will be taking action to tackle the gender pay gap by requiring all employers with more than 250 employees to publish their gender pay and gender bonus gaps. This will help shine a light on the barriers preventing women from reaching the top.

The benefits of helping women to unlock their talents are huge – tackling the UK gender gap could add £150bn to our annual GDP in 2025. That’s an opportunity that neither government nor businesses can afford to ignore.

Ms Greening commented: “It is fantastic to see we now have the lowest gender pay gap on record. No woman should be held back just because of her gender.

“The changes we’ve made so that men and women can share their parental leave, the support we’re giving to get more women into the top jobs at our biggest companies and our drive to get more girls taking STEM subjects at school are all helping to reduce this gap.

“We’ve achieved amazing things but there’s more to do – that’s why we are pushing ahead with plans to require businesses to publish their gender pay and gender bonus gap for the first time ever from April next year.”

To help drive further progress and help eliminate the gender pay gap in a generation, the government is:

  • Introducing requirements for all employers with more than 250 members of staff to publish their gender pay and gender bonus pay gaps for the first time ever from April next year
  • Working with business to have 33% of women on boards by 2020 and eliminate all-male boards in the FTSE 350
  • Doubling the amount of free childcare available to working parents of three and four year olds, helping to remove the barriers that can prevent women from returning to the workplace.

This builds on the changes the government has already introduced to support women in the workplace, including:

  • Extending the right to request flexible working to all employees
  • Introducing a new system of flexible parental leave
  • Supporting women’s enterprise by helping female entrepreneurs start up and grow their own business
  • Increasing the National Living Wage, of which two-thirds of recipients are women.
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