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.

Number of suspended projects on the rise

The number of projects being put on hold by clients is on the rise. At present, it appears to be smaller value schemes that are currently being suspended, with the value of underlying projects being placed on hold down on a year ago.

Glenigan has identified a 28% increase in number of projects being placed on hold during the third quarter of this year against the same period last year. In contrast the value of projects being suspended (excluding schemes of £100m or more) was 10% lower.

Whilst the number of projects being placed on hold remained subdued in July in the immediate aftermath of the Brexit vote, it has risen during August and September.

Looking across the sectors, the rise in the number of private residential, office and hotel & leisure projects being placed on hold suggests that clients may be reviewing the viability of some planned schemes post-referendum.

Oct25_On_Hold September_2016

However, the Brexit vote is not the only factor at work. The utilities sector has seen by far the sharpest rise in the number and value of projects being placed on hold. Indeed that sector has seen a sharp rise in suspended projects since the start of 2016 and, the number of projects put on hold in the third quarter was 92% up on a year ago. The sharp rise in suspended projects appears to be in response to the Government’s cuts in the feed in tariff rates for renewable projects; almost half of the projects are renewable energy schemes whilst a third are waste treatment projects often involving energy recovery.

Elsewhere there has been an encouraging decline in the number of projects being placed on hold, with fewer retail and social housing projects being suspended during the third quarter. Overall the latest on-hold project data highlights that volatile market conditions facing the industry and the need for firms to be able to identify and respond to new opportunities as they emerge.

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100,000 modular homes planned to alleviate housing crisis

According to a government white paper which will be published next month, the Government intends to utilise offsite technologies and build around 100,000 modular homes across Britain by 2020.

The report includes measures that will make lending to offsite home builders more attractive to banks.

The rapid delivery of recent offsite projects (sometimes as quickly as 48 hours for some modular homes) has made the construction method a very interesting and viable option for ministers in tackling the shortage of housing in the UK and meet targets.

In an article in The Telegraph, a government spokesperson said “The first and most obvious advantage is speeding up the building of housing. There is pretty good evidence that if you did it at scale it is cheaper.”

The Communities Department hope the measures will lead to 100,000 off-site manufactured home being built over this parliament.

Housing minister, Gavin Barwell commented: “Offsite construction could provide a huge opportunity to increase housing supply and we want to see more innovation like this emulated across the housebuilding sector.”

The Government have initially identified two key areas where support must be given, the first of which is to provide direct funding to construction firms in order to help them deliver new prefabs. Secondly, they want to encourage lenders to make more money available by showing them that the technology is low risk and lucrative.

Whilst compiling their research, Housing Minister Gavin Barwell and communities secretary Sajid Javid visited West Midlands based housing association ‘Accord Group’, who have stated that they can create a three-bedroom house at their factory in just 24 hours. They also visited London firm ‘Pocket’, who specialise in building affordable flats for first-time buyers.

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Shrinking construction workforce may be a problem for Heathrow’s third runway

A new runway at Heathrow will put even more pressure on a declining construction workforce, a leading construction advisor has warned.

Mark Farmer, chief executive of Cast, a consultancy and the author of a government review into construction, has said that without radical steps to address its skills shortage, Britain’s construction sector will struggle to redevelop Heathrow alongside the existing pressures of increased housing delivery and other demands likely to be placed on it such as HS2 and Hinkley Point.

Best-case scenarios have put the third runway a decade away – by which time Britain could have lost 20 – 25% of the workforce through retirement and lack of new entrants. All of these factors are likely to be made worse by Brexit. Mark Farmer, who authored the government-backed review, believes serious reforms are needed in order to deliver large infrastructure projects.

The report, titled ‘Modernise or Die: time to decide the industry’s future’, highlights construction’s dysfunctional training model, its lack of innovation and collaboration as well as its non-existent research and development (R&D) culture. Low productivity continues to hamper the sector, while recent high levels of cost inflation, driven by a shortage of workers, has stalled numerous housing and infrastructure schemes as they have become too expensive to build.

With more people leaving the industry each year than joining, the construction workforce is shrinking, placing increasingly severe constraints on its capacity to build housing and infrastructure. Reliance on a fractured supply chain and self-employment also means there is little incentive for contractors to invest in long term training for the labour force.

Crucially, the sector hasn’t raised its productivity in decades so urgently needs to explore ways to make the work less labour intensive, such as through offsite construction. This, in turn, could make a career in the sector more attractive for young people by moving the work from building sites to digitally enabled working in factories.

Mark Farmer, report author and chief executive of Cast, said “Major infrastructure projects like the third runway are crucial for economic growth and this is great news for long term construction demand in what is a very cyclical industry. However, major government infrastructure commitments like this alongside their significant housebuilding ambitions mean more than ever that we need to take affirmative action in addressing the critical issues facing construction’s productivity, resource base and delivery models.”

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Will Theresa May encourage gender diversity in construction?

41% of young women aged 13–22 believe their gender will hold them back in the workplace; however, they claim that the rise of female leaders, such as Theresa May and Hilary Clinton, could help to change sexist attitudes and encourage workplace diversity, according to a new YouGov survey commissioned by the Royal Institution of Chartered Surveyors.

While almost half of young women believed that their gender would count against them in the workplace, young men seem to think differently, with 20% saying that they expect to earn more in their careers than their female counterparts.

But there may be hope on the horizon in the form of Theresa May and Nicola Sturgeon. 43% of young women believe that having a female Prime Minister or President will encourage gender diversity at work. Of those surveyed, 73% believe that the attitudes and behaviour of CEOs and senior leaders are important in encouraging equal numbers of men and women.

The property and construction industries were perceived by respondents to be among the least diverse with 29% of girls saying that the sector was purely for men. Among the industries perceived as most diverse are retail and health, with law and construction cited as the least.

Amanda Clack FRICS, RICS President said “Speaking as a woman in construction, I can say with confidence that this is not just a job for boys; however, the need for diversity at the very top is clear. When I first entered the profession there were no strong female role models. Yet, according to our survey, a quarter of young women believe they will do better under the leadership of a female CEO and they want to see visible female role models.

“Strong female roles models will help to attract greater diversity into the industry because the more we celebrate individual success, the more surmountable barriers become. With a female Prime Minister in the UK and a woman in the running for the US Presidency, we are seeing great female role models at the very highest levels.”

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London Mayor criticises decision to delay new runway construction

‎Mayor of London, Sadiq Khan has criticised ministers for delaying the final decision of where to build a new runway in the South-East for up to a year.

The Mayor accused the Government of ‘causing unnecessary uncertainty for British businesses already struggling with Brexit.’

His comments came after Downing Street postponed a final decision on expanding Heathrow or Gatwick until late 2017.

The decision means Article 50 – the formal move triggering Britain’s exit from the European Union – is set to be taken before any final decision on airport capacity in the South East.

Khan said “The Government’s decision to yet again delay deciding where to build a new runway will cause unnecessary uncertainty for British businesses already struggling with Brexit.

“Now more than ever, businesses need certainty and stability in order to make investment decisions and to keep jobs in Britain. Instead they are getting dither and delay.

“Now it’s time to get on with building a new runway at Gatwick, which can be built quicker, cheaper, and without the years of legal and political battles that Heathrow clearly faces.”

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Construction workloads still rising despite uncertainty

Building activity is still rising despite uncertainty in the economy, according to the latest RICS (Royal Institution of Chartered Surveyors) and Tughans Northern Ireland Construction Market Survey.

Workloads were still rising in the third quarter of the year, according to Northern Ireland surveyors, with only a very modest slowdown in activity relative to Q2.

Housebuilding remained a key source of workload growth, with private housebuilding activity rising particularly strongly (a net balance of +48). Private Commercial activity was also rising relatively robustly (+23), according to the survey.

In contrast however, infrastructure workload growth remained weak (+5), and significantly below the UK average (+17).

Looking ahead, Northern Ireland surveyors are upbeat about the prospects for growth, with a net balance of +50% expecting workloads to be higher in a 12-month horizon.

The picture painted by the Q3 survey is one of growth, and expectations have improved following the immediate shock of the vote to leave the EU. However, Northern Ireland’s construction sector remains heavily dependent on work in GB, and the survey tells us, crucially, that infrastructure activity remains very subdued. There is also anecdotal evidence from respondents suggesting that uncertainty still remains on the outlook for the year ahead.

RICS Construction Spokesman for Northern Ireland, Jim Sammon said “Infrastructure investment from both the private and public sectors, is essential to delivering long term growth, particularly as we seek to continue to attract Foreign Direct Investment.

The latest survey chimes with much of the other data of late, which has pointed to a stronger economy than perhaps had been anticipated. Activity inside Northern Ireland itself may remain subdued, other than an uptick in residential development, but the local sector continues to find work outside of Northern Ireland, demonstrating the quality of the work our local professionals deliver. Clearly some uncertainty lies ahead, but on the positive side, the weakening of sterling could help increase the competitiveness of Northern Ireland companies working south of the border.” concluded Michael McCord, Construction Partner, Tughans Solicitors.

Read the full survey results here.
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Theresa May’s industrial strategy “must address Brexit skills impact”

When Theresa May became Prime Minister, she announced that the UK government would develop an ‘industrial strategy’ to deliver a modern, innovative and competitive economy. Leading international infrastructure group Balfour Beatty are warning the government that projects such as HS2 run the risk of losing valued foreign workers post-Brexit unless tackling the skills shortage is made high priority within the strategy.

In Balfour Beatty’s latest publication entitled “Industrial Strategy: A Vision for Growth,” they highlighted that that around 2.2 million EU nationals working within the UK have helped make up a skilled workforce that the UK would be unable to source alone, should the free movement of labour be compromised.

The paper suggests that the heightened uncertainty surrounding EU labour in a post-referendum Britain risks causing severe recruitment and staffing difficulties. This in turn could lead to increased costs where demand for labour outstrips supply, resulting in long delays – especially on big projects such as HS2 and Hinkley Point.

The report says “An early and integrated policy response to both retain the skills of those who have migrated here and to ensure that the UK remains an attractive place for talented people to reside should be a key element of Government’s industrial strategy.”

Homegrown talent

Balfour Beatty has also stressed the importance of attracting and retaining new talent from inside the UK if we are to successfully thrive in a UK outside of the EU.

“The Government’s industrial strategy should also seek to address the skills shortage in the UK directly, by continuing to support the upskilling of our own workforce. If we want a successful industrial strategy then we must invest in the people who will deliver it, so skills, the investment in human capital, must be a priority in the industrial strategy. In this vein, we welcome Government’s plans to increase the number of apprentices by 3 million and introduce the Apprenticeship Levy.”

“However, we do not believe that the apprenticeship levy alone will be enough to meet the shortfall in skilled workers the infrastructure industry needs. To effectively resolve these skilling issues, we believe it’s necessary that for a collegiate approach to agree a clearly defined programme, designed through close interaction and genuine dialogue between government, industry and representative bodies, such as the Construction Leadership Council. Most importantly, the strategy should be adhered to over the long-term as we see in other countries such as Germany.”

Read the full report here.
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“Modernise or die”, warns Government-commissioned review

Britain’s construction industry faces “inexorable decline” unless radical steps are taken to address its longstanding problems, according to an independent review commissioned by two Government departments.

The Farmer Review of the UK Construction Labour Model highlights construction’s dysfunctional training model, its lack of innovation and collaboration as well as it’s non-existent research and development (R&D) culture. Low productivity continues to hamper the sector, while recent high levels of cost inflation, driven by a shortage of workers, has stalled numerous housing schemes as they have become too expensive to build.

Led by Mark Farmer, chief executive of Cast, a real estate and construction consultancy, the hard-hitting report says we need to better align the needs of construction firms and the businesses who hire them.

“If you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality” said Farmer. “This needs to happen more in construction, so that the investors, developers or building owners hiring construction firms increasingly dictate the use of modern methods of delivery and invest appropriately in the skills agenda to grow this part of the industry. There are more similarities between manufacturing and construction than many people are led to believe and this perception needs to change, starting in the housing market.”

One recommendation set out for the medium term is a “carrier bag charge” style behavioural deterrent scheme. This would levy a tax on businesses who buy construction work in a way that doesn’t support industry innovation or skills development. Clients could face paying a suggested levy equal to 0.5 percent of a scheme’s construction cost but would have the ability to avoid paying this tax completely by commissioning construction in a more responsible way.

Farmer, a 25-year veteran of the industry, and former partner at EC Harris, said the industry needs to be far more joined-up with its clients in how it approaches R&D and skills. He also wants ministers to directly intervene in certain areas to ensure many of the issues identified are rectified.

Commissioned by the Department for Communities and Local Government and Department for Business, Energy and Industrial Strategy, Farmer has made 10 recommendations which include:

  • Using the residential development sector as a pilot programme to drive forward the large scale use of pre-manufactured construction, for example, through off-site built or modular housing.
  • A wholesale reform of the current Construction Industry Training Board (CITB) and its related levy system, including a new mandate to properly fund and drive forward both appropriate skills development and innovation to suit a modern progressive industry.
  • Government to use its education, fiscal, housing and planning policy measures to initiate change and create the right conditions that will support the construction sector’s modernisation.

With more people leaving the industry each year than joining, the construction workforce is shrinking, placing increasingly severe constraints on its capacity to build housing and infrastructure. Reliance on a fractured supply chain and self-employment also means there is little incentive for contractors to invest in long term training for the labour force.

The situation is exacerbated by the fact that many school leavers and graduates don’t view construction as an attractive career choice. A YouGov poll earlier this year found that two-thirds of Britons wouldn’t consider a career in construction. If Brexit results in reduced migrant labour, the situation could be made even worse.

Crucially, it hasn’t raised its productivity in decades so urgently needs to explore ways to make the work less labour intensive, such as through offsite construction. This, in turn, could make a career in the sector more attractive for young people by moving the work from building sites to digitally enabled working in factories.

Industry Minister Jesse Norman commented “This Government is determined to support more housebuilding, more quickly and in the places people want to live. Given the launch of the £3 billion Home Building Fund, Mark Farmer’s important review in this vital sector is very timely. It makes a strong case for change in the industry, identifies areas where it needs to improve, and sets out areas for action. We will now carefully consider his recommendations.”

Paul Stanworth, Managing Director of Legal & General Capital added “This review sets out a clear way for the construction sector to reinvent itself in order to meet the ever-growing demand for homes and infrastructure. With such a chronic shortage of homes in the UK, we see rapid evolution as a “must have” for the industry, not just a “nice to have”. Having identified such a requirement, Legal & General is helping to address this problem by investing in a modern factory to produce homes using manufacturing processes seen in the production of cars and other consumer goods. This construction method is safe, clean, and fast, providing a high level of consistency and durability. We sincerely hope that Farmer’s review galvanises the entire sector to invest in innovation and secure its future.”

Download the full report here.
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Birmingham’s New Street Station crowned UK’s Project of the Year after £1bn revamp

Following a major £1bn redevelopment, Birmingham’s New Street Station has been crowned UK Project of the Year at the 2016 RICS Awards Grand Final.

The national RICS Project of the Year accolade is presented to the scheme which demonstrates outstanding best practice and significant benefit to their local area and wider economy. The redevelopment of Birmingham’s New Street station and Grand Central triumphed over 90 of the UK’s most impressive property schemes to gain the top award.

The Birmingham Gateway & Grand Central project – delivered by a team including Mace, Network Rail, Birmingham City Council and Turner & Townsend – was described by our judging panel as the most significant investment in regenerating Birmingham in a generation.

The new Birmingham’s New Street station and its former Pallasades shopping centre opened as Birmingham Grand Central in September last year. The £1bn scheme has transformed it into a popular retail and leisure destination and world-class station – five times the size of the original station – with a striking soccer pitch-sized atrium. Meanwhile, the new shopping centre – above the station – is now home to the biggest John Lewis outside of London and a mix of premium high street brands and eateries.

As one of Britain’s largest and most important cities, Birmingham deserves a station and shopping and leisure destination of this remarkable calibre. This investment in the city has created around 10,000 jobs and is expected to deliver around £2bn in economic benefits.

David Tuffin FRICS of Tuffin Ferraby Taylor LLP said “It is the catalyst for further regeneration in other parts of the city centre, which will create even more jobs. The team behind Birmingham Gateway and Grand Central should be extremely proud. 180,000 passengers continued to use the station during the works, yet they still managed to create a visually striking, yet practical international gateway into Birmingham, on time, from which the city, its residents and visitors will prosper from enormously.

“Each of these schemes is of an exceptional calibre. I’d like to extend a huge well done to the teams behind them as these projects are all positively contributing to their local communities and our country’s economy.”

Category winners from each of the 12 regional RICS Award ceremonies – held earlier this year – competed to win the national accolade in their respective category, with host, Gethin Jones, Broadcaster and TV personality announcing the winners.

The Grand Final winners:

  • Building Conservation: Mount Stewart, Newtownard (Northern Ireland)
  • Commercial: Landrover BAR America’s Cup HQ, Portsmouth (South East)
  • Community Benefit: Alder Hey Children’s Hospital, Liverpool (North West)
  • Design through Innovation: Black Rock Quarry, Portishead (South West)
  • Infrastructure: Emergency Care Centre, Queen Elizabeth Hospital, Gateshead (North East)
  • Regeneration: Birmingham Gateway & Grand Central, Birmingham (West Midlands)
  • Residental: Romilly Quarter, Barry (Wales)
  • Tourism & Leisure: NT Future, South Bank (London)
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Radical concept for temporary floating Parliament unveiled

A new temporary Houses of Parliament located on the River Thames provides a solution for the long overdue refurbishment of the historic Palace of Westminster.

International architecture, design and planning firm Gensler has unveiled a radical concept that could reduce the cost and minimise the disruption of the comprehensive refurbishment of the Palace of Westminster.

The proposed modular structure located on the River Thames could provide a flexible and secure home that helps save the British taxpayer more than £1.8 billion, based on the House Committee’s own estimates, and allows the urgent repair works to proceed.

Gensler’s design accommodates all the principle components of the current Houses of Parliament within a new structure located alongside the existing Member’s terrace. The design maintains the relationship between both Chambers and their supporting Committee Rooms. The scheme includes a dedicated new entrance from the south side of the Palace of Westminster, adjacent to Victoria Tower Gardens, with an option to enable direct access to the existing Central Lobby if required.

An essential element of the refurbishment proposals for the House of Parliament requires total decantation of the building for an estimated six years. The challenge has been to find a suitable location within Whitehall that can accommodate Parliament in an efficient and cost effective manner. This concept offers a unique opportunity to co-locate the House of Commons and the House of Lords together with all their supporting committee rooms in a purpose built structure at the centre of the Whitehall estate.

By using the River Thames, Gensler’s design creates a completely new temporary Parliament under one roof in the same world famous location in the heart of Westminster avoiding the dispersion of core parliamentary activity to multiple locations. The concept overcomes some of the initial concerns about a river location by ensuring the structure does not interrupt the navigable channel along the centre of the river. It also incorporates a number of security measures that supplement the natural defence provided by the river itself.

The design takes inspiration from the magnificent hammer-beam roof of Westminster Hall, which was commissioned by Richard II in 1393 and is the largest medieval timber roof in Northern Europe. The 250-metre-long structure would be built on a series of steel platforms and the building above would be a dramatic, high-tech, wooden-framed structure covering 8,600 square metres, which would provide all the necessary environmental and acoustic containment. The new modular structure could be built in less than three years in shipyards across the UK and floated along the Thames to be secured and assembled on the river some 10 metres from the Palace of Westminster.

Ian Mulcahey, Managing Director at Gensler, said “The concept provides a simple solution to what is a very complex problem. The challenge has been to find a location that enables all the key components of Parliament to be located together in close proximity to the wider Government estate in Whitehall. The objective has been to minimise disruption and reduce the cost of the refurbishment to the taxpayer. The Palace of Westminster is one of the most important symbols of democracy in the world. This scheme provides a powerful expression of continuity and reinforces the UK’s world-leading creative expertise.”

Duncan Swinhoe, Regional Managing Principal at Gensler, said “This not only provides a fitting short-term solution to the relocation issue it also provides some exciting long-term opportunities. Once the refurbishment of the Palace is complete, the modular structure could be relocated and adapted to provide a permanent legacy such as a Museum for Democracy or alternatively a new parliament for an emerging overseas democracy.”

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