Digital Evolution of the Construction Ecosystem

Nick Sacke is Head of IoT and Products, at Comms365  in this feature for Construction Online he discusses the evolution of the construction ecosystem.

Innovations in digital technology are fostering change and unlocking significant potential improvements in operational processes for the construction industry across the globe. At every level, from the conceptual design all the way through to the physical construction and continued upkeep of the building, new digital devices, applications and methodologies are starting to prove their worth. Yet, IT investment within the construction industry has typically lagged far behind other industries, with less than one per cent of revenues being spent on IT compared to more than four per cent being invested by the automotive sector.

Some of the most forward thinking organisations are seeing the full value and opportunities that investing in innovative digital technology can provide from day one, and are leading the way in revolutionising how construction sites operate. However, for many, some of the most basic requirements of running a site are still a challenge – such as gaining access to high speed, reliable internet networks to support people, applications, devices and processes, wherever the site may be located. The entire industry should therefore look to embrace new technology that provides demonstrable operational benefit, but also ensure that all sites have access to portable, high quality internet connectivity to keep pace with growing user demand, retain profitability, and to expand digitalisation in the construction site. Let’s take a look at some of the leading innovations that may help to run the construction sites of tomorrow?

Advances in surveying

One particular issue that often causes construction projects to be delayed is when undetected geological elements are discovered that were not initially picked up by the ground survey. Not only does this delay the project in terms of time, but can also be one of the primary reasons that causes projects to go over budget. With new photographic and geographic information systems integrated into affordable drones and unmanned-aerial-vehicle (UAV) technology, surveying accuracy and speed has been drastically improved, coupled with easier access to areas that historically were inaccessible. For example, light-detection-and-ranging (lidar) combined with ground-penetrating radar and GPS positioning provides additional data allowing for more detailed surveying of above and below groundwork before construction begins. Digital data from the drone is typically captured onto a memory card and this is then sent via courier to a facility where the data can be uploaded and manipulated by software into usable information. With a high quality internet connection at site, there is now the possibility of patching the drone’s data directly from the site to Amazon Web Services data storage and application hosting servers (AWS), cutting down the time to generate the report.

Building information modelling and augmented reality

5-D building information modelling allows for a project to be fully designed in principle, before building work starts. This process provides a platform to analyse the planned design in detail, as well as record and measure any potential changes to the design or scheduling, taking costs and timings into consideration as well as the parameters of the building in three dimensions. Not only does this provide a cost effective and efficient way to measure alterations to the design, it can also predict and show any possible issues with the construction and give attention to areas that need particular focus for safety aspects.

Although the use of this technology is only set to grow within the industry, human intervention will always be necessary to ensure that the information modelling is reflective of reality. Furthermore, with the use of IoT technology collating vast volumes of data from deployed sensors, together with human insight this results in a model that is not only incredibly powerful, but also reliable and crucially – scalable.

Augmented Reality (AR) software can also be used to enhance the 5-D model through the use of wearable technology and mobile devices. Through digitally mapping out the environment, content can be pinned and projected through holograms, which can be additionally accessed and updated by use of voice commands. For instance, AR could be used to position holographic markings displaying warnings and awareness of an electrical conduit which is positioned behind a wall, to caution and inform engineers that would be accessing this area of the building in the future.

At the site level, high quality wireless networks are required to provide access to site mobile devices, wearable technology and workstations to gather the mapping data and send it to artificial intelligence resources for analysis and update – in real time. This delivers a highly dynamic, up to date, and efficient planning process, with information all digitised and available for use by multiple internal and external stakeholders.

Enhanced efficiency through collaboration and mobility

Construction is an industry that remains profoundly dependent on paper-based and manual processes that are inherently inefficient and prone to error. Large scale projects in particular, typically take 20 percent longer to finish and can be up to 80 percent over budget with traditional methods.

The adoption of digital-collaboration solutions is already significantly improving processes in the industry, positively impacting supply-chain orders and progress reports. Cloud-based software as a service application have risen in popularity as a result of the availability of lower cost wireless connectivity and ensures the efficiency and mobility of the construction team.

Collaboration and mobility at construction sites also requires high quality wireless networks, with the ability to separate the traffic from different groups: in-house employees, contractors, and other site visitors.

An interesting example of an end-to-end digital collaboration project is that of a five billion dollar rail project that was able to save more than 110 million dollars and significantly increase productivity by using automated workflows, review and approval. What this demonstrates is that deploying technology throughout the entire construction process is essential. IoT is also a significant component of this shift, which through machine learning is able to enrich data and make rules-based changes in a highly automated way to systems with little supervision, proving a valuable contributor to project efficiency. Examples of this include tracking assets, controlling costs and minimising equipment downtime, thereby unlocking additional productivity.

The ‘Elephants in the Room’: Risk Sharing and Change Management

Risk management remains one of the largest components that determines the final cost of any construction project. With companies starting to become part of joint ventures, where risk allocation is recognised and managed, there is a level of transparency that allows for a fair share of risk and success for all parties involved. This includes the results of technological innovation such as access to real-time data and cost control.

Moreover, in order to fully realise the benefits that come from the digitalisation of construction, the importance of these changes needs to be clearly communicated by top management and continually managed. Change management will enable organisations to have clear direction of where these new innovations will take the organisation, and what impact they will make. Without this component, there is the potential of pushbacks, which may lead to a fall in productivity and negatively impact success.

‘Carpe diem’: the choice facing construction firms

Digitalisation of the global economy and every industry in it is underway but some industries have made more progress than others. In the Construction industry, there are promising signs of activity and engagement with digital technology and opportunities to leverage its transformative power and scale to positively impact sites, people and operational processes. To effectively deploy digitalisation at sites, the basic requirement of high quality, rapidly deployed, portable and reliable internet networks to support applications and collaborative processes is a must, which needs to be taken care of first, not last. Firms should work with an ecosystem of experienced and trusted providers who can supply the connectivity and IoT services required by sites. The potential rewards to firms that ‘seize the digitalisation day’ will be instantaneous.

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Highways England Unveil Plan

A new multi-million-pound scheme, to tackle congestion and unlock thousands of new homes is Swindon, is set to get underway next month.

Highways England has teamed up with Swindon Borough Council, Swindon and Wiltshire Local Enterprise Partnership (SWLEP), as well as developers Persimmon and Redrow to deliver extra lanes at M4 Junction 15 and to improve local road access from the motorway.

The £17.5 million programme, which will last a year, starts on August 10^th, 2020 and aims to improve journey times and reliability for motorists by tackling congestion at the busy M4 junction and on the A419, especially at peak times in the area.

Highways England’s Growth and Housing Fund has helped support economic growth, facilitate employment opportunities, and enable housing development throughout the country. £5 million is also being invested in the junction upgrade, which is jointly funded by Swindon Borough Council, SWLEP, and Persimmon and Redrow.

This upgrade follows the start of two major Swindon Borough Council schemes; the Wichelstowe underpass project further South near M4 Junction 16 and the improvement work at the White Hart Junction, which is a vital link between the A419 and the A420.

The M4 junction 15 programme of work will involve:

• Widening of the A419 southbound approach to M4 J15 Commonhead Roundabout from 2 to 3 lanes, with a dedicated left lane for London-bound traffic;
• Widening of the A419 northbound exit from M4 J15 to 3 lanes up to the Highways England compound entrance, and back to 2 lanes north of the compound exit;
• Widening of the A346 to the south of M4 Junction 15 from 1 to 2 lanes; and from 2 to 3 lanes on the immediate approach to the roundabout;
• Widening of the M4 J15 eastbound exit slip road from 2 to 3 lanes;
• Lengthening of the 3-lane M4 J15 westbound exit slip road;
• Widening of the M4 J15 southern circulatory carriageway from 2 to 4 lanes;
• Upgrading existing footpaths and installing a new signalised pedestrian crossing over the M4 Junction 15 westbound entry slip road.

Mark Fox, South West Head of Scheme Delivery for Highways England, said: “Our roads are vital for the country and its economic success – they connect businesses and communities and support employment and new homes. All of our improvements will ultimately ensure our roads continue to improve journeys and unlock the potential for new jobs and homes.”

During the scheme, embankments will be cleared and remodelled, and the Day House Lane road, although closed to vehicles, will remain open for non-motorised users.

Throughout the project, any work requiring overnight closures and traffic management arrangements will be communicated in advance.

Councillor Gary Sumner, Swindon Borough Council’s Cabinet Member for Strategic Infrastructure, Transport and Planning, said: “Anyone who has sat in the tailbacks at Junction 15 of the M4 at peak periods knows just why these improvements are needed.

“I am pleased this vital work is about to start as it will relieve congestion on what is a notoriously busy bottleneck. This is a further of example of the Council investing in the Borough’s road network to benefit both local residents and the wider Swindon economy.”

Paddy Bradley, CEO of the Swindon and Wiltshire Local Enterprise Partnership, said: “The scheme represents our continued commitment to local businesses and residents and the works will help ensure the economic growth of Swindon and the wider region is not hindered by traffic congestion and unreliable journey times.

“The collaboration between partners to bring together the necessary funding will lead to the improvement of major routes around Swindon to keep pace with the future development of the New Eastern Villages.”

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Next Generation of Skilled Construction Workers

Glen Hampson is Business Development Manager, Construction at Kubota UK in this feature for Construction Online he speaks about building the next generation of skilled construction workers.

Despite it being one of the largest sectors of the UK’s economy – and employing 9% of the population – the construction industry is currently under a lot of strain. With political events – such as Brexit, cultural changes – such as a renewed focus on higher education, and of course the current pandemic taking its toll, fewer and fewer talented individuals are finding themselves attracted to a career in construction.

Recent research discovered that only one in ten children between the ages of 16 and 18 would consider joining the industry, fearing that it would be ‘challenging and unexciting’. It’s clear that UK constrction needs an urgent revamp in order to survive.

Unless steps are taken now to combat the ongoing skills shortage, the industry – and therefore the UK’s economy – is likely to be impacted well into the future.

Weathering the COVID-19 storm

The ongoing COVID-19 crisis has shone a spotlight on the construction industry in recent months. Whilst the sector initially faced uncertainty, as sites closed and some employees were put on furlough, it has now become a crucial part of the government’s recovery plan.

In a statement last month, Prime Minister Boris Johnson pledged an immediate £5bn package of capital investment in infrastructure projects – including the building of new hospitals, schools and roads. Titled ‘Project Speed’, this initiative highlights the important role that construction is set to play in helping the nation recover from the impact of the crisis and reviving the UK’s economy moving forward.

But, whilst many in the industry view this as a positive step in the right direction, some critics of the scheme have highlighted that in order to fulfil its promise there will need to be a bigger recruitment push than ever before.

Laying the educational foundation

Last year, the Civil Engineering Contractors Association’s chief executive Alasdair Reisner, called for the industry and the government to work together to boost recruitment and training in the UK’s construction sector. This is something that rings even more true today, in our COVID-19 climate. If companies working across the sector are able to provide the schemes and the experience needed to excel in a career in construction, and if the government is able to support them in doing this, the skills shortage will no doubt, reduce.

Programmes and apprenticeship schemes that offer real hands on experience and placements within the wider industry must be encouraged and supported. Only 694 construction, planning and the built environment apprenticeships were started in March 2019, which is a reduction by almost half compared to the previous year. It’s essential that we try and increase this figure moving forward.

For many, an apprenticeship scheme will act as an introduction to the industry and showcase how beneficial a career in construction could be. For example, the majority of school-leavers, wrongly, assume that construction work is simply made up of traditional practices and methods. They are often more attracted to pursuing a career in technology.

But the reality is that modern technologies such as AI, virtual reality and even 3D printing are increasingly becoming a part of the construction industry. Although they’re not commonplace just yet, each apprenticeship scheme should try and expose its students to some aspect of the latest technological advancements being utilised within the industry, to showcase just what the future might hold. This will make it a more exciting, attractive career prospect for both junior talent as well as those looking to move from another industry.

A new positive image

As well as offering the latest apprenticeships and training opportunities, those within the industry need to change the perception of construction work at a wider scale. The benefits of a career in construction are clear, but they also need to be shouted about.

It’s a highly valued sector within the wider UK economy – even more so, given its new standing in the COVID-19 recovery plan. There is no shortage of jobs and there is a huge potential for professional growth. In fact, for specialist roles – such as operators – the pay is extremely competitive. Add to this that transferable skills from a wide range of other backgrounds are welcome and it’s easy to see that construction could be a really fulfilling profession that will last a lifetime.

But government and construction businesses need to ensure that these positive messages are being heard by potential talent. In order to do this, uncertainty in the industry must be reduced. Part of this means offering more protection to workers – perhaps through the reduction of zero-hour contracts or paid apprenticeships. It is only then that old perceptions can be shattered and the true potential of a career in construction can shine through.

Inspiring the next generation

Every industry needs new talent to innovate and survive. As the construction sector strives to boost productivity and drive growth to recover from the recent crisis, attracting new workers will be vital.

Each and every one of us operating within the industry has a responsibility to plug the skills gap and inspire the next generation. The government must provide backing at an educational level and also promote the industry through investment in infrastructure projects. Construction businesses must invest in apprenticeship schemes and continue to train their employees in the latest technological advancements. Individually, we must all work together to transform the traditional image of construction as an outdated industry.

We’re currently experiencing turbulent times but, with the construction industry set to play a key role in the country’s economic recovery, there has never been a better time to close the skills gap. By taking action now we can look forward to a brighter future.

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What ONS Figures Mean for UK Construction

Chris Jones, Industrial Consultant for Odgers Interim, discusses what the latest ONS figures from May this year reveal on the current and future state of the construction industry.

The May 2020 ONS figures certainly make for some startling reading; one headline statistic shows construction output falling some 29.8% in the three months leading up to May. However, there are also signs of the green shoots of recovery emerging. We can take the record margin growth of 8.2% in construction output in the month of May, for example, as an indication that the construction landscape is stabilising and even on an upwards trajectory.

The record falls earlier in the year did not come as a huge surprise given the shock of the initial total lockdown and the inevitable collapse in demand across the sector. Later figures have shown that in the month of June, there has been a record number of insolvencies in the sector. These have largely been for small and medium sized businesses who have been managing tighter margins and smaller cash reserves by and large. But it also shows how vulnerability and sensitivity still remain in the market, exasperated by the shocks of COVID-19. However, this can be justified as fall-out from the short-term response effort of the industry as companies were trying to find their feet and address the initial crisis.

Now, as many major companies are re-emerging, we have started to see significant projects resume and new opportunities arise. I think it is safe to say we can expect these figures to improve through the summer as demand picks back up and social distancing measures are eased further. The sector has also been buoyed by the recent ‘new deal’ announcement from the Government – an extra £5bn of funding on the table will certainly support the sector’s recuperation.

Although the disruption will have been hugely damaging financially, many companies were quick to react, demonstrating high levels of agility. The low period of construction activity was used as time for business transformation. Over the past few months, we have seen a great number of accelerated digital transformations, whether plans were in the pipelines or emerged as a reactionary measure. A prime example of this was the residential building companies. This sub-sector of the industry was one of the strongest performing in June. Such a success was aided by the easing of lockdown measures, but should no less be attributed to their quick adaptation to change. Many companies seamlessly shifted their customer proposition from onsite physical viewings, sales and marketing to online efforts. Initiatives like these will ensure the construction industry is not only better equipped to cope in the short term, but will revolutionise businesses to be better prepared for the future and further disruption.

A point worth considering is that the ONS figures do not take into account the wider biosphere of construction; reporting on the activity of architects, designers, engineers and manufacturers of building products is not included in the figures. Looking outside of this information to consider a wider picture of the market, we can see indication of manufacturers receiving some compensation from the rise of a DIY trend during lockdown. Homeowners took to home improvement which will have enabled manufacturers to pick up some of the slack resulting from the initial downturn in the professional sector. Looking to the UK Purchasing Managers Index for June for further information, we can see reporting of a positive trend represented in their finding of rapid expansion in activity, the most since December 2015. Exploring this more critically, we can interpret this positivity and hope for a rapid recovery as a result of the completion of work that was stalled at lockdown. Yet, there is still great ambiguity in what the pipeline of work for quarters three, four and beyond might consist of.

Looking at this future landscape for the industry, all discussions have to be considered in the context of Brexit – a topic almost forgotten over the past few months during the height of the pandemic. With an agreement still not signed, January 1^st is looming and continues to feed uncertainty to businesses still with strong ties to the EU. What Brexit will mean for the European Payment Order system, the availability of labour and the supply of materials continues to be discussed with no assured conclusions.

A further unknown to consider is the long-term impact of the pandemic on the real estate market. Questions around the return to the office and the future of retail are highly influential to the market, but as they remain unresolved for the foreseeable, the construction industry’s ability to carry out longer-term planning of 12-18 months, and beyond, is compromised.

There have certainly never been a more challenging set of circumstances facing the industry. Where we are starting to see signs of recovery, the key has been a quick response enabled through high levels of flexibility. Going forward, the most successful companies with the fastest recovery will be those who have been able to adapt, pivoting with the volatile market conditions. This agility needs to be embedded into the organisation, with a complementary workforce able to fare these turbulent conditions.

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Kier Secure New School Projects

Kier has secured £170 million of new school projects throughout England and Wales. In line with the UK Government’s mission to improve school buildings, the 13 schemes will be a combination of new buildings and refurbishment projects providing first-class facilities for 11,304 pupils.

In the last ten years, Kier has delivered more than £50 billion of educational facilities, including provision of 1,200,000m2 of new space for 163,874 pupils under the Department for Education construction frameworks. Kier are to utilise its extensive knowledge and put quality and innovation at the forefront of the projects, which include new builds Addington Valley, a new SEN school in Croydon and Barton Court Academy, a new free school in Canterbury

In Bournemouth, it will transform a former police station, magistrates and coroners court into a STEAM specialist all-through school, in Milton Keynes it will deliver a £18 million new build block which will include teaching space for science, design technology art and ICT for Stantonbury International School. Major refurbishment programmes will be carried out at both Park Hill Junior School in Croydon and in Wales, four new school projects will provide much-needed school places for the city of Swansea.

Andrew Davies, chief executive of Kier, states: “Through our delivery of these vital new school buildings we will provide critical infrastructure and support the Government’s aim of laying the foundations for everyone to have the opportunity to succeed.

“As a leading provider of educational buildings, we will use our expertise to deliver with a firm focus on quality, reducing carbon emissions and innovative solutions, through digitisation and modern methods of construction.”

Kier are committed to building sustainable futures for local communities, Kier aim to continue maximising training opportunities through these schemes.

The 13 school projects are:

• Addington Valley, Croydon
• Bishopston School, Swansea
• Barton Court Academy, Canterbury
• Dover Grammar School for Boys, Dover
• Haberdashers’ Aske’s Hatcham College, London
• Harris Academy Clapham, London
• Livingstone Academy, Bournemouth
• Park Hill Primary, London
• Stantonbury International School, Milton Keynes
• Tan-Y-Lan, Swansea
• Whipton Barton, Exeter
• Ysgol-Y-Graig, Anglesey
• Ysgol Gyfun Gwyr, Swansea

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CICV Issue New Health and Safety Guidance

With the construction industry in Scotland continuing its recovery, the Construction Industry Coronavirus Forum (CICV) has issued new health and safety guidance in order to help workers through their phased return to work.

The CICV Forum has launched seven new pieces of open source collateral, which offer in-depth industry advice on topics including face coverings, hand washing, domestic working and what to do if there is a case of COVID-19 on-site.

Along with this, the Forum has also updated its comprehensive 42-page document, COVID-19 Construction Operating Guidance, which underpins the Safe Operating Guidance which was produced by Construction Scotland, the Scottish Government, and the wider construction industry.

Rebecca Crosland, Health and Safety Adviser at the Building Engineering Services Association (BESA), a leading member of the Forum, said: “This new collateral is another important step in protecting both our workforce and the Scottish public as we all work together to minimise the spread of infection.

“The Forum’s Health and Safety sub-group has worked collaboratively to produce clear and practical guidance that is easy to follow and which can be used immediately by businesses of all sizes to help in their ongoing return.”

The seven new guidance documents are available to download from the CICV Forum website, and cover:

• Advice for businesses carrying out non-essential domestic work
• Health and safety checklist before work is carried out
• Effective use of face coverings
• Good hygiene and hand washing
• A questionnaire for clients before site visits
• What to do if someone displays COVID-19 symptoms
• Template letter for confirmed COVID-19 cases

In addition, the COVID-19 Construction Operating Guidance has also been updated to reflect the latest developments on face coverings, physical distancing, travel and prevention of cross-contamination with all new content clearly signposted.

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ilke Homes Deliver Modular Homes

Modular housing company ilke Homes is to deliver 25-factory built affordable homes to Wellesbourne in Warwickshire on behalf of Orbit Homes.

This is the first deal of this wider partnership and it will see ilke Homes deliver superstructures with Orbit managing on-site development. Orbit creates and builds diverse, multi-tenure developments throughout the Midlands, East and South East of England. It has opted to use modern methods of construction (MMC) due to the significant speed, quality and energy-efficiency benefits that offsite manufacturing delivers.

Orbit are also increasing its procurement of modular housing, following on from a successful scheme in March, with ilke Homes being the first modular housing partner for it.

This new deal marks ilke Homes’ first development within Warwickshire and follows on from recent Midlands schemes including development in towns such as Beeston and Arnold in Nottingham. The company has now ramped up its presence in the Midlands. As well as this, it has also seen new offices open in Birmingham, London and Bristol, in addition to its Knaresborough office.

The houses are to be manufactured at ilke Homes’ factory in Knaresborough, North Yorkshire, and they will be completed at the Wellesbourne site. Groundworks are expected to commence in August 2020, with the first home to be delivered in October 2020.

Andrew McDermott, Managing Director for Orbit Homes in the Midlands, said: “Ensuring our homes are good quality, affordable and safe is key for Orbit and we are keen to reduce our carbon footprint through the use of modern methods of construction. We see modular housing as an important part of the future of housing in the UK and are excited to work with ilke Homes as our first partner.

Over 80% of Orbit Homes are rated EPC C or above and we continue to look at ways in which we can provide housing that reduces our impact on the environment and provides our customers with energy efficient homes. Modular Housing assists us to deliver against our environmental objectives whilst continuing to provide high quality homes.”

The deal follows ilke Homes’ partnership with Stonewater, which will see the delivery of 120 factory-built affordable homes to Hereford in a £23m deal.

Matthew Bench, Executive Director of Partnerships at ilke Homes, said: “Scaling up the country’s delivery of affordable housing is clearly crucial, but more than anything it is about speed, quality and partnering with forward thinking housebuilders such as Orbit. This scheme will be delivered in roughly half the time of traditional construction, and with the homes precision-engineered in our Yorkshire factory, they will benefit from superior air tightness and energy-efficiency.

“The government has placed an increased emphasis on the reduction of carbon emissions and sustainable design and construction of new homes. By using MMC, we are able to deliver homes that are already some of the most sustainable in the country. It is testament to this fact that Orbit Homes has now taken a strategic step-change as it embraces modern methods to deliver much-needed, energy-efficient affordable housing.”

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McCann Begin M27 Smart Motorway Work

Nottingham-based civil and electrical engineering company McCann has been commissioned to deliver substantial works as part of Highways England’s £244 million smart motorway project between J4 and J11 of the M27.

The scheme will deliver the latest in smart motorway technology to the major route along the South Coast of England, and will improve road safety, ease congestion and reduce travel time between Southampton and Portsmouth, two of Hampshire’s busiest, and largest, cities.

Work started on the scheme in January 2019, and McCann was brought onboard in April 2020  to take on the installation and upgrade of motorway communications, street lighting and traffic signage as part of the Bam Nuttall Morgan Sindall Joint Venture (BMJV).

Along with congestion and travel time improvements, Highways England has also identified several additional benefits form the scheme, including facilitating economic growth through increased motorway capacity and where possible, enhancing the local environment whilst reducing the scheme’s impact on the environment.

McCann’s Contracts Manage, John McDonagh said: “We’ve partnered with Highways England and a number of its area frameworks, as well as a wide range of sizable projects historically on major motorways and highways.

“The 15 mile stretch will be widened to four lanes with changes to junction slip roads as well as new CCTV cameras, electronic information signs and signals, emergency areas and the hardening of the central reservation. McCann is working on the scheme until March 2021 to install all necessary communications and signage, as well as LED street lighting to improve road safety alongside associated infrastructure.

“The frameworks are great to be a part of, allowing us to collaborate with a number of contractual partners and Highways England to deliver the latest technology and infrastructure solutions to the betterment of the economy and local transport networks.

“We’re delighted to be onboard for the M27 improvement scheme and when completed, this will really boost the local area by creating a safer and more efficient transport solution for Hampshire.”

Speaking about the collaboration, Lee Crowley, Senior Procurement Manager at Morgan Sindall, said, “We’re delighted that once again McCann will be an integral part of our latest SMP project. BMJV and McCann have a longstanding relationship of successfully delivering Schemes for Highways England which branch back to the inception of the JV, we look forward to bringing  our collaborative working relationship and experience to this strategically important scheme on the South Coast.”

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Scottish Commission Call for New Approach

The Coronavirus pandemic has reinforced the need and urgency for the introduction of a new approach when it comes to prioritising and delivering infrastructure, according to the final report from the Infrastructure Commission for Scotland (ICS).

The report was presented to the Scottish Government by the ICS and says that a net-zero-carbon economy will remain at the heart of the strategy, whilst also setting out three key recommendations. They are:

• Giving an independent, specialist body the remit to provide strategic, long-tern infrastructure advice to the Scottish Government
• Enshrining the ‘place principal’ and implementing a ‘one public sector’ approach to planning and developing sustainable places
• Establishing a construction accord to strengthen the future relationship between the public sector and the construction industry.

The ICS also said that having an independent, specialist body to provide strategic advice is considered pivotal to effectively deliver Scotland’s inclusive, net-zero carbon economy.

‘Delivery Findings – A blueprint for Scotland’, which is published on Monday, 27^th July, and builds on the ICS’s initial key findings report which was publish in January 2020.

The independent organisation who would provide advice to the Scottish Government would sit outside of the political decision-making system, in order to operate in an arms-length and transparent way.

Among other ICS’ recommendations is that Scottish Government should enshrine the use by all stakeholders of the ‘Place Principle’- aimed at bringing together people, location and resources to create a sense of identity and purpose –  which it says has already been proven to be an effective model when designing places within planning practice. This would support the creation of sustainable places and help enable a ‘one public sector approach’ to infrastructure.

The report also recommends that by early 2021, Scottish government and the Construction Scotland Leadership Group should create a construction accord. It would include measures to improve the capacity, capability and diversity of the workforce at all levels with a heavy focus on skills development, training requirements and career prospects for those working in the sector.

Ian Russell, chair of the Infrastructure Commission for Scotland, said: “Infrastructure has a vital role to play in the delivery of an inclusive, net zero carbon economy and Covid-19 has amplified the need for urgent action and change for economic, social and natural infrastructure.

“The Commission is recommending that an independent, specialist body be given responsibility for providing Government with strategic, long-term infrastructure advice and enshrining the place principle within planning practice. Collaboration between the public sector and the construction industry is crucial and therefore establishing a construction accord between the public sector and the construction industry is another vital recommendation in the Commission’s report.”

Cabinet secretary for infrastructure, Michael Matheson, said: “The Covid-19 pandemic has been an unprecedented global crisis which has fundamentally changed every aspect of our lives. Infrastructure will play a critical role in the years ahead as we plan our strategic economic recovery from the pandemic.

“I am grateful to the Infrastructure Commission for their hard work – no doubt made more challenging in recent months – to produce this comprehensive second report on the delivery of infrastructure. We shall now take time to consider its findings very carefully.

“The Commission’s Phase 1 report has already helped to shape our next 5-year Infrastructure Investment Plan, details of which I look forward to announcing in September. This Plan will incorporate a response to the Commission’s Phase 1 findings.”

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Application Submitted for Derelict Site

CCG (Scotland) Ltd, Partick Housing Association and Hanover Scotland have submitted a joint planning application to transform a vacant site between Bearsden Road and Crow Road in Anniesland, Glasgow.

Working in partnership with MAST Architects, proposals for ‘The Sawmills’ – which takes its name from the Temple Hills Sawmill which once occupied the site in the 1930s – include demolition of the former Canal Bar and Restaurant. It will be replaced by new build construction of 46 one and two-bedroom affordable flats spread through two blocks.

Once completed, 24 amenity flats within the development, specially designed for older people, will be managed by Hanover. In addition to this, there will be a mix of private and communal green space, as well as resident parking. The development has been designed to meet the ‘Glasgow Standard’ space and energy efficiency compliance.

CCG Director Calum Murray said: “The proposals for ‘The Sawmills’ were derived after an extensive period of assessment by our Design Team who tested and exhausted every avenue to retain the building – a part of which is category C-listed.

“Our assessment evidenced that, because of the significant state of disrepair, the retention of the building in any form was not economically viable.  Instead, the building will be replaced by a contemporary and sustainable low-carbon development that will address key strategic objectives of Glasgow City Council by improving the supply of affordable housing in the west of the City.

“The Sawmills is the latest of many initiatives to contribute towards and advantage from The Glasgow Canal Project – real change is taking place around and along the canal, creating a safe and enjoyable outdoor space, and a positive resource which will help breathe new life and vitality into local communities.  Never has this been more necessary.

“As a new gateway to Glasgow, ‘The Sawmills’ has the potential to be a very exciting development and we look forward to continuing our partnership with Partick Housing Association with a view to commencing construction in mid-2021.”

Hanover Scotland Director for Asset Management Mark Ferey added: “Hanover is delighted to be working in partnership with both Partick HA and CCG to deliver much-needed amenity housing for older people in the Anniesland area”

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Output Up But Recovery Will Take Time

Seamus O’Doherty is a director in BRG’s construction practice, as well as a chartered quantity surveyor, chartered builder and qualified adjudicator, arbitrator and accredited mediator with nearly thirty years of experience in commercial and project management and related disciplines. Here he explains that although construction output is up, it could take a while for a full recovery.

It is often said that construction is an economic bellwether, so recent data from the Office for National Statistics (ONS) showing that construction output in Great Britain increased by 8.2% in May 2020, when compared against the record decline of 40.1% recorded in April 2020, is a positive step forward for the recovery of the economy. However, significant challenges still lie ahead for the construction industry and a comprehensive recovery will take time.

Figure 1: Monthly construction output saw a partial rebound in May 2020 after the record monthly decrease in April 2020

Whilst the uplift is certainly welcome, it is not entirely surprising given the Prime Minister’s address to the nation on 10 May, when he eased the lockdown and actively encouraged those who cannot work from home (including construction workers) to go to work. The continuing efforts of the Construction Leadership Council (CLC) in addressing the serious practical issues of social distancing and undertaking construction works in its production and continual revisions of the Site Operating Procedures – Protecting Your Workforce, which is now in its fifth revision, also contributed to the partial economic rebound.

However, the May 2020 output figures, when compared with those from February 2020, show a respective reduction of 38.8%. Therefore, construction output has a considerable way to go just to match the pre-Covid output levels. The recovery will be exacerbated by the reduction in UK GDP experienced during the same period. The ONS has calculated that in the three months to May 2020 GDP has shrunk by 19.1%. During the 2008 financial crisis, UK GDP shrunk by no more than 2.1% in a single quarter. Thus, it is clear we are in unchartered waters.

The Office for Budget Responsibility (OBR) also issued a fiscal sustainability report on 14 July, which sets out three medium-term scenarios for the economy and the public finances, based on different assumptions regarding the pace of the economic recovery and the extent of any lasting ‘scarring’ of economic potential. Even the upside scenario indicates nearly one year to approach the March 2020 forecast level. Moreover, the central and downside scenarios indicate that even by Q1 2025 the economy will not have recovered to the level forecast in March 2020. It is impossible to know how precisely the recovery will be shaped, however, there appears to be less support for a V-shaped recovery.

Figure 2: Real GDP versus March 2020 forecast

Whatever the difference of opinion concerning the shape and timing of the recovery, it is certain that there is a reduction of GDP. This reduction allied with the increasing costs associated with the measures undertaken by the government to combat the economic effects of Covid-19 by, for example, furloughing staff, short-term tax reductions to try to stimulate activity, and the likely tax increases in the near future means that the economy is in a fragile state. This fragility will impact the demand for the construction industry. In recognition of this the government announced on   30 June that it had brought forward £5 billion of capital investment projects under the mantra of ‘Build, build, build’. This is a welcome development, especially as circa £12 billion of output has been lost from March and May when measured against the output in February 2020, which was the last unaffected month before the lockdown.

However, we must remember that there will be a lag between the £5 billion spending announced, so it will not immediately replace the output that has been lost. For example, over £1 billion of the spend relates to a ten-year school rebuilding programme, with construction on the first sites planned to begin in September 2021. The construction industry therefore faces considerable issues in the medium to long term concerning obtaining sufficient work. This will, if other recessions are anything to go by, result in increased tendering competition and downward pricing as construction companies outbid each other to obtain work. The industry will also have to consider the impact of Brexit and the possible reduction in supply chains to a more regionally- biased one and the cost pressure that this may bring.

The construction industry is also facing significant challenges in the short term as it emerges from the lockdown into the ‘new normal’, and continues to grapple with the issues of sustained social distancing and its impact on productivity. Many projects currently underway are being completed in a landscape that has changed, and this will likely impact their financial viability, for example, possible reduced demand for office space due to the apparent success of working from home. The same could also be said for projects involving retail and leisure. Should the financial viability of projects be undermined, this will cause issues throughout the industry, especially if projects are suspended or terminated.

The projects that continue will also encounter potential headwinds. These include friction within the supply chain due to potential price inflation of products, as lines of supply and manufacturing have been impacted, as well as the consequences of Brexit and the possible discord with China. These may give rise to price pressures which contractors will not be able to pass on if the project has been procured on a fixed price arrangement. Should this occur, this will erode the notoriously thin margins forcing issues with the contractor’s cashflow and its ability to complete projects. This will be further exacerbated should contractors not be able to claim for additional time and loss of productivity incurred as a result of Covid-19. These issues, combined with the reduction in turnover, through the non-availability of new projects, and the corresponding failure to obtain enough cash to oil the business during the downturn will cause insolvencies.

On 1 June the CLC published a strategy, titled Roadmap to Recovery: An Industry Recovery Plan for the UK Construction Sector, which seeks to drive the recovery of the construction and built environment sectors, and through them the wider UK economy, following the Covid-19 pandemic and economic downturn. It aims to increase the level of activity across the construction ecosystem, accelerate the process of industry adjustment to the new normal, and build capacity in the industry to deliver strategic priorities, including: increasing prosperity across the UK; decarbonisation; modernisation through digital and manufacturing technologies; and delivering better, safer buildings. The plan has three phases to be delivered over two years:

• Restart: increase output, maximise employment and minimise disruption (0-3 months);
• Reset: drive demand, increase productivity, strengthen capability in the supply chain (3-12 months); and
• Reinvent: transform the industry, deliver better value, collaboration and partnership (12-24 months).

The CLC has set up four industry working groups to deliver the recovery plan and liaise with the government concerning strategy. The aims of the strategy are wide ranging and should, if implemented, assist in addressing some of the productivity issues that abound in the construction industry.

Overall, the recent construction output figures are encouraging although the industry faces significant headwinds as the socio-economic impact of the pandemic unfolds and Brexit looms. In the words of John F Kennedy “Change is the law of life. And those who look only to the past or present are certain to miss the future”. It is now time the construction industry and government look to the future and seize the opportunity to reshape the industry.

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SNIPEF Welcome HS2 Decision

The Scotland and Northern Ireland Plumbing Employers’ Federation (SNIPEF) has welcomed a decision from HS2 to support its supply chain throughout its massive rail contract by agreeing to project bank accounts (PBAs) for key projects in Phase 1.

Using PBAs provides a more transparent and speedier way to make payments for companies at all levels of the supply chain. Payments are made from one pot and do not have to cascade through multiple tiers of contractors.

Fiona Hodgson, Chief Executive of SNIPEF, said: “This is excellent news and something that the construction industry in Scotland has been calling for over many years. It is especially welcome since the HS2 project will generate an estimated 400,000 contracts across its supply chain and two thirds of these will be with SMEs.

“It is our hope that the acceptance of PBAs by such a flagship project will act as an exemplar for all construction projects, major and minor, in future.

“The announcement is also, I believe, an acknowledgement of the hard work done by the Specialist Engineering Contractors (SEC) Group, of which SNIPEF is a member, which has been lobbying for PBAs over recent years.”

SNIPEF is a trade association for plumbing and heating businesses based in Scotland and Northern Ireland. It has over 750 member firms which together employ more than 3,500 plumbers. Since its establishment, it has provided professional and practical assistance to plumbing and heating businesses in both jurisdictions.

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Pick Everard to Overhaul NHS Facilities

Pick Everard, a property, construction, and infrastructure consultancy, have been chosen for a programme of works for health facilities, which are owned by NHS Property Services.

The programme of work is valued at around £5 million and will take place in and around the Midlands area of England. NHS Property Services’ portfolio is one of the biggest in the UK and comprises of more than 3,000 properties with 7,000 tenants across England. With a total value in excess of £3 billion, this represents around 10% of the total NHS estate.

Work will cover the delivery backlog maintenance projects for 38 health centres where remedial work to the site infrastructure, internal and external building fabric, and mechanical and electrical systems will take place, with work beginning this month (July 2020).

The Pick Everard team will provide programme management, project management, quantity surveying and principal designer services (health and safety). These works will overhaul building systems and will also ensure that they meet current building guidance. The team will work in collaboration with the external consultants who undertake the architectural and services design to deliver the projects.

David Harris, Partner at Pick Everard said: “We’re really pleased to have been awarded this commission, allowing us to continue and expand the extensive services we have been providing in support of the NHS and its services across the UK for many years. It is of course a point in time when providing the NHS with as much support as possible has never been so important, so it is great to be progressing these projects, allowing us to help support our health service in the Midlands with critical work.

“The government has promised a number of programmes and funding packages for the health service throughout this year, including 40 new hospitals announced as part of ‘Project Speed’ at the end of June. However, it’s of clear importance that we must look after and improve the existing health service infrastructure, ensuring it continues to be fit for purpose, in order for healthcare professionals to provide the best possible care to patients in the region.”

Paul Jones, principal construction manager at NHS Property Services, added: “We’re pleased to have skilled and experienced partners on board to support the programme of works across the Midlands. The clear objective in sight is to deliver better patient care and these works are central to that.”

Imran Ishaq, associate director for building surveying at Pick Everard, who is leading on this project, said: “There is no doubt that Covid-19 will impact how we deliver this work and it is imperative safety guidance is followed by observing social distancing and health and safety protocols. We will be working within live, occupied environments, so will be using phased construction strategies to keep disruption at an absolute minimum and allow tenant businesses to continue with their services as work is in progress.

“A big focus for all we do at Pick Everard is delivering works that make a real social and economic difference to the community. For this programme of works we will be deploying local labour and working closely with SMEs across the region on the provision of these improved community care facilities.”

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Balfour Beatty Awarded £197m Contract

Balfour Beatty has announced that it has been awarded a £197 million contract to construction Phase Two of the Lewisham Gateway regeneration scheme. Awarded the contract on behalf of Lewisham Gateway Developments, a subsidiary of Muse Developments, the scheme will be owned and operated by Get Living, once completed.

The contract sees Balfour Beatty construct four mixed-use buildings, which will include 530 homes for rent, 119 co-living units, a cinema, a gym, office facilities, along with retail and restaurant areas. The development will also create dedicated ‘green spaces’ for the community to enjoy.

In addition to delivering the main construction works, Balfour Beatty Kilpatrick will also deliver the infrastructure’s mechanical and electrical (M&E) works, while Balfour Beatty Ground Engineering are to carry out pilling works.

Located adjacent to Lewisham’s DLR station, the new Lewisham Gateway will represent one of the largest transformational regeneration schemes in South East London. Overall, it will create over 900 new homes and urban spaces for local communities to live in and enjoy.

As a part of Balfour Beatty’s commitment to 25 by 2025, which is an initiative to reduce work undertaken onsite by 25% by 2025, the team will utilise modular construction techniques throughout, including the installation of prefabricated bathroom pods, which will in turn increase efficiency, quality and onsite safety.

Graham Hill, Managing Director of Balfour Beatty’s UK Construction Services business in London, said: “Our selection by Muse Developments for the Lewisham Gateway Phase Two development is testament to Balfour Beatty’s ability to deliver key regeneration projects in London, having most recently been appointed to deliver Phase One of the East Wick and Sweetwater development last year.

“Our ability to offer a fully integrated solution for our customers, from ground engineering expertise and M&E capabilities through to main works construction will significantly contribute to the regeneration of Lewisham Gateway, leaving a lasting-legacy for years to come.

“All works will be delivered strictly adhering to Balfour Beatty’s COVID-19 Site Operating Procedures, which are fully aligned to the latest UK Government guidelines to ensure the continued health, safety and wellbeing of all those who work for and with the company.”

Mike Auger, Regional Director at Muse Developments, said: “Bringing Balfour Beatty on board to build Lewisham Gateway is a proud milestone for everyone involved with the scheme, as it highlights confidence in our long-term vision – despite the unprecedented situation we all find ourselves in – to deliver a truly transformational scheme that will drive economic and social prosperity in the heart of Lewisham when it’s needed most.

“At Muse, we’re committed to bringing the best of the public and private sector together, to help restart the economy, which will come from our towns and cities, by bringing forward high-quality design, but importantly a purpose at its heart to meet the diverse needs of the community. We look forward to working closely with Get Living and Balfour Beatty as the scheme progresses.”

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Transition Back to Work and Mental Health

Russell Stilwell is Founder and Managing Director of RSE, here talks about how the construction industry needs to safeguard the mental health of its workers.

Pints are being pulled in pubs again. Restaurant kitchens are firing up. Non-essential shops are welcoming customers.

As much of the UK is given the go-ahead to reopen, many workers are returning from furlough or heading back into the office.

So, what does this mean for the construction industry?

An industry where many of us have been continuing to work throughout lock-down. A sector where many of us have been dealing with heightened anxiety, stresses and pressures over the last three months. Whether we’re working on site or the Director of a business, it’s been tough.

Some may forget that the construction industry has largely remained operational during the lockdown period. The upshot of this is that it’s even more important for businesses in the sector to put a wellbeing strategy in place that recognises this. We should be striving to safeguard the mental health of our all our workers… not just the ones who are returning after a period of absence.

Whether someone is just returning from furlough or has been working consistently throughout the lockdown period, there is a general feel of natural uncertainty and differing levels of anxiety.

The pandemic has caused more stress for people than ever before, from losing loved ones to the financial burden and change to daily lives. Quite simply, many people were struggling with their mental health prior to Coronavirus. They’re struggling even more now.

The construction industry finds it hard to social distance at the best of times. We tend to work in small spaces, carrying bulky objects, so of course there is a risk of bumping into one another. This can cause concern for workers that are still being cautious in their interactions.

What’s more, it is highly likely your team will be working on projects in a city centre, this brings the issue of whether employees feel comfortable travelling and wearing a mask on public transport, therefore pointing out the many different areas that need to be considered when transitioning back to work.

Employers need to be mindful of each workers individual situation. There should never be a one size fits all approach to mental health. This is even more pertinent now.

It is important to collaborate as a team to address key issues in a sensitive way so that solutions can be reached.

Of course, there are bound to be questions. Many will worry if their job is safe. They’ll wonder if their boss still needs them. If communication lines aren’t open and there is no reassurance employees may feel added pressure… add this to everything else going on in our individual worlds and it could create a recipe for burnout.

As a business owner within the construction industry, I know there is no crystal ball telling us it will all turn out fine. Our lives would be much easier if there was one!

However by supporting your team, perhaps by joining your workers on site to engage with them on a more personal level, leaders can lead and inspire from the front creating a more positive and communicative work dynamic.

But, it’s important to remember… it’s not a one way street.

For employees, there needs to be a level of personal responsibility throughout this. At all levels. Regardless of roles.

There needs to be recognition that businesses are struggling, and will continue to struggle. Things won’t go back to normal overnight.

There needs to be a heightened sense of corporation. Our teams need to be open to positive change – it’s not just the responsibility of our business leaders. It should not just sit on one group’s shoulders.

Important steps for business owners

Directors have a duty of care to protect their employees and their company. As a result this role throws up its own challenges. It’s not always an easy balance to achieve – particularly at a time like this. It’s hard on us as we consider financial profits and losses or what our business will look like in six months’ time.

But we don’t have to be robots.

Leaders need to understand that by willing to be vulnerable, and admit they are struggling, their team can be shown how opening up about their mental health can create positive change – something that is important within the construction industry as we struggle with the ‘macho’ stereotype.

Take that extra five minutes on the phone with one of your team members or organise company socials like virtual bingo. Find out how your team is doing because, like a domino effect, the way you choose to handle your business will have an effect on its employees no matter at what level.

Our people need take steps to support their own mental wellbeing

Mental wellbeing needs to be front and centre of everything we do as we start to return to normality. Especially for our teams on the ground.

Our people need to recognise where they are with their own mental wellbeing. How are they feeling about returning to work? Where are the anxious feelings coming from? Were those emotions there before?

Our people need to be willing to open up and talk about their thoughts. But at the same time, there needs to be a level of cooperation from the ground up. At the end of the day, safeguarding businesses, projects and jobs will be top of the agenda for the foreseeable future… we all have a role to play in how successful we are in achieving this.

Future learnings

As a nation we have to understand that we will never be able to return back to normal completely. At least not in the near future. Therefore it is the prime time for businesses to adapt and better their wellbeing policies in order to make positive change.

Within the construction industry, there is a risk that we could return back to the old ways, focusing more on the need to deliver rather than the mental state of our workers.

We can’t let this happen.

It’s important to get conversations flowing now. Leaders need to consider their companies business strategy considering where it wants to see itself in the next few years, what jobs it wants to be working on and how you expect your accounts to play out in the next couple of months.

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Opportunity to Transform Construction

David Clark is Manufacturing Director at The McAvoy Group in this latest feature for UK Construction Online, he speaks about how output might be down due to the Coronavirus pandemic, but the opportunity to transform the construction industry has never been greater.

While the disappointing construction output figures for May certainly aren’t a surprise to anyone in the industry, they have laid bare the extent of the damage inflicted by the coronavirus pandemic – and the challenges ahead in reaching pre-Covid levels of activity while adapting to our ‘new normal.’

May saw a record 29.8% fall in output compared with the previous three-month period, while new work plunged by 30.03% and repair and maintenance by 28.9%. Output did rise slightly (8.2%) in May with the reopening of sites and improving availability of materials, but it remains at a significantly lower level than normal – 38.8% lower in comparison with February 2020.

Declining output figures are to be expected given the unprecedented challenges facing the industry – however, the crisis also shone a spotlight on productivity; a problem before the crisis hit and worsened by Covid-19. Recent research highlighted productivity losses of around 35% on UK construction sites as a direct result of the pandemic, compounding the systemic productivity challenges the sector already faces.

In recent weeks, we have seen a series of predictions on the UK’s recovery from Covid-19 – some more optimistic than others – but we can all agree on the fact that there are tough times ahead.

The government has been swift to act, setting out its “Roadmap to Recovery” plan – within which boosting productivity plays a key role. It has been positive to see its commitment to supporting construction as an engine of the UK economy, with increased funding and infrastructure spending. As a result, the industry can focus on reaching pre-March levels of output as quickly as possible.

But is there more we can do? Much of the rhetoric has, so far, concentrated on rebuilding; taking back the gains we have lost. What we have here is an opportunity to transform the industry for the better – and, what’s more, we know exactly how to do it.

For some years now there has been extensive discussion around tackling productivity in the construction industry, which lags-behind our continental neighbours. With government backing and new funding commitments we have a real chance to make lasting changes. Embracing Modern Methods of Construction (MMC) and digital technology will allow us to secure the productivity improvements we need and balance some of the more challenging impacts of Covid-19, including social distancing on site and the availability of materials.

Now is the time to accelerate the adoption of MMC, leading the way with offsite construction methods, digital platforms and focusing on the lean manufacturing methods that are commonplace in other industries, such as the automotive supply chain for example.

There is enormous value in R&D and innovation and the industry is making huge strides to drive forward MMC principles, making construction faster, safer and greener than ever before. As part of the Innovate UK-backed consortium, Seismic, we have seen the power of collaboration first-hand, working alongside our competitors to increase standardisation in the delivery of education buildings, reducing the number of parts per module by up to 30% to around 1,900 components. Seismic has facilitated significant improvements in the way school buildings are delivered – projects can now be delivered with up to 50% lower emissions and 33% lower costs, without compromising on design. The same principles are transferrable to other sectors, from healthcare and other local infrastructure through to commercial projects and residential buildings.

We need a commitment to innovation, collaboration and the sharing of knowledge, and a willingness to do things differently.

Whilst there may be few positives to arise from the coronavirus pandemic, the continued appetite for innovation in the UK is definitely one of them. Ingenuity in design and manufacturing really shone during the early days of the crisis, with manufacturers across the country called upon to produce ventilators in mere weeks. We must channel that same commitment to innovation within the construction industry. There is a real will to get things done, and we’re likely to see significant strides made in transforming the industry for the better in the coming months and years, creating a sector that is more efficient and better equipped to deal with the challenges ahead.

There are many unknowns in terms of tackling the coronavirus pandemic and what might lie ahead – whether it will mean further closure of sites during the winter months, or a return of 2m distancing. Whatever the future holds, by putting MMC front-and-center, the construction industry stands itself in the best stead to keep projects on track, prevent spiraling costs and make sure output continues to head in the right direction.

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Cadent Awards £600m in Contracts

Cadent has announced that it has awarded four Construction Management Service contracts to deliver its mains replacement programme in each of its networks from April 2021.

The Construction Management Organisation (CMO) contracts have been awarded to four different companies that will work closely with Cadent’s network teams during the next two regulatory periods (RIIO-2 and RIIO-3) to manage the planning and delivery of each network’s mains replacement programme and other related investment projects.

The new performance-related contacts are valued at around £300 million over the initial five years, with a second five-year term taking the overall potential value to £600 million.

The contracts have been awarded to the following companies in each network:

• Costain – East of England network
• Morrison Utility Services – North London network
• Network Plus – North West network
• Sapphire Utility Solutions and Enzen Global Solutions joint venture – West Midlands network

Howard Forster, Cadent’s Chief Operating Officer, explained: “We are delighted to be working with each of these companies.  The use of a Construction Management Organisation contract across our gas mains replacement work is a new and innovative approach for Cadent.  We are utilising knowledge and experience from other sectors, regarding this type of strategic partner contract.  It is designed to allow these partners to utilise their organisation’s capability and skills to focus on driving customer and safety performance and programme efficiency across Cadent’s major investment programme on a specific network basis.”

The next stage of the partnerships is to work with each of the CMOs to appoint Local Delivery Partners (LDP) who will carry out the mains replacement work, contracted by Cadent but managed by each of the CMO partners in the networks.  These LDP contracts will be awarded in the Autumn.

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Nexus Win Retail Studies Trio

Nexus Planning have announced that it has won a trio of retail studies in London, Bristol and Bedford, where they will examine and advising on what the future of retail looks like in these three locations.

In Tower Hamlets Nexus will be advising the local council on their Neighbourhood Centre in the East of the Borough. Nexus will also determine the nature of the physical spaces which make up the centres. Along with this, they will also engage with local residents and businesses to get an understanding of how footfall might be driven down by each of the centres. Nexus will also be producing Strategic Visions for each of the centres in conjunction with offers and other local stakeholders.

In Bristol, Nexus has engaged to consider ‘What next?’ for Bristol City Council. The consultancy will carry out wide-ranging market research of both residents and city centre businesses in order to get under the skin of what makes the city centre tick and how it might be more agile when it comes to future trends. Along with this Nexus will also be responding to the rapidly evolving retail world in general. Nexus will also be considering the specific role of independent businesses in the city centre, as well as street markets.

In Bedford, Nexus is currently producing a Boroughwide Retail and Leisure Study on behalf of Bedford Council. This will primarily be concerned with the key town centres of Bedford and Kempston and will make recommendations for their future vitality and viability, including ways in which the town centre can respond to a post-Covid world

Rob Pearson, Nexus Planning Executive Director, comments: “In this time of great uncertainty, we’re delighted to be part of the resilience and recovery of these three British retail hubs. The task ahead is no mean feat as we emerge out of Covid-19. However, together with local insights from residents and enterprises, alongside our retail study experts, we’re looking ahead to and hopeful of a positive retail future.”

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£2.8m Contract for Enviro Building Solutions

Enviro Building Solutions has won a contract worth £2.8 million for the construction of an eight-classroom block for the Thomas Aveling School in Rochester. Work on the project has begun, and it is expected to be delivered by September 2020.

Along with extra classroom capacity, the project will also include an extension to the school’s existing sports changing facilities using traditional construction methods. In addition to this, Enviro will also oversee the construction of a MUGA (Multi Use Games Area) canopy to cover the existing tennis courts, therefore creating an all-weather play facility.

Craig Reidy, Finance Director at Enviro Building Solutions, said: “Modular building methods provide the perfect solution for applications where timescales to project delivery are particularly tight. Traditional construction methods could not achieve the build schedules we regularly provide to deliver our projects in line with the requirements of our clients and end users. In addition, today’s advanced modular buildings combine cost-effectiveness with versatility and sustainability; we build high quality facilities which often achieve EPC ‘A’ ratings, creating attractive and practical buildings designed to stand the test of time.”

The Thomas Aveling School is the joint lead school of the Ford Pitt Thomas Aveling Academies Trust, (FPTA). Enviro Building Solutions has delivered a number of projects in partnership with Medway Council on time and in budget, and the organisation was the Council’s preferred partner for this build base on the quality and value of past schemes, including classroom blocks for Rainham Mark Grammar School and Riverside Primary School.

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Response to latest ONS construction figures

Tobias Barfoot, MD, Inno Construction speaks to UK Construction Online about what the latest ONS Statistics mean for the construction industry.

It wasn’t surprising at all to see the fall we did in April, with the Covid-19 pandemic really taking hold of the country. That was the month we hit the peak of the virus, and lockdown was in full force. We had had to quickly shut down all sites with the hope of returning soon.  

It’s fantastic to see the rise of 8% through the month of May, however. And this was despite the fact that most of the sector didn’t really return until the back half of that month. At Inno Construction we shut down along with most other businesses. Whereas prior to the lockdown our phones were ringing and project leads were coming through continuously, as lockdown got nearer this reduced. It wasn’t actually until we were into the lockdown period that people starting calling once more.
 
It’s clear that despite the positive news coming for the month of May, the construction industry as a whole is going to take a long time to recover. We can’t predict if an increase of 8% is going to be consistent month-on-month, and, even if it is, that’s not going to get us back to where we were. With the industry still 40% lower than pre-lockdown levels, it’s very clear we have a long way to go. 
 
Since the easing of restrictions, we are certainly seeing an increase in business, which is encouraging. To back up what the findings say we are certainly experiencing a lot of unfinished projects that are requiring immediate attention. We have had two projects in the last four weeks that are in a dire state of repair. This is mainly due to having to shut the sites down quickly and now not having the right contractors in place to finish the project, for one reason or another. 
 
We are currently seeing a huge shift in the industry as companies pivot to operating differently to how they have done in the past, and at Inno Construction we are no different. Our changes include offering virtual appointments, creating 3D plans from drawings, completing the tendering process in two stages (one long distance through video calls) and only visiting homes when it’s absolutely necessary, to protect our staff and the consumer as much as practically possible. Ultimately, this is also excellent for companies as this really reduces the amount of time spent on the road. It’s not only a great cost saver but is also good for the environment, reducing a lot of time travelling in cars and vans. 
 
We are seeing that most of our customers are more cautious of signing on the bottom line right now, which is completely understandable. Our customers are uncertain about what the future holds and don’t want to be in a situation where they are left without a habitable dwelling if the worst should happen with a second wave of Covid. I think this will have an effect on the industry growth we see going through in the next the few months. Most of our time is currently being spent finishing our own projects started pre-lockdown, as well as finishing other projects started by firms who, for various reasons, are unable to finish them. Currently all new projects are not due to start until August, which just shows exactly how cautious consumers are being right now. 
 
We had a local survey carried out by Savanta just as restrictions were starting to ease in the country, which shows that 31% of people in the East of England who were originally planning to move are now actually staying put, and 48% of people are using their holiday funds for home improvements. These figures show that the growth in May should hopefully continue into the coming months. 
 
I hope that all the adaptions that the industry has made to battle against the constraints of the pandemic last, and we improve as an industry to provide better, more effective working practices for our staff and for the consumer. I set up the business to look for innovative ways of improving the trade – hence the name, Inno – and I think there’s a lot of scope to do things differently and improve as an industry. This certainly isn’t the last pandemic our world is going to face, and it would benefit the future of our industry if we are working to these practices and adapting further in order to survive the next potential ordeal. 

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Consumer Confidence Key in Recovery

In this latest feature from Simon Ayers, TrustMark CEO, he speaks about how consumer confidence will be the key in the construction sectors recovery after the Coronavirus pandemic

There’s no denying it, the construction industry has been hit hard by the coronavirus pandemic. Workers have been laid off or furloughed, and investment has been restricted.

Recent figures from the Office for National Statistics (ONS), which show the construction industry had its worse month for output since records began, made grim reading.

But there are signs of life and there is light at the end of the tunnel. The Chancellor recently set out his plans for a £2billion investment in green home grants, which includes a voucher scheme to improve the energy efficiency of the UK’s homes and investment in the energy efficiency of social housing. He focused on a green recovery with an emphasis on job retention and creation, apprenticeships and trainee schemes as well as relief through tax-related areas. This has all been welcomed by TrustMark and others across the energy and industry sector.

There are certainly questions surrounding the implementation of these schemes however, this investment coupled with another recent announcement that £1.8million will be available to support the development of green home finance options, will help protect jobs and create new opportunities for businesses to retrain and grow.

The support for homeowners to carry out insulation and other retrofit measures around their homes is also good news. The only way to have a realistic chance of meeting the Government’s carbon neutral 2050 deadline is to improve the energy efficiency of the homes we already have, so this investment from the government is an important step in achieving that goal and starting the development of a long-term plan to retrofit a high percentage of the UK’s homes.

It is clear however, that consumer confidence is key in getting the construction industry back up and running to full capacity, enabling it to make its full contribution to the country’s economic recovery. There are still some homeowners who are reluctant to have work done in around their homes while social distancing and lockdown restrictions are still in place, even if they have been lessened slightly. And even though tradespeople have received various guidelines about how they carry out their work in a safe manner, very little has been given to the consumer about what they need to do before, during and after work is carried out in and around their home.

Working with BEIS, TrustMark developed the Work Safe, Safe Work campaign to instill confidence in the consumer that work can be carried out in and around their home in a safe and COVID-secure manner. The practical and easy to understand information sets out clear expectations – after all, it is a joint responsibility to ensure everyone is protected.

This information coupled with the new measures set out by the Chancellor will help hopefully incentivise homeowners to have work done on their properties and start paving the way for the construction industry’s recovery.

There is still a long way to go and we believe retrofit roadmap needs to be developed for the industry to follow, so we are working to the same goal and delivering quality work that consumers can trust. We will be working with and collaborating across the energy and construction sectors to rebuild consumer confidence, ensure businesses are supported and consumers can rely on the traders that carry out work in and around their homes making them fit for the future.”

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Construction Outputs Warning Sign

Mark Halstead, partner at financial risk and business intelligence firm Red Flag Alert, tells UK Construction Online that the sector should prepare itself for billions of pounds in unpaid invoices.

Although the latest ONS data shows construction output grew by 8.2% month-on-month, this is against a backdrop of outputs falling by a record 29.8% in the three months to May 2020.

One of the biggest warning signs of such a decline in outputs is that financial distress is not far behind. This brings with it a significant risk of insolvent debt, meaning invoices go unpaid.

The construction sector operates on low margins and has to regularly contend with unexpected operational challenges because of the very nature of work. Additionally, in some cases, companies also have to deal with balloon payments for projects. All of these factors combine to create a perfect storm for jeopardising cash flow and putting companies under immense financial strain.

When these businesses are hit by a significant drop in outputs and new work, which fell by 30.3% in the three months to May 2020, according to the ONS data, their ability to survive becomes even more difficult. Many companies simply don’t have the cash in the bank to last a period of weeks or months of low or no income.

Granted, some of the Government’s COVID-19 financial support measures will help these businesses through lean times. Unfortunately, though, for some operators this will be a case of delaying the inevitable. Levels of debt in construction are already the highest amongst the UK’s sectors and this situation will only get worse over the next 18 months. This will cause a spike in companies going out of business, which will leave a long tail of debt.

Red Flag Alert analysis shows that at 31^st May 2020, insolvent debt in the construction sector stands at £336million. Based on analysis from the past three years, we know that around 3% to 4% of struggling businesses will fail each year. The economic impact of COVID-19 will see this rate of failure rise substantially, reaching well into double figures. Taking this into account, it’s conservative to estimate that construction sector debt will double this year to £772m and could be around £1.4billion in 2021.

Essentially, these figures mean that construction companies are facing over £2billion worth of invoices going unpaid between now and the end of next year.

Businesses need to act now to protect themselves against this debt. They should prioritise collecting money owed to them and also properly due diligence their supply chains. This includes both customers and suppliers.

Using sophisticated software like Red Flag Alert, it is possible to run a comprehensive financial health check of a company. This can be done in minutes and is based on extensive data that’s constantly updating. If businesses are about to undertake a project for a customer, they need to know if that client has the ability to pay their invoices. Having this knowledge can help construction companies avoid the risk of incurring significant expenses for materials and labour, which they may not recoup.

The financial insight can also be used to adjust credit terms. If a construction company realises a customer is a higher financial risk, they may decide to address this by asking for part payments up front or reducing payment terms to identify and act earlier on any potential payment issues.

Looking beyond customers, the long tail of debt will put suppliers at risk. Unpaid invoices can have an immediate impact on the security and operation of a company. This will be accelerated as insolvent debt rapidly increases. Companies may find that suppliers which were in a good shape just weeks ago, are now facing collapse. Spotting the early signs of their difficulties can protect against costly supply chain disruption and expensive project delays.

The ONS data provides an extremely important insight into the mood and confidence of the construction sector. This is likely to change as the Government continues its attempts to drive the economy forward but will take a long time to catch up and to return to any level of ‘normal’. Companies are best advised to protect themselves by concentrating on the security of their cashflow by regularly checking levels of financial health throughout their supply chains.

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