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£2.5 million cash boost for garden towns

A £2.5 million cash boost to speed up the delivery of over 155,000 new homes across England, has been announced by the Communities Secretary Sajid Javid this month.

Nine locally-led garden town developments, from Bicester to Taunton, will each receive new funding to fast track the build out of these large housing projects.

The new funding will support local authorities and communities in delivering ambitious proposals, speeding up the progress of developments through additional dedicated resources and expertise.

Garden towns being supported by government are committed to delivering high quality, well-planed and well-designed new communities that will stand out as exemplars of good development in years to come.

The funding will support the development of 9 new locally-led garden towns at Bicester, Didcot, Basingstoke, Otterpool Park in Kent, Aylesbury, Taunton, Harlow-Gilston, North Northamptonshire and North Essex.

Communities Secretary Sajid Javid said “Locally-led garden towns have enormous potential to deliver the homes that communities need. This new funding will help support the construction of more than 155,000 homes in 9 places across the country.

“New communities not only deliver homes, but also bring new jobs and facilities and a big boost to local economies.”

The government’s Housing White Paper sets out bold new plans to ensure the housing market works for everyone, so that more people can have the security of a decent place to live.

Across England, government is supporting the locally-led development of 10 garden towns and cities, as well as 14 garden villages – with the combined potential to deliver 220,000 new homes across England.

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£15bn road upgrade plan updated to minimise congestion

Highways England has today updated its £15 billion road improvement programme to reduce the impact of roadworks on motorists and minimise congestion while improvements take place.

Plans for twenty-six road upgrades have been revised to reduce roadworks taking place in the same area of the network or on popular journey routes at the same time. This will mean less congestion for motorists as Highways England embarks on the biggest road upgrade plan for a generation.

The Supplementary Delivery Plan published today will see Highways England rescheduling its programme for the schemes between three and 24 months – meaning a number of schemes will be completed earlier than planned. All are still set for delivery as part of the Government’s first road investment strategy.

Jim O’Sullivan, Highways England Chief Executive said “Our update today is a sensible and responsible way to deliver major national investment in road infrastructure. It will keep our roads moving, deliver a lasting legacy for the country and ensure best value for money for the taxpayer.”

Now, more than two years into delivery of a £15 billion Government investment in motorways and major A roads, Highways England has already completed 18 major schemes, adding more than 190 lane miles of much-needed capacity to the nation’s roads.

The 10 schemes being brought forward are:

  • A19 Testos
  • A19 Downhill Lane
  • M56 junctions 6-8 smart motorway
  • M6 junctions 21a – 26 smart motorway
  • M6 junction 22 upgrade
  • A500 Etruria
  • M6 junction 10
  • M4 Heathrow Slips
  • A47 Acle Straight -small scale improvement
  • A47 and A12 junction enhancement

The 16 schemes being re-scheduled to smooth the timing and frequency of roadworks are:

  • A5 Dodwells to Longshoot widening
  • M3 junction 9 improvement
  • A31 Ringwood
  • M27 junctions 4-11
  • A47 North Tuddenham to Easton
  • A47 Blofield to North Burlingham dualling
  • M25 junction 25 improvement
  • M25 junction 28 improvement
  • A1 Birtley to Coal House
  • M60 junctions 24-27 and junction 1-4 smart motorway
  • A47/A11 Thickthorn
  • A47 Wansford to Sutton
  • A47 Guyhirn Junction
  • A12 Chelmsford to A120 widening
  • M25 junction 10/A3 Wisley interchange
  • M25 junctions 10-16

Highways England is obliged to ensure that investment in the road network delivers good value for money. Following a full review the Road Investment Strategy (RIS) programme some schemes require further development to achieve an acceptable return on investment. As a result, in addition to the 26 schemes above, 6 schemes have been paused for further review and consideration as part of future RIS planning process.

These schemes are:

  • A1 & A19 Technology enhancements
  • M11 junctions 8 to 14 technology upgrade
  • A12 whole-route technology upgrade
  • M53 junctions 5-11 smart motorway
  • A14 Junction 10a
  • M62/ M606 Chain Bar

Two further schemes required rework to achieve value for money; however, changes in local development plans mean that these schemes can be progressed, albeit in the early stages of Road Period 2. These are:

  • M5 Bridgwater junction improvements
  • A50 Uttoxeter Project B growth corridor project
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Sensational bounce back for infrastructure activity

Infrastructure bounced back sensationally in September with six major HS2 contracts awarded on the month worth a total of £7.2 billion. However, the same can’t be said for the remaining sectors in construction, including housing which saw new orders decrease for the first time in six months.

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, highlights the levels of construction contract values awarded in September across all regions of Great Britain. The overall contract value for September was £6.9 billion based on a three month rolling average, the highest monthly figure for almost two years. The strong total was largely based on the commissioning of the large HS2 contracts, which made up six of the top ten biggest projects in the month, whilst also masking the pitfalls across other sectors of construction.

Barbour

Across the industry, project numbers were down in September by 28.5% when compared to August, which was spread right across the various sectors of construction. Housing saw the biggest drop in contract values, decreasing to £1.8 billion, a 33 per cent drop on the month after consistently high growth since May and has up to now been construction’s most reliable source of high contract values over the course of 2017. Outside of Infrastructure, the only two other sectors that saw growth were Hotel, Leisure and Sport with minimal growth of 0.9% compared to August, and Medical & Health which increased by 10.4%.

Outside of the six HS2 projects, the £300 million Old War Office Building residential development in Westminster was the highest value project for September. This is followed by a new Amazon distribution centre in Bristol with a construction cost of more than £200 million – four times higher than the value of any other industrial project on the month.

Regionally, the West Midlands was the leading region for construction contract value with 35 per cent of the total, followed by London and the East Midlands with 28 and 15 per cent respectively, the three regions with HS2 contracts. The remaining regions counted for 1-4 per cent individual share of the monthly total contract value.

Commenting on the figures, Michael Dall, Lead Economist at Barbour ABI, said “It was an unusual month for construction in September due to the £7.2 billion HS2 contracts, drastically boosting construction figures and depicting a strong, healthy industry, whereas without the six major contracts it was a poor month for contract values, highlighted by the housing sectors uncharacteristic decrease.”

“Nevertheless the HS2 projects will be a major boost to the workforces in the three located regions, providing thousands of jobs and sub-contracting opportunities.”

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Call to Government to back infrastructure plan to de-carbonise UK buildings

As the Government prepares to publish its Clean Growth Plan, a major alliance has called for an ambitious new infrastructure programme to help to decarbonise the UK’s buildings and, in the process, boost the economy.

With one-third of UK carbon emissions coming from buildings, the report, “Affordable Warmth, Clean Growth”, recommends a comprehensive Buildings Energy Infrastructure Programme and dedicated delivery agency to achieve major energy savings and de-carbonise the UK heating supply. Prepared by leading consultancy Frontier Economics, it sets out an action plan to make all homes energy efficient within 20 years.

Achieving this goal will require the adoption of world-leading quality standards for retrofitting and constructing homes, area-based schemes led by local authorities, additional funding sources that won’t raise energy bills and financial incentives to encourage households to take up energy-saving measures.

Key recommendations include:

  • A target for all homes to be brought up to an energy performance rating of C (on the A to G scale) by 2035, with all low-income households achieving a C rating by 2030
  • A requirement for new homes to be constructed to a zero-carbon standard by 2020
  • Subsidies for all low-income home-owners to make energy efficiency renovations to their properties
  • A demonstrator programme to test the most attractive schemes to unlock able-to-pay households’ investment in energy saving renovations, including zero interest loans, low interest equity loans you don’t have to pay back until a home is sold and salary sacrifice schemes like those for childcare vouchers
  • Changes to Stamp Duty to encourage renovations when people move home
  • Tax allowances for private landlords and 50% subsidies for social landlords to undertake energy efficiency renovations

It also recommends strengthening regulation in the private rented sector from 2025 to prevent landlords from renting out homes which have below average energy performance, and applying sensible minimum standards when homes are sold to help address health risks and deaths caused by excessive cold. The regulations and minimum standards, properly enforced, can significantly bring down the cost of the programme to the public purse.

There are 19 million homes in the UK with needlessly poor levels of energy performance (below a C rating). Up to a quarter of the energy consumed in homes could be saved cost-effectively, with the technical potential for energy use in homes to be cut in half. Despite this, the level of funding for energy efficiency measures has been cut by 50% since 2012 and the number of major insulation and efficient heating measures being installed has crashed by 80%. The alliance is calling on the Government to reverse that fall and to make buildings’ energy performance a capital infrastructure investment priority.

The Rt Hon. Lord Deben said in support of the report: “This is market failure at its most pernicious and the Government needs to intervene to make the free market work. This is a properly constructed infrastructure programme that provides a cost-effective way of meeting our climate change objectives while significantly reducing the cost of living for a huge proportion of the population”.

Claire Thornhill, an author of the report from Frontier Economics said: “Buildings are an integral part of our energy infrastructure system. If we are to de-carbonise in a cost-effective way and keep energy bills as low as possible we need an integrated and ambitious infrastructure programme to de-carbonise our buildings.”

The Plan would require public investment in household energy efficiency to be increased by £1.1 billion per year – from £0.6 billion today to £1.7 billion. A previous Frontier Economics report that analysed Government data found that an energy efficiency programme achieves comparable economic returns to other infrastructure programmes.

The Government plans to spend £170 billion on housing, economic infrastructure and R&D programmes up until 2021/22. However, buildings energy performance does not yet feature in the Government’s infrastructure plans despite the fact that it would help households to save on average £270 every year off their energy bills, boost the economy and reduce the need for new energy supply infrastructure investment elsewhere. The Building Energy Infrastructure Programme is designed to leverage in £3.9 billion of private investment per year.

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Global standards vital to boosting infrastructure investment

The adoption of regulated internationally recognised standards can increase the UK’s ability to attract private infrastructure investment to offset the fall in public sector spending, according to a new paper which was launched by the RICS at the Labour Party Conference today.

According to the paper, the adoption of regulated internationally recognised standards can increase the UK’s ability to attract private infrastructure investment to offset the fall in public-sector spending.

Launched at the Labour Party conference in Brighton at an event attended by Shadow Housing Minister Tony Lloyd, the paper titled “Attracting Infrastructure Investment Through International Standards” sets out the case for using International Construction Measurement Standards (ICMS) to attract private investment in infrastructure projects.

Successfully enticing investors will play a vital role in Britain to mitigate recent contractions in the construction sector as Brexit discussions continue.

With the UK’s ageing infrastructure currently depleting and at capacity, and public sector investment set to fall from to 1.4%t of GDP by 2020 – from 3.2% in 2010 – the private sector has a critical role to play in updating and delivering new infrastructure.

ICMS is a key tool in managing investments, providing certainty to industry and attracting investment.

Revenue generating projects

The paper also calls on government to take a more proactive role in supporting infrastructure by identifying projects that will generate revenue, providing guarantees to minimise investor risk during the construction phase and providing certainty by seeking cross-party support for projects.

Mo Rahee, RICS Infrastructure Policy Manager said “Like the International Financial Reporting Standard, the International Construction Measurement Standard provides a level of certainty – through transparency – to investors. Effective and accurate reporting of capital expenditure can only benefit the construction sector by providing investors with accurate information that inform their investment decision process.

“Government can also support the sector by identifying projects that will generate long-term revenues and have cross-party support. This will be vital to ensure infrastructure is updated and new projects are delivered.”

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Contracts signed to deliver tunnels, bridges and earthworks for HS2

HS2 has taken a major step forward, with the formal signing of contracts to deliver the tunnels, bridges and earthworks that will carry the first phase of the UK’s new high speed railway from London to Birmingham in 2026.

High Speed Two (HS2) Ltd Chief Executive, Mark Thurston, was joined by representatives from SCS JV, Align JV, CEK JV and Balfour Beatty VINCI, in a signing ceremony at the company’s Birmingham head office. The winning companies, whose names were released by the Department for Transport last month (17 July 2017), will go on to support 16,000 jobs across the UK-wide supply chain as they deliver what will be the biggest investment in UK’s transport infrastructure since the building of the motorways.

High Speed Two (HS2) Ltd Chief Executive, Mark Thurston, was joined by representatives from SCS JV, Align JV, CEK JV and Balfour Beatty VINCI, in a signing ceremony at the company’s Birmingham head office. The winning companies, whose names were released by the Department for Transport last month (17 July 2017), will go on to support 16,000 jobs across the UK-wide supply chain as they deliver what will be the biggest investment in UK’s transport infrastructure since the building of the motorways.

Welcoming the milestone for the project, HS2 Chief Executive Mark Thurston said “HS2 is more than just a railway. The contracts will provide much needed extra capacity and connectivity between our major cities, but it will also unlock huge opportunities for new jobs, homes and economic development and start to rebalance our economy.

“We are determined to deliver the project to new levels of safety and efficiency, with respect for communities, protection for the environment and value for money at the core of everything we do. The contracts we signed today will support 16,000 jobs and generate thousands of contract opportunities within the wider supply chain, spreading the benefits of this investment across the whole country.”

A team made up of Skanska, Costain and STRABAG (SCS JV) will build the first section of the route which is in a tunnel between Euston and Old Oak Common and onwards to Northolt. Welcoming the contract award, Peter Jones, Executive Director and SCS JV board member said “We are delighted to have been awarded these major contracts by HS2 which follow on from the South Enabling Works Contract awarded last year.

The awards are further testimony to the SCS collaborative approach and our strong track record in applying technology-based innovative solutions in the delivery of large-scale projects.

Align JV, a team made up of Bouygues, VolkerFitzpatrick and Sir Robert McAlpine will build the next stage, including the Colne Valley Viaduct and Chilterns Tunnel. Welcoming the contract award, Jérôme Furgé, Align Project Director said “I have worked on many major projects around the world, and find it a special privilege to be working on HS2. This project will require a unique level of collaboration between all of us and the highest industry standards, expected by HS2, will be implemented in order to obtain the very best outcome. My Align colleagues and I are delighted to be part of the challenge to deliver a world-class asset to the UK.

The largely rural stages between the Chilterns Tunnel and Long Itchington will be built by a team made up of Carillion, Eiffage and Kier (CEK JV). Welcoming the contract award, Sean Jeffery, Executive Director and Chairman of CEK JV Board said “We are delighted to have been selected to help deliver this major infrastructure project and look forward to working in partnership with HS2. Our involvement in this project will enable us to create many new jobs and training opportunities as well as working with a diverse range of supply chain businesses from across the UK.”

A team made up of Balfour Beatty and VINCI will complete the route, taking the line north past Birmingham Airport and into the new Curzon Street station in the centre of Birmingham, as well as onward to a connection with the existing West Coast Mainline at Handsacre. Welcoming the contract award, Mark Cutler, Balfour Beatty VINCI HS2 Managing Director, said “I am proud that our long-standing joint venture has been chosen to deliver these two important and complex sections of HS2.

“This iconic rail infrastructure project will create significant opportunities for the UK construction industry and enable long term benefits in skills, jobs and regional prosperity. We look forward to building on our successful track record of major infrastructure projects, and playing our part in the delivery of HS2.”

The contracts are two-stage, with the contractors spending the first 16 months working collaboratively with HS2 Ltd on the detailed design before construction begins around 2018/19. Preparatory work has already begun on the project with geological investigation underway across the route and ecological and archaeological work due to begin soon.

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Concerns that HS2 will not deliver on UK’s wider economic brief and on budget

Last week the government awarded £6.6bn in contracts to build the new high-speed HS2 railway between London and Birmingham, to companies including crisis-ridden construction firm Carillion.

Construction work is due to begin next year on new stations, tunnels, embankments and viaducts on the London to Birmingham line, which forms the first phase of the controversial HS2 project. The civil engineering alone is expected to create 16,000 jobs.

It was welcomed as a “shot in the arm for Brexit Britain, providing thousands of jobs and billions investment that helps close the north-south divide,” but is that really the case?

According to CMF Capital’s John Mulheron, perhaps more worrying is the budget to deliver and whether it will support the vision of wider UK growth and prosperity. “The figures are eye-watering and the debate on whether HS2 is value for money a hot topic. Back in January 2012 £32.7bn was set aside for the total project. That figure now stands at £55.7bn.”

“Opponents have warned that the government is underestimating the costs, and that construction has already been delayed. The overall budget was revised up, but estimates drawn up on behalf of Lord Berkeley, chairman of the Rail Freight Group, suggested it could be as high as £111bn which would be a serious overspend and bring into question its value for money.” Commented Mulheron.

Lord Berkeley’s calculation was produced by Michael Byng, an expert for the Department of Transport who devised the standard method used for Network Rail to cost projects. It essentially works out to £403m a mile to build, which is 15 times the ‘cost per mile’ compared to the latest French TGV project extension. The stretch from London Euston to Old Oak Common has escalated to £8.25bn alone.

Whilst that figure was dismissed as nonsense, it’s worth pointing out the Chris Grayling’s submitted budget doesn’t include trains – about £7bn of new ‘state of the art’ rolling stock is needed. With the Government’s focus on Brexit negotiations, the fall-out from Grenfell and the fall-outs within the cabinet, it seems wise to urgently assign a few more bean counters to Grayling’s team for a little more diligence. Diligence to date has cost about £2bn in planning fee’s alone – nice work if you can get it.

So, what are the reasons for the spiralling costs? “The UK is densely populated with high degrees of home ownership (for those over 35 years old) and a high use of the railway infrastructure. All of which makes the price of land and the cost of disruption very expensive. If this was China or Russia the bulldozers would simply pile through. Fortunately, here people have rights and they are prepared to dig their heels in over them, this is likely to slow progress even further.” Said the CMF Capital Managing Director.

Whilst HS2 will create direct engineering and construction jobs, it will also impact employment in the short term. As homes get demolished local business communities that relied on their weekly spend will go under. In a poll, back in November last year an overwhelming 77% of the public would prefer the billions being spent on HS2 to go to the NHS and public services. No doubt given the latest crime figures that percentage might be a touch higher.

Looking at the proposed phase 2 routes also unveiled this week, the obvious omission is there is still no plan to join Manchester to Leeds or Leeds to the North East. The M62 is a daily carpark and the rail network linking these key cities frankly embarrassing.

Transport for the North, the body set up to deliver new infrastructure argues that by just improving transport connections across the Pennines – halving the Leeds to Manchester journey to 30mins – it would bring greater economic benefit than the high-speed link to London ever could. A five-fold boost to rail travel by 2050 could add £100bn to the region’s economy and create 850,000 new jobs.

“The other ongoing argument is that whilst HS2 will increase capacity to our current creaking Victorian network, it will simply make it quicker to travel to London and not benefit the northern powerhouse regions. That phrase that has all but disappeared from Tory manifestos since George Osbourne was told to get a new handful of jobs.” Commented Mulheron.

With businesses scrambling to promote themselves to a wider global audience in the wake of Brexit, it’s no wonder the north of England, with a GDP of £350bn – equivalent to the 21st largest economy in the world and exports 19% of the UK total continually feels like London’s second cousin twice removed. Expanding Heathrow at vast cost is another example of a London centric approach to growth and there are no plans for HS2 to link up to the airport.

Whilst the phrase Northern Powerhouse might have died, the region’s revival goes on. Aerospace, manufacturing, engineering and digital industries are growing at pace. The regional purchasing managers’ surveys show growth faster than the national average. But it’s still not shifting the ‘productivity needle’. Which, is what ministers and economists are pinning on HS2 to help solve.

“As ever, there is no one silver bullet and we need more immediate solutions than a project set to take decades to complete. Currently, not a single metre of track has been laid. To compete in a global economy the region needs to take advantage of new trading opportunities beyond Europe. There is capacity at Manchester and Leeds airports, so opening new trans-Atlantic or Asian routes would send an instant signal that we’re open to business across the country.” Concluded Mulheron.

The news that HS2 is progressing should be met with gentle applause, but more needs to be done in the short term to build confidence that in turn fuels investment. One final point to note, HS2’s announcement coincided with Elon Musk receiving verbal approval from the US Government to take his Hyperloop concept to the next stage.

Journey times from Washington to New York City would be around 29mins. Edinburgh to London, phase one of his European ‘Hyperloop One’ would be about 50mins of travel. Given the pace at which HS2 is likely to progress, Musk might still beat us to the ticket barriers.

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Winners of £6.6bn construction contracts for HS2 Phase One announced

The winners of the major construction contracts for Britain’s new railway were announced today (17 July 2017), with the £6.6 billion contracts supporting 16,000 jobs across the country.

16,000 jobs will be supported through contract opportunities over the next 6 years.

The huge infrastructure investment covers the main civil engineering work on the first phase of HS2 between London and Birmingham – including construction of tunnels, bridges, embankments and viaducts.

Transport Secretary Chris Grayling announced the decision to award contracts today, which will mean the new high speed link reaching Birmingham by 2026.

Transport Secretary Chris Grayling said “This is a hugely important step in the construction of Britain’s new railway and underlines this government’s determination to deliver an economy that works for all.

“HS2 will deliver vital links between some of our country’s biggest cities, helping to drive economic growth and productivity in the north and midlands.

“As well as providing desperately needed new seats and better connecting our major cities, HS2 will help rebalance our economy.

“We will now get on with building the railway, while continuing to ensure affected communities get appropriate support and are treated with fairness, compassion and respect.”

David Higgins, Chairman of HS2 Ltd, added “This is a huge day for the HS2 project and for the country. These contracts will support 16,000 jobs here in Britain and will create opportunities for thousands of SMEs.

“HS2 was always designed to be much more than just a high speed railway and today we can see the opportunities it brings right around the country – spreading prosperity, acting as a catalyst for investment and rebalancing our economy 10 years before the railway even opens. Business now has the surety to invest with confidence to build a legacy for Britain.”

HS2 could carry more than 300,000 people a day. And with fast trains using the new line, there will be extra space for more trains on the existing rail network.

Benefits will be felt across the network with trains running as far as Scotland and the number of seats available out of Euston in peak hours more than doubled.

In total, construction of the full HS2 route to the north-west and Yorkshire will create up to 25,000 jobs and 2,000 apprenticeships. Another 3,000 people will operate HS2 and it is estimated that growth around new HS2 stations will create another 100,000 jobs.

2,000 apprenticeships will be created.

In February, Parliament granted powers to construct the Phase One route from London Euston to Birmingham, with the route opening in 2026.

The winning bidders to build the first phase of the route are:

Area South

Euston Tunnels and Approaches – SCS JV (Skanska Construction UK Ltd, Costain Ltd, STRABAG AG)
Northolt Tunnels – SCS JV (Skanska Construction UK Ltd, Costain Ltd, STRABAG AG)

Area Central

Chiltern Tunnels and Colne Valley Viaduct – Align JV (Bouygues Travaux Publics, VolkerFitzpatrick, Sir Robert McAlpine)
North Portal Chiltern Tunnels to Brackley – CEK JV (Carillion Construction Ltd, Eiffage Genie Civil SA, Kier Infrastructure and Overseas Ltd)
Brackley to South Portal of Long Itchington Wood Green Tunnel – CEK JV (Carillion Construction Ltd, Eiffage Genie Civil SA, Kier Infrastructure and Overseas Ltd)

Area North

Long Itchington Wood Green Tunnel to Delta Junction and Birmingham Spur – BBV JV (Balfour Beatty Group Ltd, VINCI Construction Grands Projets, VINCI Construction UK Ltd, VINCI Construction Terrassement)
Delta Junction to WCML Tie-In – BBV JV (Balfour Beatty Group Ltd, VINCI Construction Grands Projets, VINCI Construction UK Ltd, VINCI Construction Terrassement)
Preparatory works are already underway, with main construction work starting in 2018/19 following a period of detailed design work.

In addition, HS2 stations at Euston, Old Oak Common and in Birmingham will be central to HS2 and the work needed to develop designs is also well underway. Both the invitations to tender (ITTs) for the station design services contracts for all 4 Phase One stations and the invitation to participate in dialogue (ITPD) for the Euston Master Development Partner have been released to shortlisted bidders.

These are significant milestones which show how progress is continuing to deliver stations that will be embraced by the local communities, drive economic growth and provide seamless journeys for passengers.

The Transport Secretary will today publish a Bill to deliver the next phase of HS2, from the West Midlands to the West Coast Main Line south of Crewe.

This means – subject to Parliamentary approval – this part of the route can open in 2027, 6 years earlier than planned, to bring the benefits of HS2 to the north and Scotland sooner.

The Transport Secretary will also confirm the final Phase 2b route, from Crewe to Manchester and Birmingham to the East Midlands and Leeds. This phase will complete HS2 and unlock the transformative project’s full benefits for the country.

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Queen’s speech: industry reaction

There was much food for thought in the Queen’s speech, which took place today. Touching on key areas of our sector, on subjects such as housing skills, energy and infrastructure, the speech piqued the interest of construction professionals throughout. Buildingspecifier takes a look at what industry experts have to say in response:

Skills

The Government’s Immigration Bill must ensure that British business has access to sufficient levels of EU workers or major construction projects will grind to a halt, the Federation of Master Builders (FMB) has said in response to the Queen’s Speech.

Brian Berry, Chief Executive of the FMB, said “In terms of today’s Queen’s Speech and the focus of British business, all eyes are on the Immigration Bill. As suspected, we now know that the Bill will end the free movement of people but that begs the question: what will replace it? The Government has not set out what our post-Brexit immigration system will look like but it is crucial that key strategic industries, such as construction, are able to draw upon sufficient numbers of EU workers. EU tradespeople have come to play a crucial part in plugging the industry’s chronic skills gap and if the ability to employ non-UK workers is curtailed, the Government’s housing and infrastructure plans will be no more than a pipe dream.”

“Already, we’re starting to see a dramatic drop off in immigration from the kinds of countries that have typically supplied the construction sector with skilled talent. Statistics released today by Oxford University’s Migration Observatory show a 35% fall in the number of national insurance numbers being issued to nationals from the ‘EU8’ countries that joined the EU in 2004. A lack of certainty over what rights EU citizens will have in the country post-Brexit will undoubtedly be a factor behind this decline. Given the ongoing need to recruit from abroad, we need a clear message from the Government that non-UK skilled workers are welcome now, and will be welcome come what May.”

“The sector stands ready to work with MPs to shape the Immigration Bill into something that serves the economy and provides vital human resource to British business. The construction industry is also ready to significantly upscale the training and recruitment of UK construction workers so we welcome the recommitment to a proper industrial strategy and high skilled learning. In the longer term, being able to train more of our own workforce is without question part of the solution to our enduring skills deficit. Nevertheless, the Government must be pragmatic and introduce an immigration flexible system that allows skilled EU nationals to work in the UK with relative ease.”

Energy

Responding to the Queen’s Speech, RenewableUK’s Executive Director Emma Pinchbeck said “We welcome the Government’s commitment to a new modern Industrial Strategy. Wind, wave and tidal energy are new industries which are already creating highly-skilled, high-paid jobs, exporting around the world. Renewables can and should be the engine room of the Government’s flagship Industrial Strategy, driving our low-carbon economy.

“The need to reduce energy bills for consumers was also rightly highlighted in the Queen’s Speech. Renewable energy technologies are making record-breaking cost reductions, and clean energy tariffs are now competing with traditional low-cost tariffs to provide consumers with lower bills – we should continue this trend.

“It was important that the Government reaffirmed its strong support for action on climate change, including the implementation of the Paris Agreement. President Trump’s decision to turn his back on this has been greeted with bafflement and incomprehension in the US energy sector, as the global renewable energy market is worth $290 billion a year. The UK Government is showing leadership on energy policy and environmental issues which matter to the majority of the British public”.

Housing

Responding to today’s Queen’s Speech, Chartered Institute of Housing chief executive Terrie Alafat CBE said “We need an ambitious, long-term plan to tackle our housing crisis so it is encouraging to hear the government’s commitment to get more homes built and to bring forward the measures outlined in its housing white paper.

“But it’s not just about building more homes, it’s about building more affordable homes for people on lower incomes. We believe more investment is urgently needed in genuinely affordable homes to rent. Figures released this week revealed that the number of homes for social rent built with government funding dropped by 51 per cent in 2016/17. One of the new government’s priorities should be rebalancing the housing budget – affordable housing currently accounts for just 16 per cent of total direct investment.”

She added “CIH has been calling for a ban on letting agent fees so it’s good to see draft legislation being brought forward to tackle this issue.”

Terrie Alafat said the continuing uncertainty over the future funding of supported housing risks undermining government moves to provide appropriate services for our ageing population. She said “We are still waiting for the consultation on the government’s proposal to extend the Local Housing Allowance cap to supported housing, which is designed for people who need extra support, such as older people or people with a mental or physical disability. It’s absolutely vital that the government moves quickly on this issue. Supported housing schemes provide homes for some of the most vulnerable people in our society, and our ageing population means that demand is only increasing. We know that many supported housing providers will have put sites on hold while we wait for a decision on future funding and continuing uncertainty could be very damaging.”

Infrastructure

Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction comments “This is a critical investment that will enable Britain to build the infrastructure needed to rebalance our country’s economic wealth.

“Today’s announcement connects more of our major cities to a high speed rail network, and takes us a step closer to creating a Northern Powerhouse.

“The commitment recognises the dismal state of links between the heart of the UK and its Northern cities today. This should finally turn the tide and help the North regain its historic prominence in the UK economy.

“Government, local political and business leaders now need to come together and develop the connectivity that HS2 offers into an overall vision for the development of the North.
“The objective is clear – a vibrant, successful and integrated northern economy that our children will be proud to inherit. Today’s announcement brings us an important step closer to that.”

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New survey highlights issues and opinions in the construction industry today

UK Construction Week, the UK’s largest gathering and community of construction professionals, has conducted a survey to uncover and tackle issues facing construction, housebuilding and skills in the run up to the General Election. With over 1,000 responses from a cross section of professionals working in the sector, key points from the survey include:

  • Sir Richard Branson is named as ‘the best person’ to head up new UK infrastructure projects
  • 77% believe state intervention is needed for more housing
  • 38% want Gavin Barwell to retain his position as Housing Minister
  • 54% call for more housebuilding on brownfield sites

One of the most significant results from the survey was for Sir Richard Branson, who was voted as the best person to spearhead new UK infrastructure projects, such as HS2 and Heathrow Airport, signalling a need for more entrepreneurial vision in tackling large scale projects.

On the result, Sir Richard Branson said “I’m very flattered by the survey. The only danger is that if I oversaw these key infrastructure projects then by the time I’ve finished there would only be room for one airline and one train company, both beginning with the letter V! The key thing one needs to get right is to plan these major projects with the customer’s needs in mind. Too often these are planned by engineers for engineers and fail to meet the user’s demand. This means they are underused and fail to have the major impact they should do.”

Further results show a three way split on the government’s current housing policy with a third of those polled voting both for and against current policies, and a third not convinced either way.

Over half of those surveyed (54%) called for the next elected government to be more aggressive with planning permissions on brownfield sites to enable house building. Only 11% voted to loosen Green Belt restrictions, dispelling the myth that the construction industry wants to build on protected land.

Although the industry isn’t wholly satisfied with current housing policy, Gavin Barwell was voted overwhelmingly in favour as the best man for the job of Housing Minister, with the next name suggested, Boris Johnson, only receiving a quarter of the number of nominations. Labour’s John Healey, previous Housing Minister under the Labour government, was the third suggestion.
77% of those surveyed believe the only way to reach 1 million homes by 2020 is by state intervention, and for a council house building programme to begin.

For infrastructure, there was a two way split between Vince Cable and Sir Richard Branson who were both voted as the best people to lead UK infrastructure projects, followed by Sir Alan Sugar and Sir James Dyson. A clear indication the industry feels it needs entrepreneurial visionaries to successfully take projects forward to 2021.

In terms of major projects the industry is generally positive about these going ahead with a Conservative government, with HS2 and Heathrow seen as the safest projects followed by Hinkley point, Crossrail 2, Thames Tideway and the road renewal building programme.

However, there is a real concern that major projects will stall if the Conservative government is not re-elected, with a majority of those surveyed believing all projects will stall with HS2 coming out on top (44%) followed by Crossrail 2 (40%) followed by the road renewal building programme (40%), Hinkley Point (30%), Thames Tideway (30%) and Heathrow third runway (26%).

Nathan Garnett, Event Director at Media 10, which runs UKCW, said: “We have seen a great deal of talk around housing and infrastructure in this general election campaign so far, so I think that the main political parties should take note of this industry wide survey. It shows that there are still a lot more assurances and interventions needed to build the homes we need and the infrastructure we have been promised. We will be using these results to make sure the main political parties know what the industry wants, and one clear message is that innovation and entrepreneurial endeavour cannot happen without government assistance.”

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