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Boosting construction productivity could deliver £15 billion savings every year

New plans set out by the Department for Transport will revolutionise British infrastructure and boost the construction sector’s productivity in a move that could generate savings of £15 billion a year.

The plans were revealed alongside the National Infrastructure and Construction Pipeline, which sets out projects for the next 10 years.

This £600 billion pipeline includes both public and private investment. It will give certainty to industry that there is great appetite to develop infrastructure and will encourage the sector to invest in the right technology and skills to meet this demand.

The Transforming Infrastructure Performance programme sets out how the government will ensure these projects are delivered swiftly and efficiently. It contains ambitious plans to transform infrastructure delivery over the long-term, using the government’s influence to drive modern methods of construction so Britain can lead the world in high-tech building. The Transport Infrastructure Efficiency Strategy sets out how these lessons will be applied to drive efficiency and productivity in transport.

Andrew Jones MP, Exchequer Secretary to the Treasury, said “We are backing Britain with a record amount of infrastructure investment as we build an economy fit for the future. That’s why we’re working with the industry to skill up and scale up for the challenges ahead.

“Investing in infrastructure boosts productivity for the economy as a whole. The scale of the investment we are talking about here will deliver a step change for our country.”

Transport Secretary Chris Grayling said added “We’re undertaking the most ambitious improvements in our transport network this country has seen for decades. But we must also drive forward plans to ensure these infrastructure projects are completed on time and on budget.

“World-leading projects such as Crossrail, the Ordsall Chord and the huge investment programme in our major roads show that Britain can deliver on time and on budget, boosting jobs and growth and creating new opportunities across the nation. But we want to do better. This strategy shows the way and sets out our standards for how we will do more and better in future.”

The government is a major player in construction and delivers many projects every year, such as transport, schools, prisons and hospitals. This accounts for a quarter of all construction projects, and using this purchasing power will enable ministers to drive innovation and encourage firms to invest in modern methods and technology.

Methods such as off-site manufacturing, where projects are part-constructed before being assembled on location, can boost productivity by reducing waste by 90% and speed up delivery times by more than half (60%). For example, a school that typically takes a year to build could be done in just over 4 months.

The announcements tackle this head on and give the sector the certainty to start investing in the right technology and skills.

Tony Meggs, Chief Executive of the Infrastructure and Projects Authority (IPA), said “Publishing our Transforming Infrastructure Performance (TIP) programme demonstrates our commitment to tackling the annual £15 billion productivity gap in construction. The IPA has a significant role to play in helping to create a more productive and innovative sector.

“We want to maintain confidence in the sector and will work alongside industry, using our purchasing power to drive the adoption of modern methods of construction in both new and existing infrastructure. The scale of ambition is great but by aligning our initiatives we can work with industry to deliver transformation for the sector.”

Andrew Wolstenholme, Co-Chair of the Construction Leadership Council (CLC), said “The Transforming Infrastructure Performance programme presents a huge opportunity for the industry and government to reap the economic gains from improving productivity during the delivery of the UK’s £600 billion infrastructure pipeline. Transport is a huge part of that.

“I am delighted that the IPA, DfT and CLC are working closely to encourage construction clients to procure on the basis of whole life value, deliver more industry led innovation, develop the skills we need for the future and give the UK a competitive advantage in exporting new technologies and expertise. I am proud to chair the Transport Infrastructure Efficiency Taskforce which will ensure these strategies are brought to life across the transport sector.

“It all adds up to better economic and social infrastructure, as well as more homes, delivered quicker, at better value and more sustainably than ever before, underpinning the UK’s growth and providing jobs all over the UK.”

 

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Government unlocks £25 million to deliver more homes

A new £25 million fund has been launched to help local authorities to deliver the high quality, well designed homes that this country needs.

Housing and Planning Minister Alok Sharma this week announced that the Planning Delivery Fund is now open for bids and will support ambitious local authorities and third sector organisations in areas of high housing need to plan for new homes and infrastructure.

Initially opening up £11 million of the fund, councils will be able to apply to help gain the skills or capacity they need to deliver high quality housing growth at scale, pace and implement wider planning reforms. The fund is aimed at encouraging more innovation in the design quality of new housing developments, as well as provide design advice and support to local authorities.

As part of the government’s plans to raise housing supply to 300,000 per year on average by the mid-2020s, a package of measure has been announced to boost local authority planning capacity, support councils to take a proactive role in planning and encourage ambition and leadership in the delivery of new communities.

Others measures announced along with the £25 million Planning Delivery Fund include:

  • a further £3 million funding to support the delivery of the 14 garden villages that are part of the government’s existing programme
  • publishing a consultation on plans to allow the creation of locally led New Town Development Corporations, and help speed up the delivery of new garden towns

Housing and Planning Minister Alok Sharma said “Locally-led developments have enormous potential to deliver the scale and quality of housing growth that we need. By supporting our local authorities, we will be able to unlock more homes where people want to live.

“These measures including the £25 million of government support which will help develop new communities that will not only help deliver high-quality well-designed homes, but will also bring new jobs and facilities and a boost to local economies.”

Across England, the government is currently supporting 24 locally-led garden cities, towns and villages, which have the potential to deliver around 220,000 homes.

Backed by £16 million funding, a further £3 million has been allocated to 14 garden villages in the programme to fund dedicated staff and studies and assessments that are vital to the delivery of garden villages that are key to successful delivery.

The government’s housing white paper in February 2017 committed to the creation of New Town Development Corporations, which would be overseen by the local authority or authorities covering the area proposed for a new garden community, rather than by Whitehall. Government is now seeking views on this proposal.

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Construction project starts forecast to steady in 2018

Glenigan expects the value of construction starts to stabilise in 2018, after the declines seen over the last two years, as construction clients adapt their investment plans to the changing political and economic environment.

Commenting on the prospects for the industry, Glenigan’s Economics Director, Allan Wilén said “The value of underlying construction projects has fallen back this year amid continued political and economic uncertainty, delays to public sector projects and a weakening in housing market activity.”

“Whilst a weak UK economy is forecast to constrain construction activity over the coming year, we anticipate greater stability in overall construction starts as strong growth in hotel and leisure, industrial and education work help offsets weakness elsewhere.”

“The industrial sector is forecast to be a growth area as technological and social changes reshape consumers’ retail habits and drive the demand for logistics space. We expect these structural changes to be a long term driver for warehousing and logistics projects as online retailing takes an ever larger share of retail sales and as retailers adapt to changing spending patterns and shopping habits. The Midlands, North West and parts of the South East of England are favoured locations for such facilities, offering good access to national transport networks and the UK’s major population centres.”

“The hotel & leisure is also forecast to be a growth sector over the coming year. Consumer spending on leisure activities remains firm and the sector is benefiting from the depreciation in the pound over the last two years which has boosted UK tourism and encouraged UK consumers to holiday at home.”

“Demographic changes are set to shape the pattern of construction activity. Increased investment is anticipated to expand the secondary school estate in order to accommodate rising pupil numbers, especially in the UK’s major conurbations. In addition universities are investing in new facilities as they compete for UK and overseas students.”
“Growth in these areas will help offset weakness in the private housing and office sectors.”

“Real household earnings growth has stalled due to weak wage growth and higher inflation. This is forecast to slow housing market activity, with weak new house sales holding back sector activity. The value of private housing projects starting on site is forecast to drop 3% next year as housebuilders prioritise building out current developments and open fewer sites.”

“Political and economic concerns arising from the EU referendum depressed office project starts during 2016 and 2017. These concerns are expected to persist as investors appraise the implications of Brexit and of slower UK economic growth for the demand for office space and rental values. Developments in the City of London and Docklands will be especially vulnerable with weaker demand for accommodation as financial institutions consider relocating operations to elsewhere within the EU.”

“Major infrastructure schemes, including, Thames Tideway, HS2 and Hinckley Point, are forecast to drive civil engineering activity next year. The value of smaller scale projects starting on site have fallen back sharply this year and are expected to weaken further in 2018 as investment is dominated by flagship projects.”

GLENIGAN

A full copy of the Glenigan Outlook Forecast is available to download here.

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Construction workers urged to take extra care on site this winter

With parts of the UK experiencing bitterly cold weather, roof systems manufacturer Marley Eternit is warning outdoor construction workers to take extra care this winter.

Freezing cold temperatures, ice and shorter periods of daylight mean there is a much greater risk of accidents on construction sites during the winter months. As well as the risk of slips and falls, prolonged exposure to the cold can cause construction workers to suffer from more colds, bronchitis, asthma, painful joints and fatigue. In extreme cases, workers outside for long periods, without the right protection, could even suffer hypothermia, frostbite and chilblains.

Katie Prestidge from Marley Eternit comments: “In the UK, there is no legal minimum outdoor working temperature. So, it is important that all construction workers understand the hazards of working in winter and know what precautions to take when cold weather sets in. Builders and contractors must carry out their own thermal risk assessments and take appropriate action to protect their employees.”

The National Federation of Roofing Contractors (NFRC) is backing Marley Eternit’s winter safety campaign. Gary Walpole, the NFRC’s Technical and Health & Safety Officer, said “Accident statistics prove that there is an increased risk of personal injury during the winter months. Increased hazards from reduced daylight hours and inclement weather, means precautions need to be taken in advance to protect the wellbeing of our workforce.”

Marley Eternit has put together the following advice to help construction workers stay safe on site this winter:

Site managers and supervisors

Monitor the weather forecast so you can anticipate and be prepared for poor weather conditions

  1. Carry out a risk assessment every day to check that it is safe to work and that conditions haven’t changed. Pay particular to working at height platforms and walkways. Do not work on roofs in icy conditions
  2. If windy, HSE recommends that roofers should check wind speeds with a hand held anemometer and refer to NFRC guidance on roofing in windy conditions*
  3. Make sure workers are trained on winter hazards and ensure they have the appropriate PPE
  4. Limit worker exposure to cold through job rotation and provide plenty of breaks in heated areas with hot drinks available

Site workers

  1. Make sure you are wearing the right PPE and extra clothing suitable for the job and the weather conditions. This usually involves using several layers of clothing, as well as waterproofs or wind resistant fabrics where necessary. Also choose water resistant footwear, with enhanced slip resistance or ice grips if required
  2. Wear gloves when fine manual dexterity is not required and the temperature drops below 4°C
  3. Cold weather increases the risk of hand-arm vibration syndrome, so keep your hands and arms warm when using vibratory equipment such as drills, nails guns and even hand tools, such as hammers
  4. Choose hats that work with safety headgear and don’t compromise any eye or hearing protection
  5. Be aware of the symptoms of cold exposure – heavy shivering, uncomfortable coldness, numbness, aching, severe fatigue, confusion, drowsiness and/or euphoria
  6. With reduced daylight hours, visibility can be a problem, so wear reflective PPE
  7. Take breaks in heated areas and drink plenty of fluids, including water and warm beverages
  8. Report any hazardous areas to the site manager and do not put yourself at risk just to complete a job.
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Report shows public backing for infrastructure and housing investment

 

More than half of people in the UK rank housing as the most important investment priority for the country, closely followed by renewable energy and major roads, according to a new report published today.

The report, published by Copper Consultancy in partnership with TLF Research, and launched at the Institution of Civil Engineers, found that the majority of people in the UK support infrastructure investment, but do not feel that they have enough information available on the future of infrastructure and housing.

Almost 60% of people stated they would be more interested in infrastructure and development projects if the benefits were clearly explained.

The research showed that almost everyone has a view on the condition of housing, roads and rail, but there is less understanding of infrastructure where the benefits are not explained.

Linda Taylor, managing director of Copper Consultancy, said “What’s clear from the research is that the public wants the opportunity to support infrastructure investment, but unless they understand the benefits, people do not feel equipped to get involved.

“The public wants support in linking projects to day to day life and experiences. We’re left with an investment-benefit disconnect.

“The government and industry have an opportunity to tell a coherent story about the real life benefits that investment in infrastructure and housing delivers. Our research shows that when the benefits are made clear, the public is supportive. If we achieve this, public support for infrastructure could lead to fewer delays to projects and the benefits of infrastructure will be realised sooner.”

President of the Institution of Civil Engineers, Professor Lord Robert Mair CBE FREng FICE FRS, said “The report makes a major contribution to our understanding of the public’s aspirations for UK infrastructure. At a time when infrastructure is key to the future of the UK’s economy, the report’s findings are not only timely but also encouraging.

“The report shows the public can link positive change to infrastructure investment if they understand the benefits as outcomes and impacts to them. Engaging and educating the public – who are ultimately the customers and end users in infrastructure – is therefore crucial. To achieve this, we need to change the language around the subject and make the profession of civil engineering more accessible. It is up to us to take the findings of this report forward and to proactively tell our stories to the public.”

Nigel Hill, chairman, The Leadership Factor said “There is public support for investment in housing and infrastructure but also significant concern that the two are often not sufficiently linked. There is a strongly held view that planning permission should be more influenced by the adequacy of the surrounding infrastructure especially roads, other transport links and schools.”

Click here to view the full report.

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Campaign launched to encourage more women into construction

Considerate Constructors Scheme’s industry survey reveals more needs to be done to change perceptions and encourage more women into construction

Whilst 79% of respondents said the construction industry has improved its approach in encouraging women into construction, 52% have witnessed or experienced sexism within the industry.

The survey also reveals the main reasons women do not choose to work in construction cited as being:

  • working conditions – 22%
  • lack of female role models – 22%
  • negative image of the industry – 20%

The UK and Ireland campaign ‘Spotlight on…women in construction’ has been launched by the Considerate Constructors Scheme to boost the much-needed industry effort to attract more women into the construction industry.

The Scheme, which makes around 15,000 monitoring visits to construction sites, companies and suppliers every year, surveyed over 1000 people to find out why women still only represent a meagre 11% of the construction industry workforce. The Campaign provides a variety of practical steps that can be taken to address this issue in the short, medium and long term.

The survey findings also revealed that:

  • 94% of respondents agreed that the industry would benefit from employing more women.
  • 76% said there are no construction jobs which only men can do.
  • 74% said there should not be quotas for hiring women into construction.

It is clear from the survey, that although some results appear encouraging, there is still a huge amount to be done, particularly in addressing sexism and changing misguided perceptions of what a career in construction offers to women.

‘Spotlight on…women in construction’ pulls together the latest and greatest examples of best practice, case studies from women working across the construction industry, legal requirements and links to useful organisations encouraging women to work in construction.

The Campaign extends the Scheme’s influence in this important area; by complementing the Scheme’s monitoring Checklist which asks several questions about equality and diversity to raise standards across the thousands of Scheme-registered sites, companies and suppliers; and the role of the industry mascot, Honor Goodsite in visiting hundreds of schools across the UK and Ireland every year.

The importance of having role models is absolutely critical. As such, ‘Spotlight on…women in construction’ has interviewed a number of women within the industry to examine what opportunities and challenges they have faced and why construction offers a great career for women of all ages, backgrounds and skills.

Case study contributions include: Roma Agrawal, (Structural Engineer at AECOM and a Director of the CCS); Stephanie Bennett, (trainee Quantity Surveyor, Morgan Sindall); Victoria Betts, (Senior Site Manager, Higgins Construction), Sally Cave, (first qualified female Gas Membrane Installer in the UK); Margaret Conway, (Project Manager for McAleer & Rushe and winner of CIOB Construction Manager of the Year 2017 Award); Michèle Dix (Managing Director, Crossrail 2); Katie Kelleher (Crane Operator, Laing O’Rourke); Eillish Kwai (Employment and Skills Manager, Ardmore); Kath Moore, (Carpenter and Chief Executive, Women into Construction); and Megan Robinson (Technical Coordinator at Barratt Developments plc).

Managing Director for Crossrail 2, Michèle Dix said “Women are still underrepresented at present but I think we are starting to move in the right direction. We need to recognise the need for more flexible working arrangements, especially if we are to encourage women back after taking time off for children.

“I think there are lots of opportunities out there and one message I would give to my fellow women colleagues is “go for them!”. Be confident in your own abilities. The industry has so much to offer.”

Site Manager for Higgins Construction, Victoria Betts said “In the time I have been working in the industry there has definitely been an increase in the amount of females working in it. The Considerate Constructors Scheme has been a big driving force in this as it insists on facilities for females that previously would not have been in place.”

Considerate Constructors Scheme Chief Executive, Edward Hardy said “Thank you to everyone who has contributed to ‘Spotlight on…women in construction’. The Campaign provides a must-read set of resources for organisations and individuals who would like to improve their standards of considerate construction – with the aim of driving greater equality, diversity and inclusion throughout our industry.

“Not only is it imperative that standards must be raised in this area, in order to help encourage more women into the industry, but a more equal and diverse workforce also brings greater collaboration, creative thinking and more inclusive workplaces. This can only be a positive step in helping to improve the image of the UK and Irish construction industries.”

Click here to read ‘Spotlight on…women in construction’.

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Autumn Budget – industry overview

At 12:30 today Chancellor Philip Hammond delivered his ‘make or break’ autumn budget to the chamber. Touching on key issues such as the housing crisis, skills shortages and planning reform, the latest budget included much for the construction sector to get excited about. But with the Chancellor’s promise of 300,000 new homes a year by mid-2020s, will the range of measures signalled in today’s Budget be enough to achieve that ambitious target? Buildingspecifier.com takes a look at what the industry is saying in response:

Housebuilding increase

A lot has been made in the run-up to the budget of the Government’s expected target to build 300,000 new homes next year. Speaking about this afternoon’s announcement, Bjorn Howard, CEO of Aster Group, said “We welcome the clear-cut push to increase housing stock, but would have liked Mr Hammond to have acknowledged that variety is as much a problem as volume for the sector.
“Housing is increasingly a point of division in society. Remedying this depends on tackling affordability and choice in the market, including greater availability of alternatives to traditional rent and homeownership options, such as shared ownership. This is where housing associations, alongside local councils empowered by greater borrowing freedom, can play an important role in increasing the number of affordable homes across the UK.”

SME builders

The Chancellor Philip Hammond has clearly delivered a ‘budget for builders’ that should allow small builders to deliver more of the new homes Britain so badly needs.

Commenting on the Budget 2017, Brian Berry Chief Executive of the FMB said “The Government has set itself a new target of building 300,000 new homes a year by the mid-2020s. And today the Chancellor has put small and medium-sized builders at the heart of ambitious plans to tackle the growing housing crisis. The Chancellor appears to be putting his money where his mouth is with the announcement of £44 billion of capital funding, loans and guarantees. In particular, a further £1.5 billion for the Home Building Fund to be targeted specifically at SME housebuilders can play a significant role in channelling crucial funding to this sector. A £630 million fund to prepare small sites for development and proposals to require councils to deliver more new housing supply from faster-to-build smaller sites will provide opportunities to boost small scale development.”

David Gray, Bid Development Director at AM Bid, added “The Chancellor’s announcement of £1.5bn of new money for the Home Builders Fund will be welcome news for SME housebuilders looking to bid for construction contracts across the UK.

“Moreover, the commitment to provide at least £44bn capital funding, loans and guarantees to support the housing market over the next five years, should result in a marked increase in construction contract opportunities. These contracts will be necessary to help support the delivery of the 300,000 new homes per year the Government is aiming to deliver by the mid-2020s, which would represent the highest level of new housebuilding seen in the UK since the 1970s.”

Borrowing caps

On Housing Revenue Account borrowing caps being lifted for councils in high-demand areas, Gavin Smart, deputy chief executive at the Chartered Institute of Housing (CIH), said “We have long argued that if we are going to build the homes we need councils will have to play a major part and we welcome measures to support this. The government has made a series of announcements in recent months which lay the foundation for housing associations to commit to developing many more new homes and we must do the same for councils. Relaxing borrowing caps for councils in high demand areas is very positive – we hope to see the government build on this move so that we see a return to the levels of council house building we need.”

Modern methods of construction

As part of his budget speech, Chancellor Philip Hammonds indicated that the government would release more funding to the education sector to alleviate overall financial pressures on schools. However, the Chancellor failed to mention the potential of both offsite construction and energy efficient retrofitting practices as potential areas where savings can be made.

Commenting, Neil Smith, Chief Executive Officer at Net Zero Buildings, said “While we welcome the extra funding, the evidence shows that the government could also ease the funding pressures that schools are facing in different ways. We cannot afford to waste this new funding on inefficient new buildings that are not fit for purpose for teachers or pupils.

“As 60% of school buildings were built before 1976, many head teachers are having to consider how to fund new buildings against a tight budgetary backdrop. A new report we have commissioned with the Centre for Economics and Business Research (Cebr) has found that modern building technologies could meet the growing demand for new school buildings while saving the Department for Education (DfE) billions of pounds. It also concluded that if all schools in England were as efficient and economical to maintain as the UK’s most energy efficient school buildings it would save the DfE £2.6bn a year.

“Across the country, millions of pounds can be saved every year on school lifecycle and maintenance costs if head teachers are prepared to think differently in how we create new buildings.”

Build to Rent

The Government’s push for longer-term tenancies is very welcome news for the build to rent sector and for UK renters.

Dominic Martin, Head of Operations at Atlas Residential said “Providing the customer with greater flexibility and security through long-term tenancies is a positive step forward for the rental market and an acknowledgement that the customer should remain firmly at the heart of everything we do – these are people’s homes.”

Materials

The Brick Development Association, representing brick manufacturers in the UK, welcomed the Chancellor’s target for new homes, announced in the budget today, stating with confidence that the brick industry is ready.

The number of new homes delivered in the last financial year – at 217,350 – is 12% up on the previous year, with brick deliveries also rising at 12% over the same period, suggesting that supply and demand are in balance.

Today’s speech presented an ambition to deliver an annual total of 300,000 new homes each year by the mid-2020s – approximately eight years from now. This represents a 38% increase. Brick manufacturing output is increasing year on year with growing investment in plant and equipment. The brick industry is unusually adaptable and in the last eight years production output has risen 38.5%.

Supplying a very volatile housing market is never easy for manufacturing suppliers, but the brick industry has proved itself particularly able to scale up demand as required and is currently well able to meet demand from new house building.

“We are delighted at the focus on housebuilding in the budget” commented Tom Farmer of the BDA. “It is time for the country to face up to the economic and practical challenges and actually build enough homes for the people that live and work in the UK. I am delighted to be working in an industry that is keeping pace with this fast-moving sector and which is ready to gear up to meet increased demand.”

Skills shortage

Although the budget contained many impressive statements related to getting Britain building, it didn’t say much in the way of alleviating the skills shortage to ensure that we have the right people working within the industry to make it happen.

Brian Berry, FMB said “A major challenge to getting new homes built is the skills crisis we face. In the long run, the only real solution to chronic skills shortages will be a major increase in the training of new entrants into our industry. We are therefore pleased to hear the Chancellor has today committed extra resourcing to training for construction skills. With Brexit round the corner the next few years will bring unprecedented challenges to the construction sector. The Government will need to make sure that the sector continues to have access to skilled EU workers, but we are pleased that the Chancellor has today listened to the needs of SME builders.”

In summary

It was dubbed as Hammond’s ‘make-or-break’ budget; there were three key challenges facing the Chancellor today in a budget which was delivered against a background of Brexit and a substantial decline in growth forecasts which threatened his tenure. Housing, infrastructure and productivity announcements were the Holy Trinity designed to save his job.

Whilst the industry appears to welcome the government’s ambitious new target to deliver 300,000 new homes a year overall, concerns still remain about how we will build the right homes in the right places. And how will we ensure that they are affordable?

Abolishing stamp duty for first time buyers is welcomed, as is some form of planning reform but there was a meagre sum mentioned for training and throwing money at the housing crisis will not solve the labour shortage or skills crisis. Infrastructure investment is also welcome but we need concrete timelines rather than further hollow promises. Productivity is a complex issue and his comments on the role of digital enablement underlined that, as an industry, we need to help ourselves but again, short term improvement is linked to a guaranteed labour pool and Brexit has caused a stampede of trades out of the UK, something this government has exacerbated through their dithering. So the overall impression from the sector seems to be that it was a stalwart attempt but not enough to instil confidence as we crash out of Europe.

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Pre-Budget briefing from industry experts

Housing is set to dominate tomorrow’s Autumn Budget, but it is not yet clear what type of Budget the Chancellor will deliver. Industry experts The Housing & Finance Institute have today published their pre-Budget briefing. The Housing & Finance Institute has laid down a marker for the government in identifying six potential budget themes – and some of the key policies we should look out for in the Chancellor’s statement.

What type of budget will it be?

1. The Big Build Budget: this budget would focus on the largest peacetime building programme since Bevan/Macmillan. Key policy changes would need to open up large land holdings and financial measures would need to substantially increase direct government funding as well as unlock manufacturing at scale, boost skills and boost all tenures from social rent to home purchase.

2. Next Generation Budget: this budget would focus on quality of life, quality of renting and cost of living issues for the ‘generation rent’. It could include wealth distribution support from older to younger generations.

3. Industrial Strategy & Growth Budget: while a ‘big build’ budget would be primarily about housing and be widespread across cities and county areas alike, an industrial strategy & growth budget would be about focusing resources on specific growth areas, such as the Oxford-Cambridge corridor, the Northern Powerhouse, London and the Midlands Engine.

4. Brexit Budget: housing within the Brexit context would be a greater focus on accelerating the application of large scale manufacturing and the build up of skills to meet the needs of housebuilding. It would also need to look at materials within a post Brexit customs and trade context, as well as energy and utilities innovation.

5. ‘Steady as she goes’ Budget: this is not the budget that is expected but it is possible. There is a something to be said for carrying on with an even tiller while everything else is being decided.

6. ‘Care & Repair’ Budget: against the backdrop of the Grenfell tragedy and challenges around elderly care and supported housing for vulnerable groups together with new homelessness duties coming into force and concerns about poor quality landlords, it can be expected that there will be packages of ‘care & repair’ around affordable and social housing, supported housing and remediation, alongside big build and growth commitments.

Industry & Sectors: Winners and Winners?

There are four broad areas that the Budget and supporting documents should cover from an industry and sector perspective: National Government, Councils, Housing Associations and Housebuilders.

To help you navigate the policy announcements we’ve set out what to look out for in relation to housing and housing related infrastructure.

National Government

The main theme of national government is expected to be a strong return to government direct intervention. This has been a dominant theme since Mrs May became Prime Minister, yet it hasn’t translated to large scale intervention. This could be the fiscal event to define what that looks like.

What to look out for:

  • Direct Central Government delivery of housing on public sector land. To be delivered through a powered up Homes & Communities Agency/ Homes England.
  • Immediately before the Budget government action has seen the Communities Secretary start to intervene directly in local plans. A more muscular state has been in the making since the Housing White Paper. This latest move is the first serious flexing of those state muscles, and more of this is expected.
  • One area where the state and local communities could find themselves in direct conflict is the role of a beefed-up Homes England using its dormant new towns powers for land assembly and to grant itself planning for large settlements.
  • In addition, we can expect announcements on measures to speed up the planning process and reduce post approval conditions. This could include a review on substantial changes within the current planning system, for example around assumed development rights and revised guidance on height, tenure mix, affordable housing definitions or density.

All of this will need a lot more money. The adjustment of housing associations out of the public accounts again gives a one-shot multi-billion pound room for manoeuvre for housing. The big question: will it see large central borrowing for a national housing & infrastructure fund to underpin the new muscular state or a huge extension of existing programmes delivered by housebuilders, councils and housing associations.

The runes say that this will be a ‘something for everyone’ budget – that could either be a crowd pleaser or fail to meet expectations that have seen the stakes raised around the £50 billion mark. Certainly, significant new funding in housing and related infrastructure is expected.

Councils

The Councils have made their strongest play for serious investment and a loosening of controls than for many years. In recent days, one reading of Lord Gary Porter’s media rounds suggests that the battle has been in full cry right up to the final clang of the Budget Red Box. Will councils be the victors – with off balance sheet treatment of council funding, billions of pounds of extra investment and extended borrowing and other powers?

What to look out for:

  • More help for those councils who can and are delivering homes and growth with individual deals and extended powers and money for the councils that have housing growth opportunities and that can deliver homes. Perhaps an extended role for Local Enterprise Partnerships too. However, with the tragedy of Grenfell looming large, social care and welfare changes, supported housing, housing market based deprivation and new homelessness laws coming into force, councils may see a more dominant focus on financial support for those areas within their ‘Care & Repair’ responsibilities.
  • The one area where councils may well see a greater housing delivery focus is around new obligations to meet local housing demand. It remains to be seen whether that will be matched by new housing and infrastructure investment and additional powers to allow councils, regions and others to plan, finance and delivery their own local homes and local infrastructure.

Housebuilders

For the housebuilders, this may be a budget of sticks as well as carrots. The Communities Secretary has land banking firmly in his sights.

What to look out for:

  • First and foremost we should expect to see the Government more fully utilising public sector body land. The Land Value capture approach has been tempting Government for many months, but these are not easy ideas to put into practice without causing other market distortions. Even so, it should be expected that a preferred option for capturing more value from the development of public sector land will be announced soon. The thrust of policy is likely to be one of collaborative working across public, private and third sectors together with community engagement for planning, local building trusts and regeneration.
  • In the private sector there are a range of possible policy measures. Some of these include build out directions, planning powers and forms of compulsory acquisition.
  • One effective way to encourage land into use is incentivising the market to use the land more quickly and gain earlier profits from it. This could include tax breaks for purchasers (such as stamp duty holidays), tax breaks for business (such as REITS or large landlords/ investors), short dated additional funding support for infrastructure and off take guarantees for sales or rent.
  • With an industrial strategy focus there is a sharp need to increase skills, Small and Medium Sized (SME) builders, so something around skills, innovation hubs, innovation funds and a step-change in support for manufactured housing are all areas to look out for.

Housing Associations

Housing Associations have had so much praise in recent days from the Government that either there is a great big deal about to be announced or the warmth of the words reflects a view that Housing Associations have what they need to deliver more homes.

Recent days have seen a change in emphasis in the role of the Housing Association not simply as a good manager of homes but as a substantial builder and developer of new homes for rent and for sale. This does indeed go back to the very re-birth of the Housing Associations under Sir Keith Joseph where Housing Associations built housing for low cost ownership as well as houses for rent.

What to look out for:

    • A number of the settlements for Housing Associations have already been announced: rent certainty, extra freedoms and flexibilities, extra affordable housing programme funding. Is there more to come? Probably around supported housing, perhaps on low cost home ownership, shared ownership and rent to buy, perhaps on social rent.
    • But from a Treasury perspective the advantage that the Housing Associations have is that they can leverage their balance sheets using private finance. With the new freedoms and rent certainty, perhaps together with changes of treatment for historic grants, the Housing Associations have a tremendous opportunity to unlock billions extra from their own balance sheets. Perhaps that will be some of the £50 Billion that the Communities Secretary is looking for.

Commenting in advance of the Budget, HFI chief executive Natalie Elphicke said “Housing is a political hot topic. There is an opportunity to capture the public mood and deliver the housing that the public want and need. We can therefore expect housing to dominate the budget, but the tone is vitally important. This budget needs to address ‘care & repair’ issues for housing, such as tower block safety and homelessness, as well as simply building more homes.

“The Chancellor can choose one of six options, or a mix of them. What is clear is that this is an opportunity for the Chancellor to be radical.

“The expectation is that this will be a ‘something for everyone’ housing budget – that could either be a crowd pleaser or fail to meet expectations. The stakes have been raised for housing commitments to be at an all-time high at around the £50 billion mark. With more than £20 billion already committed to housing over this Parliament, it is certain that we should see significant funding commitments for housing and related infrastructure.”

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Skills shortages biting construction sector once more

Workloads in UK Construction and Infrastructure continued to rise in Q3 2017, according to the latest RICS UK Construction and Infrastructure Market Survey, with 22% more respondents seeing a rise in workloads of the quarter, with a steady pace of growth.

However, while activity remains steady, comments left by respondents continue to highlight Brexit-related uncertainties as weighing on investment decisions and the lack of sufficiently skilled workers also remains an obstacle for many businesses.

Shortage of skilled workers

Having eased throughout 2016, the intensification of labour shortages is biting once more in the quarter with 62% of contributors citing this as an impediment to growth. This contrasts with an average of 40% when data collection first began in 2012. Within this, respondents to our survey are still seeing a lack of quantity surveyors (64%) as well as other professionals (52%). 44% are also seeing a shortage of workers within specific trades.

Despite government efforts to bolster the workforce and the prominence of apprentices, through an apprenticeship levy introduced earlier this spring, only 42% of respondents feel that government-funded programmes are moderately effective, with one-third unsure. The quality of the talent pipeline is insufficient as well – less than half (45%) of employers who currently hire apprentices view them as a long-term solution to their hiring needs.

Sector workloads

Breaking the rise in workloads and activity down to a sector level, growth is strongest in the private housing sector, while remaining broadly stable elsewhere. Meanwhile, the public non-housing sector continues to underperform all others. In infrastructure, 21% more contributors reported a rise rather than a fall in workloads. Nationally, respondents expect the rail and energy sub-sectors to post the most significant increases in construction output over the coming 12 months.

Despite uncertainties, a net balance of 45% of respondents expect headline activity to continue to rise rather than fall over the year ahead. Nevertheless, this is down from the four quarters immediately preceding the EU referendum, which averaged 62%, reflecting a somewhat less optimistic outlook. Meanwhile, 30% more contributors expect employment to rise rather than fall (broadly unchanged from Q2).

Other impediments on construction growth

While a shortage of workers is hampering activity and profit margins, financial constraints are still reported to pose the most significant challenge, although the share of contributors expressing this view has come down to 69% (from 79% in Q2). Access to bank finance and credit remains by far the most frequently cited issue, followed by cash flow and liquidity. This likely reflects a more cautious stance by banks given cyclical market conditions and Brexit considerations.

Higher input costs and a shortage of labour continue to restrict growth in profit margins, with a net balance of only +12% of respondents expecting a rise in margins over the coming year. This is likely to have impacted tender pricing as well, with 62% and 56% more respondents in the building and civil engineering areas, respectively, envisaging greater price pressures.

Jeffrey Matsu, RICS Senior Economist said “While activity in the sector has moderated, growth and growth expectations remain in positive territory. Uncertainties due to Brexit continue to weigh on companies’ investment and hiring decisions, and banks appear to be adopting a more cautious stance to providing finance. Meanwhile, challenges related to an inadequate supply of skilled labour are as pronounced as ever.”

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