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.

Skills, not Brexit, the main threat to construction industry

Worsening skills shortages, rather than uncertainty over Brexit, are the main threat to the UK construction industry, according to leading recruitment company for the construction industry.

A number of commentators have suggested that the main threat to the industry is the knock on effects of Britain’s decision to leave the European Union. However, an analysis by the construction and rail recruitment specialist found that a lack of skills poses the biggest potential risk to future productivity.

Paul Payne, managing director of One Way, comments “While numerous people have suggested that Brexit presents challenges to the construction industry, the idea is actually a bit of a red herring and we’ve seen little change since the result except for some natural hesitation brought on by the ‘Armageddon scenarios’ being pumped into the market. We’re as busy now as we were before the referendum and the real issue – the crippling lack of skilled professionals in this country – is being overlooked because of all the noise around Brexit.

“Yes, the construction industry has benefited from being part of the EU as it has given the sector access to a lot of workers who have moved over and have filled lower skilled roles, however we’ve never seen any great influx of skilled professionals who can work as design managers or quantity surveyors, for example. These people are needed across the entire industry and in related fields like civil engineering and currently there are far, far too few of them. More robust and well prepared hiring firms like ourselves will always have the resources to be able to pluck individual experts from the EU regardless of changes to freedom of movement laws, but in reality there is no quick fix. The only solution is to focus on ‘growing our own’, for example, through targeting more apprentices and youngsters at school level as well as widening the scope of people who are potentially interested in working in the industry to include more women and professionals from diverse backgrounds. Even at the moment when there are a number of major projects being put on hold there simply aren’t enough people in the market to meet demand. Imagine what the situation will be like when the economy picks up and they’re given the green light. Ultimately, something needs to happen quickly as we’re rapidly approaching a breaking point where productivity will be affected.”

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Plans unveiled for UK’s largest sustainable urban drainage network

An ambitious new project designed to dramatically cut the amount of clean rainwater becoming contaminated in London’s sewers is set to be launched this summer across the Nine Elms on the South Bank regeneration area.

Rainwater landing on an area the size of 20 football pitches will be channelled back into the Thames to stop it entering the capital’s overstretched sewers where it would mix with raw sewage.

This will reduce flood risks and save the huge amount of energy and cost involved in treating rainwater after it combines with waste from sinks, toilets and washing machines.

The £14m project will be the biggest sustainable urban drainage system (SUDS) in the UK and has been developed through an innovative partnership between Thames Water and the Nine Elms Vauxhall Partnership, which includes Wandsworth Council, Lambeth Council, the GLA and local developers including Ballymore.

New developments in Nine Elms have pioneered design features in new buildings and landscaping that capture rainwater, and increase evaporation before directing flows to a surface water network.

The rainwater will then drain into large underground pipes buried beneath the new Nine Elms Park, which will be a new green channel through the area from Vauxhall to Battersea Power Station.

After heavy rainfall the water will be gradually pumped from this underground reservoir into the Thames via an upgraded pumping station in Ponton Road.

Thames Water sustainability director Richard Aylard said: “By keeping the rain out of our combined sewers we are reducing the risk of flooding, pollution and pressure on our sewers, this will become especially important in the long term as London’s population continues to grow rapidly and the climate changes. It is about putting surface water back where it belongs – in the river. Development and regeneration across London is a major opportunity to do something different with surface water – to take it out of sewers, create additional capacity for new homes and businesses and allow areas like Nine Elms on the South Bank to thrive. Initiatives like this will also help to prolong the life of the Thames Tideway Tunnel.”

Leader of Wandsworth Council and co-chair of the Nine Elms Vauxhall Partnership, Ravi Govindia, said: “This is the city’s most ambitious sustainable drainage network and a real step forward for London’s green infrastructure. The project is another major achievement for our regeneration partnership as it transforms this old industrial part of the South Bank into a modern city centre business hub and cultural quarter.

“In Nine Elms we are creating up to 4,000 affordable homes, two new Tube stations and 25,000 new jobs. In the months ahead we will see the opening of the new US Embassy, a new Riverbus pier and the launch of the new ‘village hall’, shops, restaurants, bars and public spaces on the Battersea Power Station site. There is much to look forward to.”

Tristan Stout, Senior Development Manager at Ballymore, which has been heavily involved in developing the project, said: “We have ensured that Embassy Gardens integrates effective water management throughout through green roofs and rainwater gardens in the new streets of Embassy Gardens and through the landscape design of Nine Elms Park. Collaboration with Thames Water has enabled these features to be integrated into a strategic surface water network, which does not just reduce the flow, but removes it entirely from the existing network. This collaborative approach is one we hope will be replicated throughout London to make the city more resilient to the future climate change challenges.”

The unique drainage network will interact with a variety of eco-friendly rainwater design features included in new developments across Nine Elms. These include green roofs, swales – ditches containing vegetation used to remove pollutants – and streets with rainwater gardens which allow water to evaporate into the atmosphere, irrigate plants and generally reduce the volume of rainwater flowing back into the river.

Other cabling for amenities to serve the area’s new businesses and homes will be laid above the new drainage system at the same time, reducing future disruption to the road network.

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New Minister for Construction

Following the creation of the new Department for Business, Energy and Industrial Strategy (BEIS) the full list of ministerial responsibilities within the department has now been confirmed and Jesse Norman, Hereford MP has been given government responsibility for construction and infrastructure.

Norman, who was elected as the MP for Hereford and South Herefordshire in May 2010, is one of several MPs brought into the new Department for Business, Energy and Industrial Strategy, led by business secretary Greg Clark.

His responsibilities include:

  • infrastructure/construction
  • rail supply chain
  • industrial policy (supporting the Minister for Climate Change and Industry)
  • professional services
  • technology
  • aerospace
  • energy policy (supporting the Minister for Energy and Intellectual Property)
  • nuclear
  • oil and gas, including shale gas

His role will also include ministerial responsibility for rail supply chains, technology, and assisting the energy minister Baroness Neville-Rolfe with nuclear policy.

On Twitter the MP said “very sad to be leaving @CommonsCMS, but honoured and delighted that I have been appointed as a Minister at the new DBEIS.”

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Hinkley Point C delayed – meanwhile renewable energy outperforms coal in new statistics

Controversial plans to construct a nuclear power plant in the UK have been delayed following the government postponing any final decision until early autumn. Meanwhile, new official UK electricity statistics indicate that renewable technology is currently outperforming coal in terms of energy generation.

Prior to today’s announcement that the project would be delayed, French firm EDF were financing the majority of the £18bn Hinkley Point C project in Somerset, and final contracts were due to be signed this week.

However, Business Secretary Greg Clark has now said that the government will have to “consider carefully” before backing the original plans.

The project has raised serious concern over both environmental impact and ever-rising costs, which make it a costly carbuncle rather than a real asset to Britain. There are also questions being raised about the fact that the plant is being built by foreign governments. For example, around 30% of the £18bn cost is currently being provided by Chinese investors.

Stop Hinkley Spokesperson Allan Jeffery commented “Now even the financial press says Hinkley Point C has become a laughing stock.

“The cost keeps rising while the cost of renewables is falling rapidly, and the potential to make savings with energy efficiency is huge. We could replace Hinkley much more quickly and cheaply without the safety fears and without producing dangerous waste we don’t know what to do with.”

Renewables

In other energy news, the Government’s new annual energy statistics show that renewable energy sources are replacing coal as mainstream technologies generating power for British homes, offices and factories.

Renewables-BS-article

Today’s figures confirm that 25% of the UK’s electricity was generated from renewables last year – an increase of 29% on 2014. Nearly half of this (48%) came from wind power alone. 1 in 8 units of electricity generated in the UK came from wind.

In comparison, coal generated 22% of the country’s electricity – down from 30% in 2014.

RenewableUK’s Deputy Chief Executive Maf Smith said “The Government took the right decision when it announced the phasing out of coal. Now we can see renewable energy filling the gap, replacing old technology with new. 2015 was the first year that renewables outperformed coal.

“A quarter of Britain’s power is now coming from wind, wave and tidal power and other renewable energy sources. Renewables are now part of our energy mainstream, helping us modernise the way we keep the lights on by building new infrastructure for the generations to come.”

The contribution of offshore wind grew by 30% in 2015, while onshore wind grew by 23%. The Department for Business, Energy and Industrial Strategy, which published the figures, said this was due to increases in capacity, load factors and higher wind speeds.

The Government’s latest poll on the public’s views on energy, the Public Attitudes Tracking Survey, was also published today. It showed that 76% of people support renewable energy. 70% of people also said renewable projects provide economic benefits to the UK.

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Construction workloads continue to grow slowly, post-referendum

The pace of increase in workloads in the construction market continues to slow, according to the latest RICS UK Construction Market Survey, extending a trend that goes back to the middle of last year.

This flatter picture is visible across all sectors; 17% more respondents reported a rise in activity over the previous three months compared with 28% in the first quarter, with the most pronounced slowdowns being seen in the private commercial, industrial and housing segments. That said, 27% more contributors still reported a rise in private housing activity – down from 36% in Q1 – while 17% more respondents saw their workloads in the private commercial sector rise rather than fall in Q2.

Significantly, for the second successive quarter, the biggest constraint on output according to respondents is finance with more than two-third of contributors highlighting this as the principal challenge. In breaking down the term financial constraints, 36% of respondents reported that a lack of funding was restricting new developments. Meanwhile, planning and regulatory delays also remain a key issue with 60% of respondents citing that these are constraining growth.

Despite the slowdown in activity in Q2, skills shortages remain a problem with 56% of contributors reporting that a lack of appropriately skilled labour was a constraint on growth. Bricklayers and quantity surveyors remain in particularly short supply with 59% and 57% of respondents citing difficulties in these areas.

The more uncertain prospects for the economy have led to a less optimistic outlook for the sector over the year ahead. Although, putting this in perspective, 23% more contributors still expect activity to rise rather than fall over this period. On average, contributors foresee their workloads increasing by 1% over the coming 12 months, down from the 2.8% growth predicted in Q1.
Expectations for employment growth have also moderated significantly with a rise of 0.6% anticipated, down from 2% the previous quarter.

Aside from in Scotland where activity flatlined relative to Q1, respondents in all other parts of the UK continue to report a rise in workloads.

Simon Rubinsohn, RICS Chief Economist, commented “The latest results from the RICS Construction Market Survey suggest that the second quarter of the year saw a further moderation in the growth trend which is not altogether surprising given the build-up to the EU referendum. Significantly, the biggest issue at the present time alongside uncertainty looks to be credit constraints with over two thirds of contributors highlighting this issue as a concern.

“Encouragingly, the swift actions of the Bank of England in creating additional capacity for the banking sector to provide funding to meet demand should help alleviate some of this pressure. Nevertheless, anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the EU could see some investment plans in the construction sector scaled back.”

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Green light for former prison redevelopment

(image courtesy of City & Country)

Plans to build new homes on the site of a former grade II-listed prison in Portsmouth have been given the go-ahead.

Portsmouth City Council has approved City & Country’s planning application to construct 230 new homes at the site of the former Kingston Prison.

The Ministry of Justice sold the prison in 2014 after it had closed in 2013.

The scheme will involve restoring the grade II-listed cell block and converting it into apartments. The proposals also include the retention of the listed walls and gatehouse, which will feature a small café.

Prior to the application being submitted to the city council, the local community was invited to a series of public consultation events, with over 5,000 residents and community representatives attending and providing feedback on the proposals.

Richard Winsborough, associate director (planning) at City & Country, said: “Restoring these buildings was of paramount importance to us when we purchased Kingston Prison and we are pleased that members at Portsmouth City Council recognised the need of delivering a new future for the redundant site.

As well as providing fantastic, characterful new homes, the development will open up the prison to the wider community and enable the enjoyment of these magnificent buildings for years to come.”

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Government must act now to prevent significant real estate downturn, says BPF

The British Property Federation (BPF) today called on government to consider a raft of policy measures to support real estate, following the publication of a RICS report showing a significant decline in confidence, activity and investor interest in UK commercial real estate.

The RICS UK Commercial Property Market Survey for Q2 2016 showed that investment demand for commercial real estate has fallen sharply and that, although some immediate turbulence was to be expected following the EU referendum, the sector may in fact face a far more significant downturn. The BPF urged government to monitor the situation closely and consider introducing a package of support for the real estate sector, including:

  • Accelerate its proposed reform of business rates to support activity in the broader business economy
  • Delay the introduction of plans to restrict the tax deductibility of corporate interest expense for a year until 2018, to ensure that the rules are implemented in a way that doesn’t deter investment
  • Introduce a range of tax reliefs for build to rent development, including CIL relief, relief for modular construction, and SDLT relief for new build to rent developments on the condition that they will be let on tenancies of three years or longer with rent increases tied to inflation
  • Maintain an absolute and continued commitment to devolution and public infrastructure investment in HS2, the East-West Rail Line, Crossrail 2, and an imperative decision on growing airport capacity.

Ian Fletcher, Director of Policy (Real Estate) at the BPF, said “This is not the time for knee-jerk reactions, but commercial property and a number of the government’s priorities are interdependent. Ministers must closely monitor developments in the commercial property market and be ready to act in weeks, not months, if evidence continues of a slowdown in investment.

“Commercial property investment is not always an obvious priority for governments because its social and economic impacts are indirect, but construction and development activity flow from it, ultimately impacting on jobs and economic growth. In scenarios like this the focus is often on construction, but you don’t get construction without an investment client, so it is essential that government monitors fluctuations in investment very closely.”

The full results of the RICS UK Commercial Property Market Survey can be found here.
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No sign of a Brexit impact on construction in June with £6.2 billion worth of contracts awarded

After an eventful final week of June with a series of shocks sent through the economy, the construction sector managed to hold strong, with new orders reaching £6.2 billion on the month, the highest figure of any month so far in 2016.

According to the June edition of the Economic & Construction Market Review from industry analysts Barbour ABI, the two stalwarts of the construction sector; residential & infrastructure, both had year on year rises in June, with contract values increasing by 26 per cent and 14 per cent respectively.

London regained the top spot for construction contract value by location back from Scotland after it held the position over the last two months, mainly due to a number of major renewable energy projects. London’s construction boost this month was helped greatly by the award to develop the Bechtel House Hammersmith valued at £275 million and the first phase of the £100 million Royal Albert Dock project. Both these major schemes help propel office construction to a total of £650 million worth of contracts awarded on the month, contributing to 81 per cent of all commercial and retail construction value.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “With the majority of the sector under the assumption that the UK would not vote to leave the European Union the result left many surprised, and our June figures are under the assumption that it would be ‘business as usual’.”

“We have seen housebuilder stocks fall in the wake of the vote and anecdotal evidence that projects are being cancelled. However, that is not evident in the data as of yet and it is a case of wait and see in terms of the impact Brexit may have.”

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Actively seeking designs for low-energy homes of the future

In construction, bringing a scientific approach to the design of a building that commits to an energy standard is not the easiest of things to achieve. When Passive House caught the imagination of those seeking answers to achieving an energy standard capable of dealing with today’s environmental problems, it seemed it would become the template for future buildings. However, the problem with science is there is always another answer and similar to politics, depending on how you define the question, the answer can lead elsewhere.

Active House, although not sitting directly opposite Passive House, is being proposed as a new option to the current issues. With the European target for all buildings to be near zero-energy by 2021, Active House design looks to achieve a neutral CO² balance without the rigorous Passive House standards that restrict many opportunities.

The principle behind the Active House approach is to consider both the passive and active components of a building, minimising the operational energy of a building as well as the emissions of each building and the embodied energy during construction whilst allowing architects more freedom.

Where passive design lays out ridged rules on heat demand regardless of size or function of a building thus creating a limit on design parameters, Active House states it takes a softer approach to heating requirements as part of the overall design which permits more flexibility to the architectural design of a building.

But which approach is right? Passive House has been around for 20 years-plus. It has a proven track record – although in a niche market in the UK – but many of its principles have become standard building practice such as air tightness, an awareness of thermal issues and solar-gain through fenestration.

The problem for architects lies in the limitations on a design that has to achieve a calculated heat demand which is the foundation stone of Passive House construction. I know from experience that trying to achieve a Passive House standard whilst working with an architect who is focused on design-first and an energy consultant who is constantly challenging his design, makes for uncomfortable construction.

Could Active House make life easier for architects and builders? Not an easy one to answer as with any type of construction the truth is in the detail and whilst passive may be difficult to build its issues and problems are known and we have answers to most of them. With Active House the idea requires a rethink on a new building energy standard that requires a balanced approach to each individual building and this could pose more than a few issues at the design stage.

So if you take the Active House design and for example a standard three-bedroom house that over a period of say 40 years will see several lifestyle changes and technological advances, how this will impact on the original design is very hard to say. But if you look back over the last 40 years the house we live in today is a different animal from the original design, and if we had designed it then based on a commitment to an Active House would it still stand the test of time?

One thing is for sure, there is no perfect answer to Europe’s drive towards reducing energy commitments and that will undoubtedly create long and protracted discussions across borders.

But without doubt delivering a one-type of design to suit all will be the hardest argument of all especially for builders.

By Martin Peat, Director, Richardson & Peat
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We must make tackling the skills shortage a priority, urges industry

Construction professionals have stressed how despite the fallout following Brexit, we must focus our efforts on combatting the looming skills crisis by prioritising the introduction of new initiatives to attract workers into the various sectors that span the construction industry.

Thinking ahead

Chris Wood, CEO of Develop Training Limited, the UK’s leading training specialist in the utilities sector, commented “The skills shortage in the UK is a catastrophe waiting to happen, one that literally threatens to turn out Britain’s lights. A solution to the twin problems of a chronic skills shortage in our utilities industry and high youth unemployment is obvious – train young people to take the places of the ageing workforce, but it just isn’t happening at anything like the rate that it needs to be. The new PM and her Cabinet must make it a government priority to look into ways to correct this issue as a matter of extreme urgency.

“As householders and businesses in the UK wonder about a post-Brexit future, they should remember that the utilities sector is still facing a potentially devastating skills shortage. The sector is constantly on a recruitment drive but is simply not receiving the response it requires.

“We all need confidence that our lights will stay on, our heating will continue to keep our houses warm and our taps keep providing running water, but the day is fast approaching when there will simply not be enough workers to do these vital jobs.”

Home-grown talent

Brian Berry of the Federation of Master Builders has also echoed concerns post-Brexit regarding the retention of skilled EU workers and the training of new talent. Berry said “We need to ensure that we invest in our own home-grown talent through apprenticeship training. We need to train more construction apprentices so we are not overly reliant on migrant workers from Europe or further afield. That’s why it’s so important that the Government gets the funding framework right for apprenticeships – when you consider that this whole policy area is currently in flux, and then you add Brexit into the mix, it’s no exaggeration to say that a few wrong moves by the Government could result in the skills crisis becoming a skills catastrophe. The next few years will bring unprecedented challenges to the construction and house building sector, and it’s only through close collaboration between the Government and industry that we’ll be able to overcome them.”

Diversity

Skanska, who recently won the Judges’ Supreme Award and Diversity Champion of the Year Award, have suggested that we need ensure the culture of our industry is both inviting and nurturing in order to alleviate the shortage long-term.

Mike Putnam, President and CEO Skanska UK, said “We believe that a diverse and inclusive culture is key to creating a successful and sustainable business. It will help us to create teams where people think differently, while making them better placed to understand the needs of the communities in which we work.

“It is through the way that our people embrace diversity and create an open and welcoming environment that we are able to work collaboratively – with our customers, joint venture and supply chain partners.”

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