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.

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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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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