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General election: dividing opinion

The construction sectors are currently abuzz with discussion about the potential effects a General Election will have on our industry. With some seeing it as an opportunity to refocus strategy and others concerned the fallout will impact heavily on future investment, Theresa May’s announcement has certainly divided opinion.

Carolyn Fairbairn, Director-General at the Confederation of British Industry (CBI) said “With a snap General Election now called, businesses will be looking to each political party to set out their plans to support economic stability and prosperity over the next Parliament in a way that is fair and sustainable for communities across the UK. Distraction from the urgent priorities of seeking the best EU deal and improving UK productivity must be kept to a minimum.

“It is essential to get the UK’s foundations right, from building a skills base for the next generation, to investing in infrastructure, energy and delivering a pro-enterprise tax environment.
“Whoever forms the next Government, they should seek to build a partnership between business and government that is the best in the world, based on trust and shared interest.”

Lewis Johnston, RICS Parliamentary Affairs Manager said “Since the EU referendum last summer, our market surveys across the residential, commercial and construction sectors show we have largely moved on from initial negative reactions but uncertainty continues to cloud the outlook and weigh on market sentiment. Today’s decision does very little to change that prognosis in the near term, and if anything we are likely to see continuing deferral of major investment and hiring plans.

“Whilst Theresa May’s stated intention this morning was to provide greater clarity and stability by calling a general election, in the immediate term the move inevitably puts a question mark over policy and creates further uncertainty across the built environment. It is now the responsibility of all parties to set out clear policy proposals across land, property, construction and infrastructure to ensure the UK can deliver the homes, infrastructure, factories, offices and major building projects it needs to thrive.”

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Industry must take responsibility for making Brexit work

The recent triggering of Article 50 has set Britain on a course to exit the European Union. It is essential now that Government and industry work together to get the best deal possible and ensure our country’s future growth and prosperity — it is everyone’s responsibility to make Brexit work.

Britain must retain its front-line position on the international stage. Delivering the airport hubs, high-speed rail networks and energy systems needed to make our cities and industrial hubs global competitors will be critical to our future success. However, it is unrealistic to expect Government to deliver a successful Brexit without the full — if sometimes constructive — support of industry.
Unless the free movement of skilled labour is secured during negotiations, we believe that the UK’s predicted £500 billion infrastructure pipeline may be under threat. Our latest figures show that 8% of the UK’s construction workers are EU nationals, accounting for some 176,500 people. A loss of access to the European labour market has the potential to slowly bring some of the UK’s biggest infrastructure projects to a standstill.

Securing the domestic skills pipeline

Yet while it is the role of Government to secure the trade agreement, industry must also work to secure the domestic skills pipeline. As the industry’s professional body, we are working with Government and industry to develop that skills base, building vital initiatives, such as degree apprenticeships, in our sector to drive the talent pipeline forward. A recent RICS survey revealed worrying figures showing that almost a quarter of our construction professionals fail to recognise the benefits of apprenticeships in solving the skills crisis. It is vital that industry gets behind such schemes for Britain’s long-term good.

Last week Qatar pledged to invest £5 billion in British transport and construction projects. We believe that if the Government puts the right incentives in place, the UK’s energy, rail and road infrastructure will benefit from further billions of overseas investment.

Industry must play its part

But again, industry must also play its part. Currently infrastructure projects across the globe measure and forecast the costs of construction differently. So, the same high-speed rail project in say Spain, would have an entirely different projected cost if it were located in the UK even after accounting for currency differences or regional labour and material costs.

We are working with industry partners to introduce a new standardised global measurement known as International Construction Measurement Standard (ICMS) that will allow investors to compare like-with-like. We believe that this will help to put infrastructure firmly on the map as a global investment opportunity.

Together, Government and industry must work together to deliver a construction industry that is robust enough to withstand any future political and economic uncertainty.

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8% of UK construction workforce comes from the EU

New figures from the Royal Institute of Chartered Surveyors (RICS) reveal that the UK construction industry could lose almost 200,000 EU workers post-Brexit should Britain lose access to the single market, putting some of the country’s biggest infrastructure and construction projects under threat.

RICS has cautioned that for Brexit to succeed, it is essential to secure continued access to the EU Single Market or to put alternative plans in place to safeguard the future of the property and construction sectors in the UK.

Latest RICS figures show that 8% of the UK’s construction workers are EU nationals, accounting for some 176,500 people. 30% of construction professionals surveyed revealed that hiring non-UK workers was important to the success of their businesses.

The UK is already in the grip of a construction skills crisis. While some overseas professionals, such as ballet dancers, are regarded as critical by the UK Government, and are therefore prioritised during the visa application process, construction professions have not yet been added to the ‘UK Shortage Occupations List’. RICS is warning that this could already be placing the UK’s predicted £500 billion infrastructure pipeline under threat and must be addressed as a priority.

When asked about the effectiveness of current plans to address the UK’s long-term skills shortages, 20% of respondents felt that apprenticeship schemes were not effective at all.

Jeremy Blackburn, RICS Head of UK Policy said “These figures reveal that the UK construction industry is currently dependent on thousands of EU workers. It is in all our interests that we make a success of Brexit, but a loss of access to the single market, has the potential to slowly bring the UK’s £500 billion infrastructure pipeline to a standstill. That means that unless access to the single market is secured or alternative plans are put in place, we won’t be able to create the infrastructure needed to enable our cities to compete on a global stage. We have said before that this is a potential stumbling block for the Government, which is working to deliver both its Housing White Paper and Industrial Strategy.

“A simple first step would be to ensure that construction professions, such as quantity surveyors, feature on the ‘UK Shortage Occupations List’. Ballet dancers won’t improve our infrastructure or solve the housing crisis, yet their skills are currently viewed as essential, whereas construction professionals are not.

“Of course, we must also address the need to deliver a construction and property industry that is resilient to future change and can withstand the impact of any future political or economic shocks — key to that will be growing the domestic skills base. As the industry’s professional body, we are working with Government and industry to develop that skills base, building vital initiatives, such as degree apprenticeships, in our sector to drive the talent pipeline forward. This survey reveals that more work needs to be done to promote the indisputable benefits of these schemes to industry — RICS intends to take this forward as a priority.”

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New report warns of Brexit impact on environment and air quality

The Mayor of London, Sadiq Khan, has expressed his ‘deep concern’ about the impact of Britain leaving the European Union on the environment – and on air pollution in particular.

In an official report about the impact of Brexit on London, the Mayor calls on ministers to ‘guarantee’ that environmental regulations, monitoring and enforcement standards will be strengthened in the aftermath of Brexit, rather than weakened.

European Union regulations have overall had a hugely positive impact on Britain’s environment. They have led to British homes, vehicles and appliances becoming more energy-efficient, waterways becoming cleaner, a decline in harmful emissions and a reduction in the amount of waste produced in Britain.

Only last year, European Union regulations were used in a legal case by Client Earth, in which the Mayor was an interested party, to force the government to come forward with a new air quality strategy by the end of March – bringing quality back within legal limits.

However, the Secretary of State for the Environment, Food and Rural Affairs, Andrea Leadsom MP, recently told Parliament’s Environmental Audit Committee that only two-thirds of EU environmental regulations would be directly brought into British law.

Furthermore, there are serious challenges to recreating monitoring and enforcement schemes that are currently run by the EU – and have no equivalent in British law.

The Mayor, in London’s official response to the government’s Brexit White Paper, is calling on the government to introduce a new Environment Act, to guarantee that environmental regulations and enforcements are at least equivalent, if not better, than the current EU standards.

This would include enshrining key EU safeguarding principles in British law, including the ‘polluter pays’ concept, ‘environmental rights for citizens’ and the ‘precautionary principle’ – so lack of knowledge is not used as an excuse for poor decisions.

Sadiq is also asking for a guarantee that recently announced EU policy – which has yet to be enshrined in UK law – including the recent Winter Package on energy efficiency and renewable energy, will be transposed into British law as part of the Great Repeal Bill.

The Mayor has made tackling London’s dangerously polluted air a key plank of his administration in City Hall. He has announced plans for a new T-charge on the most polluting vehicles from October, is consulting on introducing the world’s first Ultra-Low Emission Zone in 2019 and on extending it to the North and South Circular, is introducing Clean Bus Zones on the most polluted roads and has announced his intention to clean up London’s entire bus fleet by 2020.

The Mayor of London, Sadiq Khan said “I campaigned for Britain to remain in the European Union, but I accept that the British public voted to leave and we now must respect their democratic will.

“However, the British people did not vote to make our air more polluted or our environment dirtier.

“Our relationship with the EU has been particularly important for London’s environment. Our homes, vehicles and appliances are more energy-efficient, our water is cleaner and better protected, harmful emissions are on a long term decline and we produce less waste. This has all been helped by environmental protections and targets driven by EU directives, regulations and standards.

“The Government should legislate for a new Environment Act to ensure that the UK has an equivalent or better level of protection than in the EU, enshrining key environmental safeguarding principles such as polluter pays, environmental rights for citizens and the precautionary principle. It should also ensure that the necessary powers and resources are devolved to the authorities best placed to tackle their environmental issues and targets.

“I have made it clear that air quality is a key priority for my administration and Londoners need complete assurance of no reduction in regulatory standards and protections in this or other environmental areas. They must be strengthened rather than weakened.”

Sam Lowe, Campaigner at Friends of the Earth, said “Brexit can’t be allowed to undermine environmental progress, which is why government must commit to bringing EU environmental laws and principles into UK law. That’s just a first step, they then need to create the domestic institutions so that these laws are enforceable. Continued cooperation and collaboration on the environment with our EU neighbours must also be a priority in the Brexit negotiations.

“The fact is that climate change and air pollution transcend national borders, so they demand coordinated action at a regional and international level – Brexit won’t change that.”

Leah Davis, acting director at Green Alliance and chair of the Greener UK coalition, said: “With 80 per cent of the UK’s environmental laws having been developed with the EU, leaving the EU will be a pivotal moment to restore and enhance the UK’s environment. Today, nature is struggling and the air in our cities is dangerous to breath.

“We will need to secure the benefits of existing environmental laws as we leave the EU, and we will need to go further still, with ambitious new milestones for environmental restoration and high standards for pollution and resource efficiency. While the Greener UK coalition is ready and willing to play its part, it is vital that governments and politicians lead, and we welcome the Mayor’s leadership on this.”

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Purchasing attitudes remain intact post-Brexit

76% of people surveyed think country of manufacture is an important factor when it comes to purchasing. A survey, carried out by Giacomini UK, explored attitudes toward manufacturing and revealed some interesting post-Brexit insights.

When asked if the country of origin was checked before purchasing building and HVAC supplies, just 19% said that they never check which demonstrates the importance of a products’ origin when making decisions about purchasing.

83.5% of respondents said they prefer to buy products from a European manufacturer with just 8% saying that they would not ever buy a product if they knew it was made in Europe.

The survey also focused on more specific issues within the HVAC industry and asked respondents if heat interface units have made converting offices to residential properties more achievable. An overwhelming 84% agreed, which reinforces the noticeable growth that Giacomini UK has seen since regulations surrounding planning permission were altered, meaning that Class B1 offices could be converted to Class C3 residential dwellings without the need for specific planning and development permission.

Giacomini UK is the UK division of the Italian company, Giacomini, one of Europe’s largest producers of plumbing brassware and radiator valves and prides itself on its products being made to the highest specification at the company’s sophisticated manufacturing facilities in San Maurizio d’Opaglio, Italy.

Matt Lowe, managing director of Giacomini UK, commented: “Post-Brexit attitudes towards all the EU were always going to be interesting and our survey gave us some fascinating insight into mindsets and purchasing decision making factors. It would appear that people are now more conscious of where products come from but that EU are products still thought to be the best – despite the outcome of the referendum!”

For more information about Giacomini please visit www.giacomini.co.uk.
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RIBA reveal what UK architects really think about Brexit

Results from the most comprehensive post-referendum survey of architects have been published by the Royal Institute of British Architects (RIBA). The RIBA Members Brexit Survey results give an insight into the major concerns and opportunities from architects across the industry.

  • 60% of architects have seen projects delayed, cancelled or scaled back
  • 40% of UK-based non-British EU nationals are now considering leaving the country
  • Architects think Brexit offers chance of wholescale reform of the UK’s inefficient public procurement system
  • Strong support amongst architects to maintain high product and environmental standards and ensure that UK architects’ qualifications continue to be recognised in the EU and are in future recognised in other key markets too.

Over 65% of architects are concerned about the impact of Brexit on their business and any uncertainty is unsettling. However, as agile and business-savvy professionals, architects have been quick to see the potential industry benefits from the UK exiting the European Union. From trade agreements with new markets, reform of the UK’s public procurement system and increased public sector and private sector investment, our members have made it clear that with the right decisions the short-term impacts of Brexit can be mitigated, and the UK can position itself as a global facing nation.

In response to the concerns and opportunities raised by its chartered members, RIBA has today published a set of five priority recommendations for Government: Global by Design: How the government can open up new opportunities for UK architects. In order to maintain and strengthen the UK as a global hub for architecture, the Government must ensure the UK:

  • Has access to the best talent and skills
  • Signs trade agreements that open access to foreign markets
  • Provides support for education, research and innovation
  • Takes action to address the UK’s competitiveness crisis including infrastructure investment
  • Maintains common standards and low compliance costs.

RIBA President Jane Duncan said “Architects recognise that the UK must shape a new role for itself after we exit the EU – and we are already responding to that challenge. But we need leadership and support from the Government if the UK is going to maintain and strengthen its role as a global centre for architecture, responsible for innovative and inspiring buildings in the UK and across the world.

“To do that we need the Government to secure the agreements that ensure that our qualifications continue to be recognised in the EU and increasing access to new markets outside of the EU, maintain high common product and environmental standards consistent with brand UK abroad and address the structural challenges that threaten the UK’s attractiveness as a place to live, work and invest.”

“I’m pleased that the Government’s Brexit White Paper highlights a number of the key issues that we’ve been raising with ministers, but there is still a long way to go – particularly on the issue of who can work here. We can’t shut our doors to talent and expect the world to open its markets to us. The UK needs an immigration system that recognises the benefits and importance of the UK being an attractive place to work for ambitious architects from around the world. It’s vitally important that the Government acts to confirm that those already working and studying in the UK will be able to remain.”

The RIBA Members Brexit Survey report and the RIBA’s Brexit recommendations, Global by design: How the government can open up new opportunities for UK architects, can be viewed at www.architecture.com/brexit.
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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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We must build 2,000+ schools by 2020 to meet demand

More than 2,000 new schools must be built within the next four years to accommodate the rising number of primary and secondary pupils in England, according to Scape Group’s latest ‘School Places Challenge’ report.

The research has revealed that local authorities are expecting an additional 729,000 pupils in education by 2020 – a rise of 8.6% in primary school pupils and 12% in secondary school pupils in England alone. To tackle this increase, the equivalent of two new schools must be created each working day.

London, the South East and East of England are experiencing the highest growth with more than 375,000 additional primary and secondary pupils expected to be added to the registers in four years’ time.

Of the total 2,122 new schools needed, the equivalent of 12,209 primary classrooms and 12,078 secondary classrooms, London requires 507 new schools. The London Borough of Barking and Dagenham will see the biggest increase in pupil numbers, requiring a total of 28 new schools, followed by Lambeth, Newham and Greenwich, which need 21, 37 and 25 new schools built, respectively.

Outside of London, the Northern Powerhouse city of Manchester will see numbers rise to almost 19,000 extra primary and secondary pupils by 2020 – a 27% increase that will require the equivalent of 57 new schools. Rapid growth in the cities of Bristol, Peterborough, Milton Keynes, Leicester and Nottingham will also mean that new schools will become highly sought-after should the necessary amount not be built in time.

Mark Robinson, Scape Group Chief Executive comments: “As the growth of the primary school population gathers pace, the pressure on school places will soon transfer to the secondary population, requiring a new wave of advanced school building. The government’s preference for free schools has created uncertainty for local authorities, who are tasked with planning and building new schools, but will not be responsible for running them. Proposals for new grammar schools has further muddied the waters.”

Leaving the EU could have a profound effect on the UK population – we could see a short term surge in migration from Europe or a drop off in numbers if migrants are put off coming here. It is very difficult to predict what impact Brexit will ultimately have, putting even more pressure on local authorities who are planning how and where to prioritise school-building.

“In a post-Brexit economy, with all of the uncertainty this brings, the construction of new schools must be a top priority for government and local authorities must be given the tools and funding necessary to deliver extra places in time. Creative solutions including standardised design, classroom extensions and larger ‘super-schools’, as well as more effective use of land to deliver mixed-use developments, are all options we need to look at to deliver more new schools.”

Download the full report here.
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What’s changed within engineering and manufacturing? Reflecting on Brexit three months on

With three months having now passed since the outcome of the EU referendum, John Morris, CEO at JAM Recruitment takes a look at how the result has impacted the job market and production within the engineering and manufacturing industries.

Whilst the initial reaction to Brexit was one of concern, three months on, we’re yet to see a change to the market – we certainly haven’t seen the levels of disruption that were predicted. We’ve placed hundred’s of engineers across the likes of BAE Systems and GE over the last three months, and we actually started to see a growth in contract jobs in August – something that can be seen as a real positive for UK employment.

The overall impact

Despite initial warnings of job cuts, leading to increased skills shortages in engineering and manufacturing, the market hasn’t seen a great amount of change. Unemployment is still holding up at an 11-year low of 4.9%, which is incredibly promising. However, it’s too early to draw solid conclusions about the impact Brexit will have on employment rates, especially as Article 50 is yet to be triggered.

What does it mean for engineering and manufacturing?

Contrary to the initial predictions, recent reports have shown that British manufacturers have enjoyed rising output and a steady flow of new orders over the past three months, meaning Brexit didn’t deliver an immediate blow to businesses. Further to that, a recent REC report highlighted that engineering was the second most sought-after job category when it came to permanent staff, showing that any dip in confidence within the sector was short-lived.

What will the future bring?

The recent Engineering and Technology Skills and Demand in Industry report found that while demand for qualified engineers is increasing in the UK, the education system fails this industry by not producing engineers that are fully prepared and experienced enough. As a result, the best option for employment would see the UK Government ensuring that STEM subjects are given more of a push, which will better equip our future workforce.

To ensure that there remains access to skilled engineers in the UK, it’s crucial that the government doesn’t stifle access to the skilled candidates with its immigration policy. Whilst we do have an incredibly strong network of skilled professionals in the UK, the freedom of being able to recruit staff from Europe is still hugely beneficial, especially within the industries where there is a well-recognised skills shortage.

Whilst we wait for the activation of Article 50, it’s essential that we continue to work closely with clients to ensure that we’re taking preventative steps to minimise the impact Brexit may have. This will mean continuing to attract students to the UK industry, whilst also investing in up-skilling those already working within the sector.

Written by John Morris, CEO at JAM Recruitment

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For more information about JAM visit www.jamrecruitment.co.uk.
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