£4.16m loan to fund Lake District development

The project — which comprises a mix of two- to five-bedroom houses and bungalows, situated in the Cumbrian village of Hackthorpe — is being delivered by regional housebuilder, Genesis Homes, in a joint venture with Housing Growth Partnership (HGP).

Genesis Homes approached UTB’s director of property development, Huw Jenkins, for the loan when its original lender withdrew an offer of funding at the onset of the Covid-19 pandemic.

The bank stepped in at short notice to finance the £6.7m development at 62% LTGDV on a 25-month loan term, as Genesis Homes was due to complete the site acquisition.

Nicky Gordon, managing director at Genesis Homes, said: “Having our original funding offer pulled as we were about to complete our purchase of the site was far from ideal.

“Fortunately, I was aware that UTB was continuing to lend, despite the added complications and uncertainty surrounding the Covid-19 pandemic.

“Huw quickly appraised our proposal, liaised with HGP and, very soon afterwards, confirmed that UTB would provide the funding we needed to acquire and develop the land.

“Huw’s experience and knowledge of the housebuilding process and the challenges faced by SME developers is second to none and I look forward to this and many more successful developments with UTB and HGP.”

Huw added: “Although Genesis Homes is a relatively young company, it’s evident from its success over the last few years that it’s a company with a great reputation and a bright future.

“At UTB, we’re keen to build strong relationships with quality housebuilders, supporting not just one scheme but several and helping them to achieve their long-term growth ambitions.

“2020 was a challenging year for most housebuilders and I’m delighted UTB was able to step in at short notice and enable Nicky and the Genesis Homes team to crack on with this excellent new development, delivering high quality homes to families in the North West.”

John Mckeon, investment director at HPG, commented: “Lenders’ mettle has been well and truly tested over the last year, and UTB have shown yet again that they’re a reliable and trusted funding partner.”

Genesis Homes, which was founded in 2017, expects to complete around 150 new homes in 2021.

Source: Development Finance Today

 

/0 Comments/by

MARCH, A GROWING MONTH FOR CONSTRUCTION

IHS Markit/CIPS UK Construction Total Activity Index registered 61.7 in March

Robust growth in all major categories of construction activity during March

Fastest rise in commercial work for six-and-a-half years

Job creation accelerates to 27-month high

 

The recovery in UK construction output gained considerable momentum in March, supported by robust rises in house building, commercial work and civil engineering.

Adjusted for seasonal influences, the IHS Markit/CIPS UK Construction Total Activity Index registered 61.7 in March, up sharply from 53.3 in February. The latest reading signalled the strongest rate of construction output growth since September 2014.

Housebuilding (index at 64.0) was the best-performing category, with growth the fastest since July 2020. Strong increases in activity were also seen in commercial construction (62.7) and civil engineering (58.0) in March, with the index readings for both segments the highest since the second half of 2014.

Survey respondents often commented on the mobilisation of delayed projects, especially in areas such as hospitality, leisure, and office development. There were again reports of a boost from major infrastructure projects in March, as well as higher workloads due to greater spending on residential construction work and rising new home sales.

Improving client demand and contract awards on projects that had been put on hold earlier in the pandemic contributed to a steep upturn in new orders during March. Moreover, the rate of expansion accelerated to its fastest since September 2014.

Forthcoming new project starts spurred a solid rise in employment numbers, with the rate of job creation the strongest for over two years in March. Construction companies also signalled a sharp increase in purchasing volumes in response to greater workloads. The latest upturn in input buying was the steepest since November 2020.

Higher demand for construction products and materials contributed to longer wait times for deliveries by suppliers. Around 41% of the survey panel reported longer delivery times from suppliers in March, while only 1% saw an improvement. Supply constraints and logistics issues were commonly reported by construction companies, especially for imported items.

Imbalanced demand and supply for construction inputs led to the steepest increase in purchasing prices since August 2008. Survey respondents widely noted that suppliers had cited Brexit and COVID-19 as reasons for price hikes in March.

Meanwhile, the latest survey indicated a strong degree of confidence towards the year ahead outlook for construction activity. Growth projections were the most upbeat since June 2015, reflecting confidence in the UK economic outlook, the improving pandemic situation and pent up demand.

 

COMMENT

Tim Moore, Economics Director at IHS Markit, which compiles the survey:“March data revealed a surge in UK construction output as the recovery broadened out from house building to commercial work and civil engineering. Total activity expanded to the greatest extent for six-and-a-half years as residential spending remained robust, commercial projects restarted and infrastructure contract awards moved ahead. “Improving confidence among clients in the commercial segment was a key driver of growth, with development activity rebounding in sectors of the economy set to benefit the most from the improving pandemic situation. The increasingly optimistic UK economic outlook has created a halo effect on construction demand and the perceived viability of new projects. “Constrained supplier capacity and stretched transport availability continued to pose challenges for the construction sector in March. Short supply of products and materials pushed up purchase prices at the fastest rate since August 2008. “Continued pressures on supply chains are expected in the near-term, but these concerns did little to dampen confidence about the business outlook. The latest survey pointed to the strongest growth projections across the UK construction sector since those reported during a post-election bounce back in June 2015.”Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply:“Construction was full of the joys of spring in March with a sudden leap into solid growth fuelled by across the board rises in workloads in all sectors. The commercial pipeline was particularly spectacular giving its best performance since late-2014.”This upturn led to a significant boost in hiring levels with the fastest upturn in job creation since December 2018 offering a clear sign that companies are feeling more positive in planning for new builds and refurbishments of current properties.”Business confidence was also standing tall with future optimism about the next 12 months the highest since June 2015 which suggests it is mostly plain sailing now that lockdowns are ending and vaccine programmes are underway. The unfortunate spanner in the works comes in the form of the steepest inflationary rise in raw materials and other construction items since August 2008 at the height of the last commodity price cycle. Supply chains are still underperforming and almost half of the survey respondents said they had experienced longer delays and higher costs. If this continues, it could easily cool the sector down a notch.”

 

 

/0 Comments/by

Construction Rated High Insurance Risk

Amid increasing difficulty in finding insurance coverage for the architecture and construction sectors, architects accounted for more than a third of all professional indemnity claims submitted last year, a recent report from PolicyBee has revealed.

Despite making up of just 6% of all policies and 10% of the total value, architects made 38% of all PI claims in 2020, according to the Suffolk-based insurance broker’s latest claims report.

Ongoing issues in the construction industry – including several failed basement conversions and concerns about building cladding brought about by the Grenfell Tower disaster – led many insurers to deem the sector high-risk.

The situation has made it challenging for architects to find adequate PI cover as some insurance providers have raised premiums and excesses by up to 400%, introduced major exclusions within their policies, or pulled out of offering cover altogether.

The report said that if companies were able to get cover, it was “not always fit for purpose,” adding that the average capacity per underwriter has dropped by half in the last 18 months from £5 million to £2.5 million.

“Unfortunately, we expect challenges surrounding PI insurance to remain for a few years yet,” said Yasin Akdemir, architects’ insurance specialist at PolicyBee. “As well as rising premiums, policy renewals are another area of concern for architects as some insurers are ceasing to provide cover for the industry. Others are asking for far more information from customers than they used to, which of course takes time and can cause a bit of a paperwork headache for architects.”

In a statement, PolicyBee said that one way to address the problem is to use a specialist insurance broker.

“They have the advantage of being able to use their market knowledge to approach different insurers to find the most suitable policy at the best price,” the insurer said. “Brokers can save customers time and stress by doing the legwork and – crucially – checking policy wordings to ensure the necessary level of cover is provided.”

“Historically, architects have been responsible for putting in high numbers of PI claims at PolicyBee,” Akdemir said. “These often stem from common issues such as communication breakdowns between architects and their clients or builders failing to report or correct design problems. There is no doubt all businesses in the industry need the best level of protection from PI claims and their associated legal fees and compensation claims.”

With PI claims remaining high for architects, PolicyBee also urged those renewing their policies or looking for new ones to check the level of cover provided carefully, and well in advance of the date required.

/0 Comments/by

The Common Assessment Standard from CHAS: What you need to know

CHAS Managing Directr Ian McKinnon

The rollout of a new data-sharing agreement between the Common Assessment Standard providers means the benefits of qualifying for and specifying the scheme are greater than ever. CHAS, Managing Director Ian McKinnon explains more.

 

What is the Common Assessment Standard?

Since its launch in 2019, the Common Assessment Standard has fast become the construction industry’s gold standard for prequalification.

Led by Build UK, with the support of CECA, the scheme has been designed to replace multiple assessment schemes with one comprehensive industry-agreed questionnaire, based on existing prequalification questionnaires, including PAS 91.

Previously the PQ system was complex and repetitive, with an estimated 180,000 specialist contractors required to produce over two million pieces of paper every year for 5,000 contractors at a cost of up to £1 billion.

The Common Assessment Standard cuts through this inefficiency while helping the industry manage risk across a wider range of criteria such as sustainability, modern slavery and financial performance.

 

Who specifies the Common Assessment Standard?

As the Common Assessment standard is resetting a long-established system, a phased approach is being taken to its rollout. This allows companies to adopt the Common Assessment Standard at a time that suits them; however, it has already gained strong support from both the public and private sectors. The Crown Commercial Service (CCS) requires that contractors appointed to its seven-year framework assess their supply chains using the Common Assessment Standard, and it is expected to feature in the details of the Government’s new Construction Playbook. The Construction Leadership Council (CLC) also supports the scheme.

Many major contractors have also moved swiftly to specifying the new standard, with this figure expected to rise now that the data-sharing agreement is in place.

 

What’s the relevance of the data-sharing agreement?

CHAS was the first accreditation body to offer the Common Assessment Standard in 2019 via the CHAS Premier package. Although contractors could now take the assessment with other approved assessment bodies, the data-sharing agreement means the details of everyone who passes the assessment can be accessed via any of the providers, regardless of which assessment body carries out the audit. For CHAS contractors, this means they only need to complete the Common Assessment Standard once a year with CHAS to qualify for a wide range of work rather than having to sign up to multiple schemes – saving time and money.

Meanwhile, clients looking for pre-qualified contractors simply specify the Common Assessment Standard to find contractors accredited to a single, consistent industry-agreed standard. Clients can access a database of these contractors via the services of any of the assessment bodies – such as the free CHAS Client Portal.

 

Why choose CHAS?

As well as being the founder of third party accreditation and a trusted authority on supply chain risk management, CHAS is renowned for providing a friendly and efficient service and high customer satisfaction levels.

CHAS contractors receive additional benefits such as access to e-learning resources, discounted fuel and shopping schemes and business insurance. CHAS is also committed to helping contractors who are not yet ready to complete the Common Assessment Standard to work towards higher levels of accreditation.

Meanwhile, it is free, quick and easy for clients to sign up to the CHAS Client Portal where they will also find a suite of complimentary supply chain management and procurement tools.

 

How can you find out more?

To find out more about qualifying for, or specifying, the Common Assessment Standard, visit www.chas.co.uk or call 0345 521 9111

/0 Comments/by

THE DIGITAL TRANSFORMATION, IS CONSTRUCTION FALLING BEHIND?

 

 

Q&A: Alan Grant, Agility3 – leading digital transformation in construction

Construction is one of the least-digitised industries in the UK, and this lack of digitalisation could be hampering construction companies in a very competitive marketplace.  We speak with Alan Grant at Agility3, a leading solutions provider in the development of bespoke, high quality virtual 3D content and interactive 3D applications, who shares his thoughts on digital transformation in construction and how he believes we are now at a critical turning point for the industry.

 

What does digital transformation look like for the construction industry and what challenges does it present?

Digital transformation is, in essence, replacing old ways with new ways. It is utilising the technologies that are available, such as BIM, Digital Engineering, Big Data and 3D/4D visualisation, to improve operational processes, efficiencies and performance within construction.

It is not a new concept by any means, but the construction industry as a whole has been slow to adopt new technologies. This is understandable and can be attributed to a number of common challenges. Firstly, an unclear definition and understanding of what digitalisation actually means. Lower margins and restricted R&D budgets, which reduces the investment available for new technology. A fear of and resistance to change. Fragmentation of the industry, with a typical construction project involving large numbers of suppliers and subcontractors, making implementation of digital solutions across multiple companies and users complex. Silo working, which brings with it un-standardised processes and data, and can prohibit a collaborative approach and inability to train multiple users in new technology. Indeed, recent reports show that about 32% of firms are currently spending less than 3% of turnover on digital technologies.

 

How can construction companies overcome these challenges?

3D and 4D modelling, simulation, AR, VR and immersive technologies are almost limitless. They offer so much more insight and knowledge to projects that a simple 2D format just can’t – being able to have a virtual walkthrough of a building before, during or after a project, is immensely powerful. It is a fascinating and exciting area that offers significant benefits to the construction industry, and one that I am deeply passionate about.

In order to utilise it to its full potential, we need to see a cultural shift within construction companies. Getting people across the whole organisation to adopt a mindset, behaviour and approach change to realise the value it can bring. No easy task, but when you consider that research shows digital transformation can result in productivity gains of up to 15% and cost reductions of 6%, it is change that construction companies cannot afford not to make.

For me, the key to achieving this is what I refer to as PPIT – People, Process, Information and Technology. You cannot enforce technology and process, without first bringing your people on board – it just won’t work and companies will fail to embrace the new digital technology. Through educating and explaining the technology and process, they can start to use it efficiently in standard work processes and witness the benefits for themselves. The transformation starts with the individuals and radiates out throughout the organisation.

We need to educate that digitalisation is not just simply installing new IT solutions. It is as much about operational change as it is about technological change. It will fix pain points, enable collaboration in real-time, reskill teams and ultimately unlock increased value and performance, whilst significantly reducing time and costs.  Only by understanding this can the entire workforce, from the C-suite to the frontline, truly harness the power of digital transformation.

 

What are the benefits that it brings?

The benefits of adopting digitalisation are vast. From increased business and employee productivity, improved health and safety rates, business growth and new wins, closer collaboration with real-time feedback, improved training, through to reduced operating costs.

 

Why do you feel we are now at a critical turning point?

This isn’t something that is going to go away. It isn’t some sci-fi vision of the future. This is happening now and it is a case of construction companies coming on board or being left behind in this competitive market place.

Some of the bigger names in the industry who are adopting these technologies are making significant gains. We are seeing an uplift in desire to embrace these new and emerging technologies and realise all the efficiency savings they bring.

At the start of my career, I worked for one of the UK’s leading contractors and experienced first-hand the operational difficulties and inefficiencies they had due to out of date processes, as well as the alarmingly high health and safety and accident rates. Through my passion for visualisation technology, I worked with them to develop a number of apps to help improve efficiencies. These included virtual simulations of any accident, to improve training and prevent future health and safety risks, as well as 3D modelling to predict accurate excavations volumes. The result? Technology created a process which provided savings of £5 million and significantly reduced health and safety incidents.

This belief and passion in what technology can do for the industry, is what brought me to Agility3. The team here create bespoke interactive 3D and 4D visualisation applications, helping clients to visualise proposed complex plans in a virtual world. These applications allow for an ease of understanding, realisation of the impact on surrounding areas, and the ability to watch the progress of development throughout a project’s lifecycle.

A recent project we worked on here at Agility3, saw us developing a bespoke 4D visualisation application for an industry leader in the delivery of major rail and highway infrastructure projects. The application helped their prospective customer to understand and visualise the proposed plans for the construction over the next 5 years. The 4D functionality allowed full view of the construction activities that would take place on any one day, giving clear visibility and significantly improving stakeholder engagement and collaboration.

The impact that these technologies offers to the construction industry is truly significant.

What does the future hold?

The challenges construction faces are real, but they can be overcome. With what we at Agility3 offer, as well as others, I predict that instead of a resistance to change we will start to witness an increased demand for these technologies.

The industry is only going in one direction – digital. It offers abundant opportunity for the construction industry to evolve and grow and the time for digital transformation within construction is now.

If you’d like to learn more about how Agility3 can develop interactive visualisation applications to support your development project, please get in touch at info@agility3.co.uk or call on (+44) 01438 488066.

 

agility3.co.uk

/0 Comments/by

Fixing innovation streamlines installation of flat roofs with tapered insulation

Roofing and cladding fastening systems specialist EJOT UK has developed a new mechanical fastener solution to help installers save time and money when installing flat roofing with tapered insulation.

The JBS-R/EcoTek combination brings together a high performing concrete screw (JBS-R 7.5) with a high-quality telescopic tubewasher (EcoTek) to provide a fixing solution that is adjustable to fit the required depth of insulation. It is universally suitable too, providing a solution for mineral fibre, EPS, XPS and PIR tapered insulation.

As the illustration shows, this makes the fastener suitable for any insulation depth of between 70mm and 500mm, using fewer fastener / washer combinations than current mechanical fixing approaches. This can easily reduce fastener use for a slope insulation of 120 to 260 millimetres by as much as 25%, subject to the application, a site survey and pull out test.

Installation is easy as only one embedment depth is needed whatever the insulation thickness and adjustability is achieved thanks to the innovative way that the EcoTek tubewasher is driven into place using a custom tool with the fastener already in place. And where the insulation is especially deep, installers can simply use EJOT’s flanged A-cone and extension – this helps to eliminate the awkwardness of drilling deep using standard SDS drills.

Kevin Rackley, Product Manager for Flat Roofing Fastener Systems at EJOT UK said: “Cut to falls insulation is used in around a third of all the flat roofs installed in the UK today so it is important that we innovate and find ways to make this approach as easy and cost-effective as possible.

“This is why the JBS-R/EcoTek fastening system offers huge potential to make a difference for installers. Given the need for only one set embedment, using JBS-R/EcoTek means installers don’t need to think about the usual variety of product combinations on site – the job can be done easier and quicker with an all-round better result.

“And using this new EJOT product combination also simplifies ordering and stockholding for contractors with no need to source a variety of different concrete screws and stress plates.”

Long term performance is assured when using the JBS-R/EcoTek fastening system given the quality materials used to manufacture both fastener elements. The JBS-R concrete screw manufactured from case hardened steel and the EcoTek tubewasher is formed from high quality polyamide plastic to provide a lasting solution.

To find out more visit www.ejot.co.uk.

/0 Comments/by

NEW EV CHARGE POINT PROTECTION AND SAFETY SOLUTIONS FROM BRANDSAFE

Improved levels of protection for electric vehicle (EV) charge points installed in warehouse and distribution centre car parks are provided by a new range of high-performance solutions from Brandsafe, the UK impact protection equipment specialist.

 

There are currently in excess of 30,000 electric vehicle charge points across the UK in over 11,000 locations. Furthermore, the Department for Transport has allocated £10m to local councils to fund the installation of an additional 7,200 commercial charging stations by 2021.

The resilient, cost-effective and flexible EV charge point protection range from Brandsafe is ideal for the all round protection of new or current EV charge point installations from vehicles in car park areas and features an array of durable and impact resistant bollards, wheel stops and Armco barriers.

For light and medium duty applications, such as private office or public car parks, ImpactSAFE Protection Posts are available in either 600mm, 800mm or 1000mm height options. These bollards are strong and robust and feature different colour options to suit individual requirements, offering added safety and visibility for vehicle drivers when they are either reversing up to or pulling alongside a charge point.

In heavy-duty applications, where there is a higher risk of impact damage, ImpactSAFE Heavy Duty Bollards should be utilised. These bollards, which are available in 1000mm, 1300mm or 1600mm height options, are highly reflective and feature shock absorbing rubber buffers to deflect the force of impact away from critical areas, offering the requisite protective benefits for industrial use.

Vehicle traffic routing Armco safety barriers can also be installed in industrial areas to protect either individual or multiple charge points, providing a further level of protection against vehicle impact damage. The barriers come with hardwearing and weather resistant polyethylene corner and end sections to further protect electric vehicle (EV) charge points from collision damage.

A selection of highly visible and hardwearing vehicle wheel stops, which are quick and easy to install and moulded from recycled truck tyres, are also available as part of this new range. These can be specified to suit all applications, with solutions available to accommodate everything from domestic vehicles to commercial vans and HGVs. As with the bollards, various colours of wheel stops are available to match the client’s requirements.

Standard product packages have been created by Brandsafe to suit the application and location of EV charge points, but customers can also opt for bespoke solutions to suit their individual requirements.

Paul Roehricht, UK strategic account manager for Brandsafe, said: “The EV market in the UK is growing rapidly and operators need to protect their charge points from damage and loss. Our new range of added value impact resistant solutions offers a comprehensive, cost effective and accessible way to safeguard these investments.”

 

FOR FURTHER DETAILS CLICK HERE

 

/0 Comments/by

The Light Bulb Moments that was the Death of Modern Construction!

WAS THE LIGHT BULB THE DEATH OF MODERN CONSTRUCTION?

The invention of the light bulb was one of the worst things to happen to the construction industry, says chartered engineer Lee Marshall, managing director of leading sustainable building services company Viridis. Here he explains why… 

THERE is no disputing the economic and social impact that the arrival of the light bulb had on our lives. It allowed factories and businesses to run into the night, revolutionised our homes and social lives, and allowed us to travel safely in the dark. So much has been made possible with artificial light.

However, in my view, it was also one of the worst things that could have happened to the world of construction as it made everything smaller.

It led to the death of large, airy windows that let natural light flood in. Before the light bulb was introduced in the nineteenth century, properties were built to let in as much daylight as possible, thanks to the astronomical cost of oil lamps and candles.

In the post-war era, ceiling heights in properties really came down and windows became smaller as we could light our homes artificially. This continued into the housing boom of the 1950s and 60s and in the social housing growth of the 1970s and 80s. With the advent of LED lighting, our homes are more energy-efficient to run – not to mention warmer thanks to modern insulation and double glazing – but we haven’t updated our construction methods.

This needs to change. We need to not only start building better but also change our approach to how we build.

I firmly believe that if you have a good, sustainable housing offering that is scalable then there is an opportunity to transform the market, but designs need to be more creative. For example, there is a huge waste of space and volume with traditional triangular roof trusses – you are probably losing about 25 to 30 percent of the building for nothing.

We could push into that volume. By lifting the first floor a few hundred millimetres and raising the bedroom ceiling further into the loft, you could push up the space by about ten feet and put in bigger windows, create some nice features such as vaulting, and reduce the energy consumption.

Under current regulations, a window area must equate to approximately 20 percent of the floor area to allow a small amount of daylight. If we said it should be increased to 40 – 50 percent and the minimum ceiling height should be three metres, it would transform how we live and improve health & wellbeing.

We could also redefine our living spaces by changing the layout and geography of a house, which is normally dictated by the position of the stairs. If we put the stairs at the back of the property, then all the downstairs rooms could be at the front of the house. Would you even need windows at the back? It could be a north-facing wall that is timber-framed and well-insulated.

Then you could have bigger windows on the front. The bedrooms would be front or south-facing, making the property a more rectangular shape, and you would have a larger, south-facing front garden that is accessible from both the kitchen and living area. If an entire neighbourhood is organised in this way, it creates a sensitive layout that gives privacy but maximises daylight – reducing the reliance on artificial light.

I’ve been working in this industry for 20 years and understand it takes time to turn things around. Many in the building industry have convinced themselves that people want a square house with a big roof and there is a reluctance to break the mould.

As a practice, we know that being sustainable and saving CO2 emissions is about spending as little as possible in order to save as much as possible. As a result, we offer a different perspective to our clients and the projects we are involved in and we have certainly seen a good response. In fact, we are currently working on a selection of social housing that gives properties bigger windows and a higher floor to ceiling height.

So, while the invention of the lightbulb has led to building sizes being reduced unnecessarily, the energy revolution we are experiencing will allow people to live happily in homes that still have those important echoes of the past.

For more information about Viridis Building Services, visit viridisbsl.co.uk.

/0 Comments/by

Are you missing out on £70k in R&D Tax Credit Savings?

Why construction and civil engineering businesses are potentially missing out on an average of £70,000 in R&D tax credit savings

Experts provide insight for how companies in the construction sector can utilise R&D tax credits and be rewarded for their innovation

Are civil engineering businesses in the UK missing out on R&D tax credits?  With HMRC data revealing that the UK construction sector made up just under 6% of UK R&D tax credit claims, those operating in the industry are encouraged to consider whether they might be eligible.

For those that did make a claim from the sector as a whole, the average value of a claim was just over £70,000 in 2018-19.

What is an R&D tax credit for civil engineering?

SMEs and large companies in the UK can claim tax relief for a broad range of R&D activities, as part of schemes which are administered by HMRC. Typically, a business making a successful claim can get back up to 33% of the amount that they have spent on qualifying R&D.

Many people have a misconception of R&D as only suiting people who work in white lab coats, but the truth is that the term can be applied to any business that has done something innovative in the way it operates, or developed new ways of doing things. HMRC defines innovation as overcoming an uncertainty – something that could not easily be worked out by someone who is a professional in the field. And even if the innovation fails, it could still be eligible for tax savings.

There are five broad cost categories which can be included in a civil engineering R&D claim; staff costs, subcontractors, externally provided works (EPWs), software and consumables like heat, light and power.

Dominic Bartholdi, Head of Business Development at R&D tax specialists GovGrant, provides expert insight into R&D in the civil engineering profession:

Why the civil engineering and wider construction sector could be missing out on savings

We find that companies from all sectors have the potential to claim UK R&D tax relief. For tax purposes the definition of R&D is so much broader than you may think.

It is generally considered that there is little advancement in building houses or excavating groundworks as it is the kind of activity we’ve been doing in some form for thousands of years.  However, there are exceptions and these are the areas where clients need to focus.

What qualifies as R&D in the construction sector?

We see qualifying R&D activity in the innovative use of green or sustainable materials and methods. R&D often leads to an improvement in existing construction techniques to solve site-specific or environmental issues or developing new products such as lighter weight, stronger, more resilient or easier-to-process building materials.

It can be tricky to identify compliant activities in the civil engineering and construction sector but we know that firms of all kinds are now benefiting from refinement through technology. R&D tax claims can come from process improvements, production improvement and scalability and quality control. And we see this happening in all aspects of construction, including:

  • Adaptations like modular buildings and removable walls

  • Modifying or developing new materials which require or meet new specifications and tolerances

  • Developing new materials or techniques that are more sustainable and better for the environment, for example new insulation materials or application methods.

  • Developing new or improving existing machinery

  • Attempting to overcome unprecedented land or extreme environmental conditions

  • Achieving new fire and building regulations within specific constraints e.g. of machine access, historic listing restrictions or budget and time

Even when businesses are already claiming R&D tax credits, they might not have fully explored the potential of that claim.

What are the triggers that could suggest that a construction firm may have R&D that qualifies for a tax credit claim?

Knowing what is compliant R&D activity and what isn’t often comes down to level of uncertainty. It could be that a firm is doing clever and complex calculations – but being clever and skilled isn’t always the same as problem-solving to counter uncertainty. Take the example of an engineer who is using tolerances, stresses and tables to specify a project. Squaring the circle may be tricky, but if you are relying on existing knowledge in tables and standards then this doesn’t sound like R&D.

If, however, you are creating new standards and tolerances – because of a new material, a new piece of equipment or a brand new client requirement, then this suggests that this could be qualifying R&D.This can show itself in simulations, specific and iterative CAD modelling, designing prototypes, plugging in and working with new variables. This is very much the foundation of R&D. Also a failed project can be a sign that you’re tackling new ground.

What advice would GovGrant give to construction firms who are unsure whether they should apply?

Our one and only goal is to get you the maximum benefit you are entitled to for innovating. Initially we will assess the viability from a financial point of view to make sure it’s worthwhile making a claim, by reviewing your management accounts and tax computations. We don’t want to waste your time so we’ll give you realistic feedback from the start.

If there is a good chance of making a claim, we then arrange a meeting with each relevant department or site. This is when our specialists identify what qualifying R&D activity has taken place. We never ask the question ‘Tell me about your R&D?’ We have a detailed conversation to understand your whole business and the projects you are undertaking.

When you meet your dedicated specialist, it will feel like you’re talking to a colleague rather than your advisor.

Once a qualifying project is identified what next?

Once a project is deemed to be qualifying R&D activity then the next step of the process is to identify  what qualifying costs were incurred whilst carrying out the activity – so which staff, third party, and infrastructure costs can be claimed. Again, this might not be something that clients are aware of.

/0 Comments/by

£60m order book of Booming Builder

Brenig Construction Ltd; Pictured are Mark Parry and Howard Vaughan Managing Directors of Brenig. Picture Mandy Jones

A fast-growing North Wales builder has announced an order book bulging with £60 million of work including plans for 300 new homes in the next four years.

Mochdre-based Brenig Construction have doubled their turnover in the last 12 months to over £20 million and are currently working on sites from Bangor to Winsford in Cheshire.

It’s a rapid rise for the firm founded by joint managing directors Mark Parry and Howard Vaughan who started the business together in 2012 and now employ over 70 staff.

Howard Vaughan said: “We have strong connections with major housing associations in North Wales and we are also breaking new ground in Cheshire and in Shropshire.

“We have really hit the ground running since last year’s first lockdown ended and have secured a number of major contracts while we’re also in the running for a number of others.

“We have also built up an expertise in the construction of low energy passivhaus homes, working with one of the UK leaders in the field, Beattie Passive, and we believe this will become increasingly important.

“It’s the future of construction and having the expertise and competencies in this field and a record of achievement puts us in a good position within the industry.”

Their passivhaus projects, among the first of their kind in Wales, are in Old Colwyn, Llanrwst and in Denbigh where a 22-property development for Denbighshire County Council has just started.

Passivhaus uses sophisticated insulation, triple-glazed windows and air-circulation systems, to keep out cold in winter and heat in summer to achieve a stable and comfortable temperature so there are savings of up to 90 per cent in energy costs on traditional building stock.

The work for Denbighshire involves them in the first council house building programme in the county in 30 years with the new homes heated by a ground source system.

In Cheshire a joint private housing scheme venture with Calon Homes is under way in Middlewich with nine of the eleven properties already sold off-plan

They are also going to be involved in a major 21-home project with one of the UK’s biggest housing associations, the Guinness Trust, in Crewe and another project with another major housing provider, the Muir Trust, in Winsford.

Mark Parry said: “It’s very exciting to be involved in cutting-edge passivhaus projects which will revolutionise construction techniques for the future.

“We have in the region of £8 million of these kind of contracts on our books and we see this as a way forward for construction with the emphasis on new, green building methods likely to become even more important in future when it will be vital to have these capabilities.

“Overall we feel the potential for growth is huge and certainly we feel that the outlook is good and the volume of work should catapult us up the rankings of North Wales construction companies.”

It’s a positive outlook for a company established by two young civil engineers who first met as six-year-olds at their local youth club in Glan Conwy in 1987.

They first worked together at Dawnus Construction which they left to found Brenig in 2012 and their first major contract was a high-profile environmental improvement programme on the Parc Peulwys estate in Llysfaen above Old Colwyn for Cartrefi Conwy housing association.

In 2018 they moved into new headquarters at the business park in Mochdre which they built for Cartrefi Conwy with whom they work together as Calon Homes with Creating Enterprise, a subsidiary of the housing association.

They are also a growing presence in the housebuilding sector as Brenig Homes and have expertise in civil engineering and groundworks while their portfolio now also includes maintenance, social housing, commercial housing and plant hire.

 

Source: Wales 247

 

/0 Comments/by