Building After Brexit

It is perhaps unsurprising that much of the literature on Brexit immediately following the EU referendum in 2016 lacked coverage on what may happen in the event of a “no deal” Brexit. “Hard” Brexit is a situation that many thought, or at least hoped, the UK would not find itself in, but as matters currently stand the UK faces a no deal hard exit from Europe come the end of the transition period on 31 December 2020. Exactly how detrimental this will be to the UK construction sector remains to be seen but, in the meantime, it is worth highlighting some of the potential significant impacts of the UK’s exit from Europe whether there is a deal in place or not.

The general consensus is that key legislation relating to construction operations which derive from EU Directives will largely remain unaltered on the basis that such legislation promotes and supports some of the UK Government’s primary policy objectives, such as ensuring health and safety during construction operations. For example, the Construction (Design and Management) Regulations are derived from an EU Directive and any significant departure from the current regulations would be highly unlikely.

A more pressing concern for the construction industry is the impact Brexit may have on the free movement of people and goods and how this will affect the availability and costs of both labour and supplies.

EU nationals currently constitute around 8% of the UK’s construction industry workforce and some 28% of construction workers in London are EU nationals. The UK’s existing labour shortage is no secret and there is a realistic concern that this shortage may increase exponentially if EU nationals are not permitted to remain in or enter into the UK for work in the construction sector. At the moment, EU nationals who live in the UK before 31 December 2020 are allowed to continue to do so until 30 June 2021, which is the deadline for applying for settled status in the UK. An EU national arriving after 31 December 2020 will require a visa or sponsorship in order to work in the UK. These additional obstacles coupled with the backlog of construction work as a result of COVID-19 is likely to make it much more difficult for the UK to get back to pre-COVID-19 construction output levels.

When it comes to the import and export of goods and materials, there is great uncertainty surrounding how tariffs may be impacted. Four EU member states feature on the UK’s top five export markets (Republic of Ireland, France, Germany and Netherlands) as well as the UK’s import markets (Spain, France, Germany and Netherlands) according to the Office of National Statistics. A change in tariffs for imports in particular is likely to lead to the inflation of prices from EU firms providing goods and materials to the UK. This is a serious concern given that almost a quarter of construction products used in the UK are imported, with almost two thirds of such products coming from EU countries.

In addition, the impact of Brexit on the planning process could influence development programmes where consents must be obtained before construction works can even begin. Planning law and policy are highly devolved (England & Wales, Scotland and Northern Ireland each have their own regimes) but EU requirements are embedded in all of them. This is apparent in the Environmental Impact Assessment (EIA) regime, for example, which requires the potential environmental effects of proposed development to be assessed before consent can be given. Although not an obvious pillar of the planning system, non-compliance with EIA requirements can prove fatal to the consenting process.

The 2018 EU (Withdrawal) Act provides that certain EU regulations will continue to have effect in the UK post 31 December 2020 so there may not be any immediate change on the ground. However, in a no-deal Brexit scenario, the European Court of Justice will no longer have any UK jurisdiction. Like the anticipated approach to health and safety law mentioned above, this is initially not likely to herald any drastic changes. However, it would enable UK judges to deviate from European precedent and, over time, change how laws originally transposed from EU directives apply in practice in the UK.

The broader socio-economic impacts on market conditions are likely to be the facets of Brexit most acutely felt in the short term. Housing and commercial property demand could change dramatically, with consequential effects on infrastructure requirements and the construction resources needed to deliver them. Initially, such changes would be reflected in policy and regardless of whether EU-derived aspects of construction law and consenting procedure remained unaltered. Despite the undeniable impact Brexit will have on the development sector, predictions are that it will be the aftermath of COVID-19 that has the most influence on the shape of things to come.

Amy McCalmont is a Solicitor at Davidson Chalmers Stewart Globalaw, Jacqueline Cook, Head of Planning at Davidson Chalmers Stewart, Member of Globalaw.

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Investors Brace for Recession & Look to Property

An independent survey of more than 1,000 UK-based investors has revealed what they think about the UK economy, and the country’s position as an investment hub in the light of COVID-19 and Brexit.

The survey shows:

• 62% of UK investors are concerned that the UK Government’s mishandling of the pandemic will result in a long-term recession
• 41% are worried about the impact of Brexit on their finances
• Only 42% of investors believe the UK will remain a global investment hub following Brexit and COVID-19
• However, 51% believe UK real estate will be a sound investment regardless of Brexit and COVID-19
• 40% think house prices will increase in 2021 compared to 19% expecting a decline.

Most of those who were surveyed are worried the Government’s handling of the Coronavirus and Brexit will have a negative impact on the economy, according to FJP Investment

The investment firm commissioned the independent survey of more than 1,000 UK-based investors, all of which have investment and savings of more than £10,000. The survey also found that more than three-fifths (63%) are concerned about the Government’s handling of the COVID-19 pandemic, which they think could result in a long-term recession.

FJP Investment’s survey also revealed that 41% are worried about the impact Brexit will have on their finances. This figure rises to 53% for those with an investment portfolio valued over £250,000. And with Brexit negotiations stalling, over half (53%) are expecting a no deal outcome come 31^st December 2020.

As a consequence of COVID-19 and Brexit, only 42% of investors believe the UK will remain a global investment hub.

When looking at real estate, investors surveyed were more positive, with just over half (51%) feeling that UK property will remain a sound investment regardless of the pandemic or Brexit. This comes as Nationwide’s House Price Index for October revealed a 5.8% annual increase in average house prices.

With the Stamp Duty Land Tax holiday ending on 31^st March 2021, around 40% of investors expect house prices to increase in the next year, compared to 19% who expect them to fall.

Jamie Johnson, CEO of FJP Investment, said: “The economic disruption caused by COVID-19 clearly has investors worried. With the Bank of England downgrading its latest GDP growth forecasts and announcing a further £150 billion economic stimulus, investors are concerned there is still a long way to go for the UK to overcome the pandemic-induced recession.

“At the same time, the lack of progress between London and Brussels on Brexit negotiations is posing further challenges. A no deal Brexit is looking increasingly likely, and this uncertainty is making it difficult for investors to plan for the future.

“Despite these issues, however, our research shows that investors are still positive when it comes to property. House prices have been growing at a remarkable rate recently and many investors are confident this will continue over the course of 2021. This is important – any attempt to stimulate investment and economic growth will be boosted by a vibrant property market. As such, it is vital for the government to implement policies that sustain this interest over the long term.”

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Land & Water Completes Sustainable Works

Land & Water has completed its works as part of the Thames Tideway Tunnel project to transport and unload the London Clay mined from the new ‘super sewer’ tunnel to its Habitat Creation Scheme in Rainham.

The work was carried out on behalf of client AC Bennet & Sons, who are employed by the Joint Venture between BAM Nuttall, Morgan Sindall and Balfour Beatty, and are delivering the west section of the new 25km tunnel.

By using river barges, Land & Water has removed more than 25,000 lorry movements from the roads of London, transporting 850,000 tonnes of material from the main drive site for the west section at Carnwath Road Riverside in South West London, to Land & Water’s Jetty at Coldharbour Lane where it was then reused to help regenerate natural habitats.

Having become involved in the project in January 2018, Land & Water has worked alongside the joint venture throughout the tunnel drive to unload barges supporting the delivery of the west section.

Tom Melhuish, Commercial Supervisor at Land & Water, said: “For many years, Land & Water has been working hard to deliver innovative logistical solutions which will unlock future supply chains in and out of London.

“This project is a truly great example of how the River Thames can be harnessed as a sustainable transport system, reducing both congestion and air pollution, whilst also championing the beneficial re-use of waste to design new habitats and foster biodiversity.

“Despite receiving up to 5,500 tonnes a day and having the added challenge of requiring barges to be unloaded within 12 hours, the project team successfully completed the works without any delay to the tunnelling.”

This latest project is part of Land & Water’s continued commitment toward safeguarding the environment whilst also investing in UK infrastructure to build sustainable solutions. The west section of the Thames Tideway Tunnel project has contributed over 450,000 tonnes of material to Rainham. This will encourage greater areas of greenery along the Thames Corridor, will see up to six million tonnes of wet and dry spoil material imported to create an oasis for birds and wildlife alike.

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Why Local Plans Are the Answer to Engaging Communities

The proposed shake-up of the planning system has seen some mixed reactions. In the recently launched planning white paper, the government sets out a new approach based on zoning certain areas, marking some for ‘substantial development’. With change comes scepticism and fear, and there are concerns this will leave many developers free to run riot.

While some of those fears are legitimate, the overhaul of the planning system, if it’s done in the right way, could actually give local communities a bigger opportunity to influence development in their area. Perhaps more than they have ever been able to before.

Engaging communities at the start of the planning process

Under the current system, when residents and communities object to planning applications they are usually engaging too late in the process to make a difference. There is a common misconception that the best time to object is at the point of application, but this simply isn’t the case.

Planning applications are approved, or not, on the basis of the planning policies set out in the Local Plan. So, for instance, if a group of local residents object to a building during the planning application process, the objection will only normally hold weight if it points to the policies that are not being met.

Most communities aren’t aware of Local Plans, and the white paper presents a great opportunity for local authorities to promote their importance. Doing this would mean more  engagement with local residents, not less. This engagement would also be more meaningful, allowing communities to have a say in how planning policies are shaped.

Residents can look at and discuss the types of developments deemed to be acceptable, where they should be, and the infrastructure needed to support them. As well as things like the number of affordable homes to be provided.

Digitising Local Plans

With the potential introduction of zoning and permitted development within growth areas, the criteria set out in Local Plans has never been more important. There is a huge role for digital to play when it comes to producing and developing plans, and in engaging communities.

lf local communities are to have a voice in new developments and the shape of the places they live, Plans need to be readily available and easy to understand. This certainly isn’t the case currently.

Often important information in Local Plans gets tucked away in 200 page pdfs on local planning authorities’ websites. It’s hard to find the latest policies and easily understand what stage an authority is at during its plan making.

At present, there’s no standard structure for Local Plans and their policies are often difficult to read, compare and measure. This also makes it hard to build a picture of planning policy on a regional and national scale.

Getting the most out of planning data

Now is the time for central and local government to start thinking about how they use digital solutions, and about creating standardised policy and development information that gives all stakeholders the ability to understand what constitutes a compliant and non-compliant development.

Having consistent, machine readable data that ties into the original policy allows local planning authorities to remain accountable guardians of Local Plans. It also opens up opportunities for neighbouring planning authorities to work together to develop joint plans or easily view how other authorities are addressing issues.

The ability to trace different components of new developments back to the original planning policy is crucial. It allows local authorities to measure how compliant a development is and act quickly if it falls outside those parameters. Like tracking affordable housing requirements and ensuring that individual homes are pegged to the policies they are serving.

The impact of land values on proposed developments

It’s important to say at this point, that although there are potential benefits from the government’s proposals, in my view they are based on a largely false premise. That premise is that difficulty obtaining planning permission is one of the root causes of the housing crisis.

Gaining planning permission can be lengthy and complex, but there are a lot of developments that have received planning permission and just haven’t been built. In fact, recent analysis by Shelter and the House Builders Federation shows that 40 percent of homes granted planning permission in England go unbuilt. That backlog of unbuilt homes has grown by 100,000 in the last year alone.

Land owners don’t always apply for planning permission because they want to build. Instead they can use it as a way to increase the value of the land for resale. Investing in actual construction is an additional cost and often more risky. There’s an argument to be made that land values are at least as much to blame for holding back building, as the planning process itself.

This is why digital Local Plans have such an important role to play in setting the guidelines for future development. It goes hand in hand with the need for live data that gives local authorities the ability to see how effective or ineffective a development is in meeting the needs of the residents they serve. Including knowing if the agreed development has actually been built.

The golden thread starts with the Local Plan

When people start looking at joining up data in the planning system, they often make the mistake of thinking the journey begins when a planning application hits a council’s inbox. It needs to start some way before that with the development of Local Plans, particularly in this new era where they carry so much importance.

The way to avoid the fears and concerns raised by many about the planning white paper – of disempowering local communities and the shift of too much power towards developers – is to get the digital infrastructure right.  Only by doing that can we ensure communities are able to have a real say in what happens in their local area and developers can be held properly to account, as we modernise the planning system and open it up to the market.

Alex Yedigaroff, Head of Transformation at dxw.

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Winners of APM Awards 2020 Announced

The winners of the annual Association for Project Management (APM) Awards have been announced at a live virtual ceremony which took place on Monday 16^th November 2020.

The APM Awards recognise the very best within the project profession, from aspiring young project managers to complex and transformational projects and programmes, both in the UK and internationally.

This year, Lieutenant General Tyrone Urch CBE, Commander Home Command and the Standing Joint Commander (UK), was awarded APM’s Outstanding Achievement Award for his pivotal role in leading the Ministry of Defence’s support of the NHS in the building of the Nightingale Hospitals during the ongoing COVID-19 crisis. This award recognises the work of an individual in the field of project management, who has delivered something extra special in their role.

Lt General Urch and Standing Joint Command received its first order from the Government to support the COVID-19 response on 28^th February. Following that order, 20,000 soldiers – mostly from the British Army – were stood up for the task which was named Operation Rescript, to build the Nightingale Hospital at Excel in London.

In just 72 hours, Lt General Urch’s troops had managed to build 40,000 beds by working round the clock in three shifts. The NHS also called on Standing Joint Command to build the wards and deliver the oxygen. Within 10 days, the London Nightingale was built through the efforts of Standing Joint Command, the NHS, and civilian contractors.

On accepting his award, Lt Gen Urch said: “It has been a challenging project, there’s no doubt about it, it was a crisis that touched the entirety of the UK.  It was complicated but nothing beyond the armed forces and being able to deliver it, and our military men and women did some amazing work on the ground.

“Bringing 36 years of experience in the army, and project delivery training has, in a programmatic sense genuinely delivered success.   It’s a great honour and a privilege to receive the recognition, but I receive it on behalf of all the amazing men and women in the Royal Navy, the British Army and in the RAF.”

Debbie Dore, Chief Executive of APM, said: “I would like to congratulate Lieutenant-General Urch on winning this award for his efforts in delivering one of the largest national response projects the country has seen.

“Our awards are all about celebrating the outstanding successes and achievements of the project profession, made all the more significant by the unprecedented challenges posed by the COVID-19 pandemic. I would like to congratulate all of this year’s award winners and finalists. They are a true reflection of the growing talent within the profession.”

APM also recognised projects involved in the COVID-19 support response this year including Babcock for its involvement in the Ventilator Challenge UK (Zephyr Plus) which won the Mike Nichols Award for Inspiration. Babcock was asked by the UK government to help design, procure and assemble ventilators in the fight against COVID-19. The project team stepped up to the challenge, working relentlessly for 87 days straight to deliver outcomes no one believed were achievable. Within five days, a working prototype was in place, and by day seven, they presented the working concept with proposed delivery schedule of 10,000 units by the end of June.

HMRC won Programme of the Year for its COVID-19 Programme, the Coronavirus Job Retention scheme (CJRS) which launched on 20^th April. It has benefited over 1.1m employers and 9.1m jobs have been furloughed, paying out nearly £22bn.

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Hydrogen Heating Demonstration Takes Place

The first houses heated by hydrogen gas have been showcased with the use of innovative prototype boilers.

Boiler manufacturers Baxi Heating and Worcester Bosch have installed burning boilers at ‘HyStreet’, in specially built demonstration houses at DNV GL’s specialist test site at Spadeadam in Northumberland.

The site has been used to complete over 200 tests, researching and proving the safety of converting homes and gas networks to hydrogen.

The project is part of H21, a Network Innovation Competition project that is sponsored by Ofgem. Northern Gas Networks is leading the project with partners Cadent, Scottish Gas Networks, Wales & West Utilities, National Grid, DNV GL and the Health and Safety Executive’s science division. H21 is demonstrating how existing natural gas networks can be repurposed to safely carry 100% hydrogen. For the first demonstration, Worcester Bosch and Baxi Heating have installed combi boilers into the houses on HyStreet. These boilers have been developed as part of the UK Government-funded Hy4Heat programme, which also supports the development of hydrogen-ready gas cookers, fires and gas metres.

Currently, around 85% of UK homes rely on natural gas for heating and hot water. Repurposing the natural gas grid for use of hydrogen would mean a low disruption option for homeowners to decarbonise their heating without the need for extensive changes to their existing system.

Tackling carbon emissions resulting from home heating is utterly essential and one of the most difficult challenges in achieving net-zero emissions, given the need to make adaptations in almost every home. A growing library of studies and reports conclude that all viable scenarios for the UK to hit net-zero include hydrogen as a vital component. That is why Government and industry are working on various projects across the UK.

Tim Harwood, Northern Gas Networks’ Project Director for H21 said: “Seeing the boilers in situ at Spadeadam is an exciting step in the journey to realising our goal of a gas network transporting 100% hydrogen to customers. The hydrogen boiler looks and feels just like the natural gas version we all have today and is just as user-friendly, showing that a transition could cause minimal disruption to customers.”

Dan Allason, Head of Research and Innovation, at DNV GL’s Spadeadam Research and Testing said:  “Eight out of ten homes in the UK use a gas boiler to heat their homes and provide hot water and replacing all gas boilers with electric alternatives could be extremely costly. Both of the boiler manufacturers have developed options with their hydrogen ready prototypes to assist the switch to a lower carbon alternative.

“Having these fitted to the HyStreet demonstration project at Spadeadam gives gravitas to the proof of concept and public acceptability of appliances such as these. The boilers are one of the first important steps”

Karen Boswell, Managing Director of Baxi Heating, said: “This is an important step forward on our hydrogen journey and we are delighted to be able to demonstrate this innovative new technology in a real life setting in the UK”

Carl Arntzen, CEO of Worcester Bosch, commented: “It is fantastic to see our prototype hydrogen boiler running successfully at this demonstration site.  The boiler has operated seamlessly in its first month of operation and continues to provide both heating and hot water.

“It proves that hydrogen gas has great potential as a zero-carbon alternative to natural gas for heating and hot water in the UK and beyond.  These initial tests are incredibly encouraging and will hopefully give key decision makers confidence to deploy hydrogen gas as a fuel for the future.”

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Pioneering Collab To ‘Shake Up’ Construction

A groundbreaking new collaboration aimed at transforming the future of the UK’s construction industry can be unveiled.

National framework provider Pagabo has forged a research agreement with the University of Sheffield Advanced Manufacturing Research Centre (AMRC), aiming to together challenge current methods in the construction sector, and pioneer fresh ideas and innovations that embrace new technology and advanced manufacturing methods.

Joining them in the venture are C4DI, the Hull-based incubator company that promotes growth in tech businesses, specialist data centre company Yondr and industry leader Lord Bob Kerslake.

Just a few weeks into the new relationship, vital research into harnessing technology to streamline health and safety methods on construction sites is already under way.

Gerard Toplass, executive chairman of Pagabo, said: “Everyone agrees that construction is a sector that has been left behind in terms of new ways of working and innovation. Many methods in construction have been used for decades.

“What we want to do as a group is to totally shake up the construction sector – and create real change to drive economic growth and establish the UK as a global innovator.”

He said that Hull-based Pagabo was so committed to the use of new methods that it had created The Future of Construction (TFOC) initiative to drive industry-wide collaboration to shape the sector’s future.

“It’s vital that we think about the industry as a whole and how we can promote new technologies to improve how we do things,” he explained. “The construction sector needs a revolutionary moment – similar to the aerospace industry when it created the ‘black box’.

“This new collaboration between Pagabo and the AMRC will bring the sector together, unify common objectives and drive forward real change. We will be building an enterprise that seeks to leverage new techniques, innovation and automation.

“We intend to build on the government’s agenda for value, procuring for value and its ‘build, build, build’ initiative. But we also want to foster a new way of doing this that future-proofs the construction sector, secures jobs and builds sustainably – with economic, social and environmental processes in mind.”

The University of Sheffield AMRC is a network of world-leading research and innovation centres that work with manufacturing companies of all sizes around the globe. It has particular strengths in the automotive and aerospace industries.

Its pioneering research develops innovative methods that are of practical use to the manufacturing industry. The organisation transforms industrial and economic performance by making step changes in productivity, increasing competitiveness, developing new products and processes and training new talent and skills.

Steve Foxley, CEO of the University of Sheffield AMRC, said: “We see construction as a wildly exciting and opportunity-filled industry to benefit from our learnings over the past 20 years.

“We want to work closely with Pagabo to create a real catalyst for change. Pagabo has a unique and important role within the industry as a framework provider and has influence across a wider portion of the industry via its ecosystem of contractors and supply chain partners.

“We will be learning from the automotive and aerospace industries and seeing where we can adapt methods and innovations that would work in the construction sector.

“We want to look at areas like enterprise architecture, the future of buildings in a digital world, and how standards and interfaces will enable the digital world in construction.”

Lord Kerslake, the former head of the civil service, is a non-executive chairman of Pagabo who helped forge its relationship with the AMRC, seeing an opportunity to transform the construction sector through the sharing of expertise and collaboration.

“Research and development remains low in construction,” he said. “And there is very little collaboration on this among key players in the industry. Combined, we want to make a real and transformational difference in construction within the next ten years.”

He said one of the biggest objectives was to feed into the government’s levelling up agenda to create a more level economic playing field across the UK.

“This is a project which sees innovation and development and research in the construction sector happening up north, in Sheffield and in Hull, with a huge focus and drive for economic growth. This new collaboration between Pagabo and the AMRC is hugely powerful.”

John Connolly, managing director of C4Di, said the research agreement is powerful because of the way it will accelerate new ways of partnering on innovation.

He said: “There are interesting models of innovation happening around the country, but the AMRC is the exemplar of how to bring large industry bodies together. Their experience harnessing the mental horsepower of large academic institutions and collaborating with industry to drive change is incredibly exciting.

“This new research agreement benefits everyone. Leveraging learning and experience from the AMRC, and Pagabo’s connections within construction is a formidable force. The AMRC brought large industry players together to solve their challenges and Pagabo and its TFOC model builds on that; this is an exciting next step to extend the work of both organisations through collaboration.”

Dave Newitt, CEO of Yondr, the specialist data centre operator, is involved with Pagabo and its TFOC initiative. He said: “We believe that construction has a great deal to learn from manufacturing,” he said. “We want to look at modularisation and taking works off-site – so, building off site rather than on site. It’s how the manufacturing world operates, and we want to emulate that to improve productivity.”

Professor Rab Scott, head of digital at the AMRC, said that in just four weeks, the new collaboration had already created change.

“We have already started working with Pagabo on health and safety on site and looking at ways of using digital technologies to streamline processes. In terms of results, if we can prevent one accident or one hour’s lost time, it has an immediate benefit, and our work is immediately scalable.

“The diversity in the team is one of the great things that makes me get up in the morning. We are proud of what we are doing and what we are going to do. It is about meaningful relationships, and this is just the start of the journey.”

The collaborating team is to meet throughout the year to monitor progress. It will announce further steps later this year and is planning a conference in Hull early next year.

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Telford & Wrekin Overhaul Planning System

DEF Software has announced that it will be collaborating with Telford & Wrekin Council to create and launch a new back office development platform which will result in the next generation of building and planning control software.

Telford & Wrekin has instructed DEF Software to write the new system which is to be a true web-based application, meaning the platform will be easier to deploy and access. It will also be completely customisable for the Authority. The system will also have the ability to be accessed on any device from any location, promoting mobile working through on-site data capture.

DEF is aiming to recreate the speed and functionality of existing on-premises planning application platforms, which is something that other web-based planning systems have not been able to achieve. The redesigned web-based system will put the user at the centre of the software, by offering users an entire toolset in one place, creating better workflows as a result.

Tasks and work lists will be dynamically organised and available to view on the dashboard. It will also be designed to be role relevant based on the user’s specific job requirements, allowing individual users to see how many different applications they have live, giving a real time snapshot of their entire workload in one place.

This new system will bring together the best features of the two current systems, while also enhancing and pushing the technological boundaries even further. It will replace Telford & Wrekin Council’s existing legacy software and, as part of the agreement, the Council will provide consultancy to DEF Software throughout the re-write and will be fully involved in the design and development process.

A spokesperson for Telford & Wrekin Council stated: “We are looking forward to creating the next generation planning and building control system which will improve the functionality of the service, benefitting both officers and the public and providing a better user experience. We recognised that DEF Software shares the same desire and commitment to make a real positive change in the marketplace. It is also coming at a time when the planning landscape is changing, and we will be in the right position to bring these all on board.”

Graeme Cooke, Commercial Director at DEF Software, added: “Some of the software used to determine planning applications is decades old, and there is a desperate need for modernisation which simply isn’t being addressed in our industry. This solution will challenge everything that planning software should be. Having Telford & Wrekin on board as not only a customer, but as a strategic consultant, means the software will be extremely reactive to the needs of planners in local authorities.”

As part of the new development, DEF Software will also be re-writing its other modules which include Local Land Charges, Tree Preservation Orders, Listed Buildings, S106 Agreements, CIL, Road Adoption, Consultation Response and Private Sector Housing. The project with Telford is expected to last between two and three years, and the new platform will be available to existing DEF Customers on a five-year upgrade plan.

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Homes Set to Be Built Next to York Station

Work to lay the ground for 6,500 new homes along with a commercial development in York city centre is set to start in early 2021.

Councillors have voted in favour for the first phase, backed by £77 million of Government funding, on 45 ha of land next to the city’s station. This site is one of the largest brownfield areas in England and it is estimated its development will create 6,500 new jobs.

York City Council Leader Keith Aspden said: “This is another vital step towards delivering the York Central scheme and unlocking a £1.16 billion boost to our economy, including a new generation of jobs and hundreds of affordable homes when York needs it most.”

A new bridge system over the East Coast main line will also offer access to the site, which is encircled by railway lines. Drainage systems will be laid to allow for new parks, cycling and pedestrian walks to be built.

Homes England and Network Rail support the development through land acquisition and master planning and will now oversee the infrastructure projects.

Network Rail Group Property Director Stuart Kirkwood said: “With our partners, we are excited to progress such a positive development for York which will deliver housing, jobs and economic growth. Unlocking under-used railway land is a core part of our strategy, helping to create great places for businesses and communities to thrive.”

The contribution of £77 million in Government funding is part of a wider £155 million funding package pulled together by the City Council and includes £23.5 million to transform the front of the railway station. Along with this, improved visitor access to the National Railway Museum is also planned.

Brokers Hank Zarihs Associates said that the project was exactly the type of initiative property development lenders would be keen to invest in.

The City Council also formed a development partnership with Homes England, Network Rail and the Railway Museum four years ago in order to bring the empty land back into use.

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Business Reaction to Spending Review

Following on from the Chancellor of the Exchequer’s, Rishi Sunak’s spending review yesterday, November 25^th, 2020, where he announced spending in infrastructure, housing and levelling up the nation, here are some business reactions:

Steve Radley, CITB Policy Director, said: “The Chancellor’s commitment to a large increase in infrastructure spending next year and publication of the National Infrastructure Strategy give the construction industry greater confidence about the future work pipeline. It is now critical that the right skills and training interventions are put in place to help people benefit as a result of this investment and give the industry the skills it needs.

“A new route from FE into industry, through the expanded construction Traineeship, reform of the Apprenticeship Levy and the prioritisation of construction skills in the Government’s National Skills Fund and new Levelling Up Fund will be essential in doing this.”

Donald Morrison, People & Places Solutions Senior Vice President Europe at Jacobs said:

“It’s good to see a long-term, sustainable, infrastructure strategy – not just for our industry, but for rebalancing the economy as a whole. Creating social value is vital for levelling up. We must attach outcome-focused goals to all infrastructure funding promises. Now is the time to ‘think think think’ before we ‘build build build’ to make sure we’re designing infrastructure that will be of long-term benefit to all of us all economically, environmentally and socially.”

Debbie Dore chief executive of APM said: “We hope this announcement will provide the long-term pipeline of infrastructure and other strategic projects needed to turbo-charge recovery and a sustained future pathway for successful delivery.

“As the Chancellor said, “projects must have real impact.” We agree, but this commitment must be backed by investment in the skillsets and training essential to underpin this.  Greater investment as well as focus on project professionalism will be required to support the proper inception, delivery and completion of projects both now and in the future.”

Jamie Johnson, CEO, FJP Investment said: “With spending cuts and tax reforms on the horizon, investors will be retreating to assets that are secure, resilient and have the potential for long-term capital growth. This partly explains why the property market is alive with activity.

“We are seeing many people eager to take advantage of the stamp duty holiday by investing in bricks and mortar. As a result, house prices have been rising at an impressive rate – a reflection of an asset high in demand and limited in supply. I expect this to remain the case well into 2021.

“Importantly, infrastructure spending remains a core policy commitment, with billions pledged for upgrades and the construction of new-build homes. The government knows that any attempt to bring about the UK’s post-pandemic recovery needs to include measures that promote investment into property and infrastructure. As well as being a key election pledge that Boris Johnson will be keen to honour, putting public funds into such developments will also promote economic growth and productivity.”

Rain Newton-Smith, CBI Chief Economist said: “Stark forecasts point to tough times ahead. But through his statement, the Chancellor has made some bold autumn decisions to power a Spring recovery.

“The Spending Review lays the foundations for a brighter economic future. A new National Infrastructure Bank, long-term funding for innovation, and a comprehensive plan for creating jobs and renewing skills are just some of the building blocks needed to deliver on this vision. It’s right to take this opportunity to plan for tomorrow.

“But ambition must be matched by action on the ground. The Government’s commitment to build, build, build must be delivered now. This means a clear strategy to upgrade the UK’s infrastructure and publishing the Energy White Paper.

“And there can be no let-up in the support for firms facing new COVID restrictions. Firms need help to survive, then thrive. Business investment and confidence can be the engine of UK growth, creating jobs around the UK.” s

On infrastructure Rain Newton-Smith, CBI Chief Economist said:

“We know just how vital refreshing our ageing infrastructure is to repower the economy, connect more people and create job opportunities across the UK. Putting money into roads, broadband and clean energy will help do just that.

“Most importantly of all, the Government has set out its stall for the long-term by creating a National Infrastructure Bank. With the right remit, the bank has the potential, to crowd in the private finance that will be crucial to delivering these new projects.”

On levelling up Rain Newton-Smith, CBI Chief Economist said: “Local authorities and businesses have been waiting a long time to hear how EU structural funding will be replaced from 1 January. They will be encouraged to see pilot programmes launched for the UK Shared Prosperity Fund alongside the Levelling Up Fund. Both will help deliver improvements in communities across the country.”

Alex Vaughan, Chief executive officer said:  “Infrastructure investment needs effective and agile governance, structure, and processes to ensure it can realise the desired economic, environmental, and social return behind the Government’s vision announced in the spending review. At Costain we believe that exceptional programme leadership is critical to the safer, better, greener, faster and more efficient delivery of infrastructure projects and key to achieving the sustainable operational performance required to not only bounce back from COVID-19, but thrive.

“However, no two areas of the UK are the same. Careful consideration of local as well as national aspirations will ensure the social, environmental and economic value of infrastructure projects delivers the Government’s vision to level up, decarbonise and meaningfully improve the lives of local communities. Costain has been improving people’s lives for more than 155 years and we look forward to continuing our support to the Government in strengthening the UK’s place in the world.”

Peter Tooher, Executive Director, Nexus Planning Manchester said: “The Chancellor’s emphasis on the importance of place in driving the economic recovery is to be welcomed. The Levelling Up Fund, alongside changes to the Green Book, will create new opportunities for the North and Midlands to capture a larger slice of infrastructure and regeneration investment. However, it will be important that these place-based programmes are joined up by the National Infrastructure Plan and underpinned by a balanced, national approach to managed housing growth.”

Sean Keyes, managing director of civil & structural engineering firm, Sutcliffe, which has offices in Liverpool, Manchester, North Wales and London, said: “I absolutely welcome this commitment from the Government. The way big spending projects have traditionally been assessed has been a longstanding issue in this country that has facilitated a north-south divide. I have always said that the social value of these projects should be taken into more consideration – not just monetary. Then and only then will we see the areas that need these projects the most get a bigger share of the pie.

“Again, I am pleased to see a spending pledge for the NHS. As healthcare specialists, we see first hand the need in this country for good quality healthcare facilities – hospitals are underfunded, there is no getting away from that fact. We need bigger, better hospitals, with more staff, especially as the country faces a health crisis once the effects of the pandemic subside. All I would ask is that hospital spending is done in a strategic way so we avoid other PFI disasters.

“With regards to the £4.6bn package to help hundreds of thousands of jobless back to work – all I would ask is that this is targeted towards SMEs. The majority of companies in this country are SMEs and it is they who will react the quickest, creating quality, skilled, professional jobs for the unemployed.”

Darren Caplan, Chief Executive, Railway Industry Association, said: “It is positive to see the continued commitment by Government to transport infrastructure, with the announcement of a new infrastructure bank, the publication of a National Infrastructure Strategy, the commitment to publish an updated infrastructure pipeline, and a £4 billion fund for local improvements. In the coming years, investing in rail will be vital and, as outlined in our recently published ’10 reasons to invest’ report, we should be confident that following the Coronavirus pandemic, passenger and freight numbers will return to the network.

“We look forward to seeing the National Infrastructure Commission’s Integrated Rail Plan on HS2, Northern Powerhouse Rail, Trans Pennine Route Upgrade and Midlands Rail Hub, and the outcomes of the Williams Review into the structure of the industry. In this time of such uncertainty, clarity and visibility from Government is essential, so publishing these plans and updates on key projects will ensure the rail industry is able to prepare and deliver, ultimately supporting the ‘Build Back Better’ agenda and the economic growth and investment the UK needs right now.

“However, the Railway Industry Association and its members will be concerned that the Spending Review didn’t provide an update on specific rail schemes, particularly those in the Rail Network Enhancements Pipeline. We have been campaigning for Government to ‘Speed Up Rail Enhancements’ as part of our SURE initiative, but we have now been waiting over a year to hear news about what enhancements projects are going to be taken forward and when. Despite supposedly around 80 schemes on this list, we are still no nearer knowing which ones are to be progressed. We urge the Government to publish its update on the RNEP as soon as possible.”

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What Spending Review Means for Construction

The UK Government has spent a lot of time talking about ‘levelling up’ the UK by investing in construction and infrastructure.

On 25 November, the Chancellor of the Exchequer, Rishi Sunak, set out his Spending Review. Whilst focusing on the recovery from the Coronavirus pandemic, education and wages for those in the public and private sector, Mr Sunak also outlined what it would mean for construction and infrastructure.

In this Spending Review, the Chancellor revealed a once in a lifetime investment in infrastructure throughout the United Kingdom, as well as announcing the anticipated National Infrastructure Strategy. The National Infrastructure Strategy sets out the Government’s plans to ‘level up’ the country and achieve net zero emissions by 2050.

There will be a record £100 billion in capital investment next year, the largest sustained investment for more than 40 years and a £27 billion real terms increase compared with 2019-20. There is also to be a massive investment in funding infrastructure of everyday life, including better roads, cycle lanes, and improvements to rail travel.

Mr Sunak was also quick to highlight that there would be improvements to school infrastructure, and that 500 schools will be rebuilt within the next five years. As well as this, he reiterated the Prime Minister’s promise for better health infrastructure, by building 40 new hospitals, and upgrading 70 throughout the nation.

He also put forward plans to further the levelling up of Britain, by launching a new £4 billion Levelling Up Fund, which will invest into local infrastructure and will help have a visible impact on people and their communities. This new fund, overseen by the Treasury, Department for Transport and the Ministry for Housing, Communities and Local Government, will see a new, more holistic approach taken to projects.

The Chancellor also said that the Government would be investing in 800 zero emissions buses, 5 million people would gain access to faster broadband and there would be better mobile coverage and 4G access across the whole of the UK.

Finally, Mr Sunak announced the creation of a new UK Infrastructure Bank, which is to be headquartered in the North of England, and will work in partnership with the private sector to help finance new investment projects throughout the country in the spring of 2021.

When it comes to housing, the Government has already committed to simplifying the planning process to help get the homes Britain so desperately needs built. In addition, Mr Sunak confirmed nearly £20 billion in multi-year funding – £7.1 billion for a National Home Building Fund on top of the £12.2 billion affordable homes programme.

Brian Berry, Chief Executive of the FMB, said: “Local builders stand ready to support a strong and green economic recovery, but the statement from the Chancellor today fell far short. We look to the National Infrastructure Strategy for more detail, but no mention in the Chancellor’s speech of low carbon homes or green jobs is unacceptable given the challenges we face. Confirmation of investment in further education and skills is welcome, as is the announcement of the National Infrastructure Bank. It’s important that local builders have access to both, if they are to provide the jobs, homes and growth the country needs coming out of the pandemic.”

Mr Berry concluded: “This year more than ever we have all appreciated how important it is to have a decent place to live. SME house builders stand ready to deliver more sustainable and beautiful homes, in each community and on small brownfield sites. I welcome the extra support from the Chancellor with the announcement of the National Home Building Fund and confirmation of Help to Build. Extra funding is welcome, but without urgent investment in our local authority planning departments to speed up decisions, projects are struggling to get off the ground.”

Overall, the Spending Review gives hope for many, after such an unpredictable 2020. Mr Sunak has certainly set out a plan for extensive investment to ‘level up’ the UK at a time when the country needs it most.

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Using Virtual Technology to Build Back Better

John Kitchingman is Managing Director of EuroNorth for Dassault Systèmes. In this latest feature for UKCO, he writes about the construction sector using virtual technology as part of the UK Government’s ‘Build Back Better (and Greener)’ campaign.

As the construction sector recovers from the double-whammy of COVID-19 and the recession, it is vital that it recognises that its traditional processes are no longer fit for the modern world and need a radical overhaul. The construction industry has faced a difficult year causing major problems for the sector. At the beginning of the first national lockdown, many construction sites were forced to close and construction output saw its sharpest decline in recent memory. This did improve and as lockdown measures started to lift, UK builders reported their strongest monthly rise in activity in almost five years in July. The Prime Minister has also placed the construction industry at the centre of his government’s “Build Back Better (and Greener)” campaign.

The global construction industry is estimated to be responsible for between 35 to 45 per cent of CO2 released into the atmosphere, making it a major contributor to global warming. Given the UK’s commitments to reduce greenhouse gas emissions and fight climate change, the industry urgently needs to adopt more sustainable methods. Virtual technology and a data centric approach are key to ensuring the sector recovers in a sustainable way.

Using data to create efficiencies

Pre-lockdown, around 35% of construction projects ran over budget. This leads to massive waste of resources, including materials and money, leading to many project owners looking for ways to become more efficient. These project owners need a design and construction process that puts as much focus on meeting the budget as it does on the lifecycle costs of the physical asset.

These long-term cost and material savings depend on data.  The development and maintenance of a physical asset from design through fabrication to operation and maintenance can only be managed with accurate data that sets a baseline and clear trajectory for improvement. Data is at the heart of process improvement and expected at every stage of the project.

This increased use of reliable data will help the sector to reduce waste and to boost the quality from design to construction, for instance, defining modular assembly components integrated in a variety of product lines. Modularity will allow to address the complexity of upcoming projects while addressing increasing customization and sustainability needs, as well as match high market variability.

Digital twin technology

A digital twin is a virtual version of a process, product or service, which creates a two-way link between the physical and virtual world. The twins work by interrelating data and controls from across an entire eco-system, collected via platforms, databases and sensors and allowing it to interoperate. Digital twins also rely on statistics, machine-learning and artificial intelligence to understand and predict the operational state and behaviour of the real-life product or process.

Several industries are already benefiting from digital twin technology, including automotive, manufacturing, and most recently healthcare (see the Living Heart project as an example). Digital twins are also particularly useful for the construction industry because it requires real-time information to drive down costs, as well as boosting efficiency and productivity. The main benefit in construction is using digital twins to test virtual construction sequencing and logistics scenarios, which can lead to reduced construction and operating costs. Digital twin technology can also collect and monitor real-time data to optimise a building’s operational performance and sustainability, which can help to reduce the sector’s carbon footprint.

It is also worth mentioning that the most costly problems within the sector often appear once construction stops and commissioning begins. Many construction companies still traditionally perform commissioning with clipboards and a paper list of parts. Manually executing the commissioning phase this way wastes a considerable amount of time and requires more engineers to complete, in line with aggressive project timeframes. By leveraging digital twin technology, companies are able to generate digital commissioning procedures based on the digital twin model. Commissioning engineers are able to update the virtual twin in real time with onsite data, using mobile access via tablets for instance. This a crucial way to significantly improve on-site collaboration and de-risk projects.

Going beyond this, it is possible to connect the twins of different buildings and their construction sites with layers of infrastructure to benefit from the insight of a system of systems. This allows the industry to be able to create ‘smart cities’ as designers and town planners can interrelate event-driven data to gain insights into a ‘living’ city. Scenarios such as the impact of a new building on traffic flow or water and power supplies can be simulated to gauge how to go forward with town planning and put in place the appropriate measures to improve quality of living and help combat the effects of climate change, for instance.

The best way for the sector to become more sustainable is by embracing virtual technology and digital transformation. It is time to do for infrastructure, construction and cities what we’ve done for manufacturing, by taking a life-cycle style approach and leveraging digital technologies such as 3D visualisation for a true digital renaissance of the built environment.

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Grant to Deliver Infrastructure at Meridian Water

An agreement which will provide Enfield Council with £170 million in funding to deliver infrastructure to unlock the £6 billion Meridian Water Project has been signed by the Council and the Government.

Enfield Council has already secured planning permission for the works and approved a framework contract with three major contractors to deliver the works, which will provide parks, rail and road infrastructure. Along with these, there will also be cycle links, bridges, flood alleviation and utilities. Work is set to start n the site by Autumn 2021, with completion set for 2024.

The Council was announced as one of the recipients of Housing Infrastructure Fund (HIF) from the Ministry for Housing, Communities and Local Government (MHCLG) in August 2019. The HIF is a Government capital grant programme and is designed to unlock housing sites as well as helping to deliver new homes.

Meridian Water will provide 10,000 homes and 6,000 jobs when complete and will play a major role in tackling the housing crisis in Enfield. The homes will be marketed predominantly to local residents and the Council has repeatedly promised that local people will be the primary beneficiaries of the project.

The Leader of Enfield Council, Cllr Nesil Caliskan, said: “This is a vital stage in the delivery of Meridian Water and I am delighted that we are on the cusp of appointing partners to deliver the key infrastructure the transformational and ambitious Meridian Water project needs to be a success.

“All of our partners have demonstrated they possess the drive and excellence to help us make this project a success and this latest announcement marks a further step towards the creation of a special development in our borough.”

Minister of State for Housing Christopher Pincher said: “This Government is delivering the well-designed, quality homes our country needs and unlocking home ownership for a new generation. In order to build more homes, we need to provide the infrastructure and public services to match.

“Our £170m of grant funding for Enfield Council will help transform the Meridian Water site into 10,000 new homes, and ensure these homes are served by the cycle links, roads, and utilities needed to create a new thriving community in North London.”

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PM Outlines Ten Point Green Revolution Plan

The UK Prime Minister last week set out his ambitious ten-point plan for a green industrial revolution which is to create and support up to 25,000 British jobs.

The plan covers clean energy, transport, nature and innovative technologies, and Boris Johnson’s blueprint will allow the UK to forge ahead with eradicating its contribution to climate change by 2050, something which is particularly crucial in the run-up to the COP26 climate summit in Glasgow next year.

The plan is part of the PM’s mission to level up throughout the country and will mobilise £12 billion in Government investment to create and support up to 250,000 highly skilled green jobs in the UK, and spur over three times as much private sector investment by 2030.

At the centre of this blueprint are the UK’s industrial heartlands including the North East, Yorkshire and the Humber, West Midlands, Scotland and Wales. All these areas can drive forward the green industrial revolution and build green jobs and industries of the future.

The Prime Minister’s ten points area:

1. Offshore wind: Producing enough offshore wind to power every home, quadrupling how much we produce to 40GW by 2030, supporting up to 60,000 jobs.

1. Hydrogen: Working with industry and aiming to generate 5GW of low carbon hydrogen production capacity by 2030 for industry, transport, power and homes, and aiming to develop the first town heated entirely by hydrogen by the end of the decade.
2. Nuclear: Advancing nuclear as a clean energy source, across large-scale nuclear and developing the next generation of small and advanced reactors, which could support 10,000 jobs.
3. Electric vehicles: Backing our world-leading car manufacturing bases including in the West Midlands, North East and North Wales to accelerate the transition to electric vehicles, and transforming our national infrastructure to better support electric vehicles.
4. Public transport, cycling and walking: Making cycling and walking more attractive ways to travel and investing in zero-emission public transport of the future.
5. Jet Zero and greener maritime: Supporting difficult-to-decarbonise industries to become greener through research projects for zero-emission planes and ships.
6. Homes and public buildings: Making our homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028.
7. Carbon capture: Becoming a world leader in technology to capture and store harmful emissions away from the atmosphere, with a target to remove 10MT of carbon dioxide by 2030, equivalent to all emissions of the industrial Humber today.
8. Nature: Protecting and restoring our natural environment, planting 30,000 hectares of trees every year, whilst creating and retaining thousands of jobs.
9. Innovation and finance: Developing the cutting-edge technologies needed to reach these new energy ambitions and make the City of London the global centre of green finance.

 

Prime Minister Boris Johnson said: “Although this year has taken a very different path to the one we expected, I haven’t lost sight of our ambitious plans to level up across the country. My Ten Point Plan will create, support and protect hundreds of thousands of green jobs, whilst making strides towards net zero by 2050.

“Our green industrial revolution will be powered by the wind turbines of Scotland and the North East, propelled by the electric vehicles made in the Midlands and advanced by the latest technologies developed in Wales, so we can look ahead to a more prosperous, greener future.”

In order to deliver on six points of the plan, the PM has announced new investment, including:

Carbon capture: To revitalise the birthplaces of the first industrial revolution, the UK will be at the global forefront of carbon capture, usage and storage technology, benefiting regions with industries that are particularly difficult to decarbonise.

An extra £200 million of new funding to create two carbon capture clusters by the mid-2020s, with another two set to be created by 2030. This increased the total invested to £1 billion, helping to support 50,000 jobs, potentially in areas such as the Humber, Teesside, Merseyside, Grangemouth and Port Talbot.

Hydrogen: Up to £500 million, including for trialling homes using hydrogen for heating and cooking, starting with a Hydrogen Neighbourhood in 2023, moving to a Hydrogen Village by 2025, with an aim for a Hydrogen Town – equivalent to tens of thousands of homes – before the end of the decade. Of this funding, £240 million will go into new hydrogen production facilities.

Nuclear: £525 million to help develop large and smaller-scale nuclear plants, and research and develop new advanced modular reactors.

Electric vehicles: Following extensive consultation with car manufacturers and sellers, the Prime Minister has confirmed that the UK will end the sale of new petrol and diesel cars and vans by 2030, ten years earlier than planned. However, we will allow the sale of hybrid cars and vans that can drive a significant distance with no carbon coming out of the tailpipe until 2035.

The UK car industry already manufactures a significant proportion of electric vehicles in Europe, including one of the most popular models in the world.

To support this acceleration, the Prime Minister has announced:

£1.3 billion to accelerate the rollout of charge-points for electric vehicles in homes, streets and on motorways across England, so people can more easily and conveniently charge their cars.

£582 million in grants for those buying zero or ultra-low emission vehicles to make them cheaper to buy and incentivise more people to make the transition.

Nearly £500 million to be spent in the next four years for the development and mass-scale production of electric vehicle batteries, as part of our commitment to provide up to £1 billion, boosting international investment into our strong manufacturing bases including in the Midlands and North East.

Reacting to the Government’s publication of its Ten Point Plan for a Green Industrial Revolution, Ian Liddell-Grainger MP, Chair of the All-Party Parliamentary Group on Nuclear Energy, said: “I warmly welcome the Government’s commitment to build both large and small-scale nuclear reactors as a path to net zero.

“New nuclear power will dramatically cut our emissions and generate thousands of good, highly skilled jobs across this country. I look forward to the Government setting out the detail in the Energy White Paper, and getting new projects over the line.”

Kate Neale, Sustainability Director at Cadogan, said: “We welcome the Government’s announcement that it will invest £1 billion into making new and existing homes and public buildings more efficient, including the bid to bring forward the date by which new homes will need to be warmed without gas heating to 2023.

“The last few months have brought into sharp relief the importance of tackling the climate emergency, and Cadogan is more focused than ever on actively reducing our environmental footprint, and collaborating with our partners across both the Chelsea community and our supply chain, to find innovative ways to progress the circular economy and make rapid advances in meeting net-zero ambitions. We believe that the built environment has an essential role to play in achieving carbon neutrality, and this must be recognised and supported in any new government policies.”

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Transport SMEs Hard Hit by COVID-19

While construction was hit hard, other sectors have been feeling the impact of coronavirus too. Of the 544,000 SMEs in distress, the RealBusinessRescue.co.uk analysis reveals the industrial transportation and logistics sector (covering transport of all goods across air, land and sea) saw the biggest increase in troubled companies with a 14% leap from 11,909 at the end of Q1 2020 to 13,528 at the end of Q3 2020. The food and drug sector was close behind with a 12% increase from 12,951 in Q1 2020 to 14,444 in Q3 2020.

However, when it comes to job protection these two sectors are not the most concerning. There are 344,000 jobs held by the 86,000 support services businesses in distress and 271,000 people employed by 32,000 troubled health and education businesses.

Shaun Barton, National Online Business Operations Director at www.RealBusinessRescue.co.uk , said:

“These latest results demonstrate that while some bigger companies are finding their feet in this recession it is the smaller companies that are suffering the biggest impact. With the pandemic having pushed more than 40,000 into financial distress, the backbone of the UK’s economy is suffering and we could soon have a dangerously top-heavy economy. To put that figure of 40,000 more distressed SMEs into context, there were just over 17,000 corporate insolvencies in 2019 as a whole.”

“The role of these smaller companies is key, not only as key suppliers with a vast array of important innovations, but as employers to millions of talented people that will be vital to funding the economic recovery after the world has either adjusted to, or found a solution to coronavirus.

“Both SME and start up construction firms have a vital role to play in rebuilding the economy. So many businesses rely on them both up and down the supply chain. There is a pressing need to keep building in order to make sure that the UK doesn’t fall behind in providing housing for people and better infrastructure for businesses and individuals. The UK construction industry is so often seen as a bellwether for the economy, if we can see it moving again, the rest of the UK may follow.

“To do this small businesses, which have little or no cash reserves, need to get ahead of the game by considering restructuring action now so that when the creditors come calling they are in a good space. We can offer help on RealBusinessRescue.co.uk or on the phone to talk through the options such as CVAs, administration, or Fast Track CVAs for companies that were in a good profitable position before the pandemic. Alternatively, there is a good market for investors and buyouts. The only thing that business owners have to be wary about is that these investors are looking for a good deal in a down market. It’s an option for an exit, and it could be a good one, but expectations will have to be lower than before the pandemic.”

Fledgling transport start-ups failing to fly

According to the insight, the number of fledgling businesses (born in 2017 or later) in significant distress in the industrial transport and logistics industry (transporting goods by land, air and sea) increased by 27% (Q2 2020 2,305 to Q3 2020 2,925) with a 22% increase for the construction sector (Q2 2020 10,302 to Q3 2020 12,617) and 21% for the telecommunications and IT sector (Q2 2020 4,519 to Q3 2020 5,454).

These increases are even more significant since the start of lockdown. There are now 53% more transport and logistics start-ups in distress than at the end of March, and 47% more construction start-ups in distress since the start of lockdown. Surprisingly, the number of start ups in the bar and restaurant sector in significant distress has only increased by 35% – this is thought to be due to financial aid from government.

These large increases are also seen in the regions with 25% more Northern Ireland start-ups falling into significant distress in the last quarter (Q2 2020 1,141 to Q3 2020 1,425). There was also a 19% increase for fledgling businesses in the north east (Q2 2020 1,902 to Q3 2020 2,257) and 19% for those in London (Q2 2020 24,003 to Q3 2020 28,567).

Shaun Barton continues: “Fledgling businesses are also at risk and are most likely to have not had the experience of which direction to turn when finances become difficult. We are advising these businesses daily and would recommend that they find out all their options before making rash decisions. The UK is filled with talented entrepreneurs; the challenge now is to help them take the next step. If there are financial issues, insolvency isn’t always the only option. Even the biggest businesses restructure; it’s just whether they do it correctly. The options are there; SMEs just have to take the leap.”

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Pick Everard Appointed to Design New Prisons

Property, construction and infrastructure consultancy Pick Everard is to play an integral role in the design of four new prisons. The consultancy firm has been appointed by the Ministry of Justice (MoJ) to build new prisons in Yorkshire, the North West and South East of England as part of its New Prisons Programme (NPP).

The MoJ and HM Prisons and Probation Service (HMPPS) aims to deliver a decent, safe and secure estate which supports offender rehabilitation. These four new prisons will be designed with this in mind and will provide prison staff with the necessary tools to prevent offenders from being drawn into further criminal activity whilst serving their sentence in custody.

Operating under Perfect Circle’s unique collaboration, Pick Everard has been appointed as client designer for the project, with procurement and delivery being accelerated through SCAPE, the UK’s leading public sector procurement authority. SCAPE’s direct award and fully managed framework will also help drive collaboration, efficiency, time and cost savings over the four sites.

Tim Irons, Director of Architecture at Pick Everard said: ‘’We are delighted to have secured this role working in partnership with the MoJ to progress this significant building programme, which is the first MoJ client design appointment of this scale.

“Following the successful delivery of common designs at HMP Five Wells and Glen Parva, this next phase of intense construction activity will deliver not only much needed prison places for the MoJ, but importantly environments sensitively designed to bring the best possible outcomes for those passing through them as they reach the end of their sentences.

“We are continuously improving our solutions for resettlement focussed facilities to ensure they support both residents and staff to achieve more and are excited to now stretch the sustainability features of our designs to achieve BREEAM Outstanding and ambitious reductions in operational energy demand.’’

Robin Seaton, HMPPS Programme Director for New Prisons, added: “We look forward to working with Pick Everard and Perfect Circle as we embark on the design and construction of our newest prison builds. It is essential that we get the design right to deliver Ministers’ and HMPPS’ commitment to modernise and improve prisons, making them more secure and better equipped to rehabilitate prisoners. We are confident that Pick Everard will help us to meet these aims.”

The NPP will initially develop the design for four new prisons – the first of which will be located in Full Sutton, Yorkshire, with a further three locations to be confirmed. The Pick Everard team has commenced a baseline design review, which began last month (October). This will be followed by the development of a suite of reference designs, which will be used to deliver the four new prisons together with potential expansions of existing sites.

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Wates Appointed to Council Scheme

Wates Residential has been appointed by the London Borough of Hounslow Council to deliver 61 high quality homes to meet the growing demand for affordable housing in the borough.

The national contractor has been selected to deliver the new scheme as part of the local authority’s 5,000 Pledge to secure an additional 5,000 high quality and affordable new homes for local people by 2022.

Planning permission was secured in March this year, and Wates Residential is due to start work on the site in December 2020. This project includes the demolition of former sheltered accommodation which is no longer fit for purpose, and the construction of 61 new homes for social rent across three new blocks. Eight of these new homes will be wheelchair accessible.

Several initiatives have also been incorporated to help residents lead more environmentally friendly lives. These new homes will be all electric, which will remove the reliance on gas for heating and cooking, as well as offering an opportunity to use cleaner energy sources. It will also support London Borough of Hounslow’s drive to ensure that new homes in the borough are working towards net zero carbon.

The proposed plans incorporate green spaces for the local community, and will include a children’s play area, communal gardens and rain gardens, whilst maintaining the existing tree canopy.

As part of the project, Wates Residential and the London Borough of Hounslow have made a joint pledge to work together to increase education, skills and training opportunities, as well as boosting Hounslow’s local economy by employing local businesses. This will include a minimum of £2.6 million to be invested in the local community through social value activity.

Helen Bunch, Managing Director of Wates Residential, said: “We are looking forward to delivering these much-needed social rented homes for local people and building on our excellent relationship with London Borough of Hounslow.

“Local communities are at the heart of every project we work on so we are really pleased that our development will also leave a positive lasting legacy through our joint commitment to invest in creating training and employment opportunities.”

Andrew Smith, Assistant Director of Housing Development & Supply at the London Borough of Hounslow, commented:  “We are delighted to be commencing work at Burlington Close, Bedfont with Wates Residential to deliver a further 61 new family homes towards our Housing Pledge of securing 5,000 new affordable homes by 2022.

“The impact of the COVID-19 pandemic is particularly felt in Hounslow with reduced activity at Heathrow Airport leading to increased demand for positive assistance to the local community. We are delighted with Wates’ progress, despite the various lockdown and COVID restrictions, to get this scheme to site and in particular their commitment to local labour, training and enterprise”.

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Could There be Challenges for Construction Post-Brexit?

Stuart Dantzic is Managing Director of Caribbean Blinds, in this feature he talks about how he thinks the construction industry will be affected by Brexit.

As the United Kingdom embarks on its final stages of exiting the EU single market and customs union, the entire population is ensuring all measures are in place in preparation for the new rules that will be introduced from 1^st January 2021.

In addition to European travel being affected, UK citizens and businesses face major uncertainty, with many still unaware of the full extent of the possible implications on their industry.

Throughout the entire campaign, the construction industry displayed mixed views on the prospect of the UK’s departure from the EU, with specific concern about how it might affect the skills shortage, the import and export of materials, and regulations and standards. Whilst the industry must come to terms with the reality of the situation, we can still aim to be fully prepared for the challenges (as well as any opportunities) that Brexit will bring.

Supply chain

One of the single biggest challenges the construction industry will face following the UK’s exit from the EU will be to keep the wider supply chain flowing seamlessly. Maintaining a strong line of communication with key European suppliers will be vital in safeguarding against disruption to production, lead times and importantly, costs.

By considering an increase in stock holding levels, firms will not only be able to help limit potential delivery delays caused by stricter border control, but also allow for the opportunity to reduce transport costs (more raw materials in a single shipment) which can offset tariffs imposed on incoming goods.

Partnerships

Companies should also look to source parts from UK suppliers where possible, not only to minimise disruption but also to help support the UK economy. When it comes to sourcing raw materials, partnering with another firm in your sector can help split any ‘set up’ costs, reducing unit costs (due to higher volumes) and therefore increasing margins.

Furthermore, enhancing your product/service offering by recommending or working with companies in ‘complimentary’ sectors will help increase both brand and product awareness, growing sales and providing customer convenience as a result.

Imports & exports

It is likely that the construction industry will face specific duties or quantity limits on imports and exports post-Brexit. Although this could lead to a shortage of materials or alternatively, an increase in costs, it could also spur a rise in demand for UK-made products and welcome an influx of support for UK based enterprises as production capacity rises. Businesses can also continue to focus on their best-selling products whilst removing any stagnant lines, streamlining entire ranges as a result, and all whilst improving cashflow.

Short lead times on UK manufactured goods, combined with the possibility of relaxed planning on building works (such as extensions), could see an increase in home improvement projects across the country. The potential surge in sales enquiries, conversions and orders that UK construction and building firms could receive, will in turn require the appropriate staffing levels across roles ranging from sales to production to installation, helping to reduce unemployment figures in the long term.

Although it is unclear whether Brexit will permit UK-imposed tariffs on cheap steel imports from China (that have previously led to the decline of the UK’s steel industry), it is feasible that the UK will be able to introduce public procurement policies insisting on the use of ‘UK firms and materials only’, and eventually negotiate and develop its own trade agreements with China, as well as other large importers such as the USA.

To summarise, predicting how Brexit will affect the UK construction industry remains fraught with challenges, not least because, for the time being, existing EU rules continue to apply.

However, Brexit’s impact on construction for the country as a whole will be shaped by negotiations between Member States and the UK, with the political declaration featuring as the starting point for discussions.

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Highways England Begins Search for Partner

Highways England last week began its search for a contractor for its largest ever contract, the £2 billion package to build the longest road tunnel in the UK. The tunnel sits at the heart of the proposed Lower Thames Crossing, one of the most ambitious road projects for a generation.

The Lower Thames Crossing will see and improvement to road journeys and will almost double road capacity across the Thames in East London, with 14.3 miles of new roads, featuring two 2.6 mile-long tunnels. Work on the mega-project could start in around 18 months and would provide a huge and much-needed jobs boost to the UK infrastructure industry.

The Tunnels and Approaches contract includes design and construction of twin road tunnels under the Thames. At 16 metres wide, these tunnels are to be some the largest bored tunnels in the world. They would also be the longest road tunnels in the UK. The scope also includes the portal buildings, approach roads and the tunnel systems.

Matt Palmer, Lower Thames Crossing Executive Director, said: “The Lower Thames Crossing is the most ambitious road project this country has seen since the M25 was completed nearly 35 years ago. At a time of huge uncertainty for the industry, this contract shows our commitment to this project, which will support thousands of jobs during its construction and provide a huge economic boost to the UK economy when it opens for traffic.

“The scheme will relieve congestion at the Dartford Crossing by providing a new free-flowing road, almost doubling road capacity across the Thames and supporting sustainable local and regional economic growth.”

The Dartford Crossing, which was designed for 135,000 vehicles a day, often sees 180,000 a day use it, while it can take three to five hours for the roads to clear following a closure. In its first year, more than 27 million drivers are forecast to use the Lower Thames Crossing, providing much need relief at Dartford.

Keith Bowers, the Lower Thames Crossing’s Tunnels and Systems Director, added: “This contract is unparalleled in its ambition, and we need the right partner to match that ambition. From our bidders we’re looking for outstanding construction, health, safety and wellbeing performance. We have committed to targets that mean by 2040 nobody will be killed or seriously injured on our roads and motorways, and we need our contractors’ design and delivery to meet that target for our road users and workers.

“We are setting priorities in our contracts that will reward excellence during delivery by offering an enhanced share of cost savings for high performance in areas including health and safety, customer focus, delivery, environment, people and communities and economics.”

The Tunnels and Approaches contract is the first of three main works contracts to be procured for the scheme, with the Roads North and the A2 M2 contracts expected to be announced early in 2021. The Lower Thames Crossing is expected to create tens of thousands of new jobs during construction, including:

• Civil Engineers
• Archaeologists
• Surveyors
• Caterers
• Cleaners

The scheme’s planning application was submitted on Friday 23 October, and the Planning Inspectorate now has 28 days to review the application and decide whether to allow the application to proceed to examination. A decision is expected from the Secretary of State for Transport in 2022, with construction expected to start later that year.

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BPD Design First Carbon Neutral Bus Station

St Margaret’s bus station in Leicester is set to become the UK’s first carbon neutral bus station thanks to architecture and urban design practice BPD submitting plans to Leicester City Council.

The current bus station located on Gravel Street, originally built in 1940, is to be replaced by a modern, sustainable building. The new design will include LED lighting, mechanical ventilation with heat recovery, air source heat pumps and 750 square metres of solar panels which will generate enough energy to power the station and feed excess energy back into the grid. The building will also incorporate electric bus charging points and a new, fully glazed envelope in the concourse. This will maximise lighting levels and significantly reduce energy usage.

If plans are approved the designs will make the bus station will be one of the most energy efficient transport hubs in the whole of the UK, it will also be the first bus station to achieve net zero carbon status.

Tom Hewitt, architect director at BDP, said: “St Margaret’s Bus Station complements the neighbouring Haymarket station and is also the main terminal for inter-urban, regional bus and national coach services in Leicester – but the building is in serious need of modernising. Leicester City Council’s team asked us to significantly increase the quality and capacity of the building as well as the surrounding environment, so the designs we have submitted will totally transform the station and bring the area back to life. Not only have we designed an inner-city transport hub that is practical and beautiful, but it also meets the council’s goal of becoming the most energy efficient station in the country.”

Deputy City Mayor for Environment and Transport Councillor Adam Clarke added: “These exciting plans to replace St Margaret’s Bus Station with a striking, new and carbon-neutral building will signal the beginning of a revival of this part of the city. It will provide a huge boost for sustainable transport, help regenerate a run-down but important gateway into Leicester and attract further private investment into the city.”

The development project, named St Margaret’s Gateway, is a regeneration project supported by a £10.5 million from the Getting Building Fund, a pot of Government funding awarded to Leicester and Leicestershire Enterprise Partnership Ltd (LLEP), for shovel ready infrastructure projects to create jobs and support economic recovery across the country.

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Construction Output on the Up

Like many others, the construction industry has suffered greatly from the impacts of COVID-19. On 12^th November 2020, the Office of National Statistics (ONS) published their latest “Output in the Construction Industry Statistics” which reports a 41.2% decrease in construction output for April 2020, the UK’s first full month in lockdown. However, in each of the following months up to and including September 2020 there has been an increase in the volume of construction work reported. So, what has changed since April 2020 and why are we now seeing a steady increase in construction output?

The rise in construction output can be attributed to a number of factors.

There has been a major shift in the government’s approach to regulations and guidance (both north and south of the border) regarding construction operations. At the start of lockdown, the Scottish Government advised that all construction operations should cease unless they involved what were deemed to be ‘essential’ works. In England, however, construction sites were not advised to close, but there was great confusion about how they could safely stay open when initially the general advice was for everyone to stay at home. It is clear that in Scotland many contractors erred on the side of caution and closed down their construction sites despite not being legally required to do so, rather than facing the possible risk of mandatory shut down for breaching the government advice, and to also ensure the health and safety of their workforce.

As matters currently stand, construction sites are open in the UK, notwithstanding the current national lockdown in England, and in both Scotland and England the recently published COVID-19 tier maps appear to permit construction operations to continue even in the highest level of restrictions. However, as the situation is very fluid, the most up-to-date national guidance should be consulted for any country specific restrictions. The ONS Statistics tend to suggest that the publication of clearer industry guidance and an express confirmation from the UK Government that construction operations can currently progress has allowed for a greater capacity and scale of construction work to be performed. Other recent government legislative changes are likely to have had an impact upon the recent increase in construction operations including, for example, the temporary reduction of the stamp duty and land and buildings transaction tax thresholds which have been put in place until 31 March 2021. Announced in July 2020, these changes are thought to have had an impact on the demand for housebuilding and are supported by the statistics reported by the ONS which show a steady increase in private housebuilding work which is now exceeding pre-lockdown (February 2020) levels following a month on month increase from April to September 2020.

The key construction industry players themselves (employers, contractors, consultants, etc.) and how they have adapted to the “new normal” way of working are also responsible for the continued growth in construction output. When the first lockdown was announced businesses worldwide had no other option but to become increasingly digital and quickly comfortable with remote working or, where required, socially distanced working. Arguably one of the most difficult industries in which to do this is the construction industry given the type of work involved. How can an industry that relies upon individuals working in close proximity to others adapt to working remotely or at a safe distance from one another?

A variety of measures have been adopted. For one, the number of people on a site at any given time is being reduced, and previous on-site or office meetings are now being held virtually over video conferencing facilities.  In some cases, even site visits are being conducted virtually. Contractors are also changing the site working hours, working a longer day on site where this is possible. Some are also splitting their workforce into groups working different shifts, with the added benefit that the entire workforce is not being required to self-isolate if a worker in one group were to contract COVID-19 or be required to self-isolate. Contractors are now better equipped to carry out work in accordance with the COVID-19 guidelines, following a period of adjustment required in order to stock up on appropriate PPE, hand washing stations and re-programming of work so that there is minimal contact between workers on site.

We are also seeing a greater push to go contactless and an increased use in the available technology, where possible. Rather than exchanging papers and ID cards to register workers, there are mobile phone apps available which can make the registration process completely contactless. QR codes from the app can then be used for a worker to check in and out of site rather than risk the spread of contamination through keypads. There are now even wearable devices which allow employers to track the distance in between workers in real time to help ensure physical distancing is being maintained. Better planning and better use of technology have undoubtedly been a factor in the growth of construction output.

It is evident that the construction industry is seeing great change in where, when and how they work. Whilst we have highlighted some of those changes, it certainly appears that this is just the beginning and that the industry can look forward to discovering and implementing even more innovative ways of working in the future.

Amy McCalmont, Solicitor at Davidson Chalmers Stewart, Member of Globalaw

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