FTA Logistics Report prioritises investment in roads

Government should prioritise road improvements according to report.

The Freight Transport Association (FTA) has released its Logistics Report 2015 which highlights the importance in road improvement investment. 

One of the UK’s largest trade associations, FTA represents more than 14,000 members who provide or rely on transportation both nationally and internationally, to and from the UK. 

The Logistics Report, which mixes ideas, news and views that have been responsible for the transport industry in the last year, gathers its information from a wide variety of sources. 

Evidence has been attained from the FTA Logistics Industry Survey 2014/15 – a poll of members’ experiences of the freight market and trading environment – the FTA Quarterly Transport Activity Survey (QTAS), FTA Manager’s Guide to Distribution Costs, FTA Transport Manager Survey 2014, York Aviation, Implications for the Air Freight Sector of Different Airport Capacity Options 2015, FTA Logistics Carbon Review Incorporating the Fifth Annual Report of the Logistics Carbon Reduction Scheme 2015 and RepGraph: Solving the Driver Crisis 2015.

Added to this plethora of information are references to other official statistical publications throughout the report, so there is a huge spread of information within the Logistics Report. 

The report contains what many believe are the priorities for the Government and of all the reasons that were given, the one that was seen as most important is one that is interlinked with the construction industry. 

While a cut in fuel duty, promoting a positive image of logistics to young people and recognising the essential role of logistics to the economy were all seen as important priorities for the Government, the report suggests that the biggest concern is to ensure investment is given to make necessary road improvements. 

The responses reflect many of the concerns expressed a year ago to the FTA Logistics Industry Survey 2013/14. 

Many who were included in the report feel that the urban road network is deteriorating and this trend must be reversed. 

For its part, the Government announced intentions to invest £15Bn in road improvements back in December, which will deliver a network of smart motorways and expressways to support the Northern Powerhouse. 

The report was launched by David Wells, FTA Chief Executive, who believes that the Government needs to be decisive in order to safeguard the role of logistics in the country’s economy. Making sure that roads are invested in properly will only improve this. 

He said: “The new Government will have to make significant decisions – and quickly – over our infrastructure and transport policies. FTA’s message to Government is: ignore the needs of logistics at your peril. 

“From the factory floor to the kitchen table, it is logistics that will deliver sustainable growth. 

“At such a crossroads for our national finances and society, the FTA Logistics Report provides a timely and essential analysis of the short and long-term health of a major enabler of our economy and lifestyle – logistics.”

The FTA’s report has highlighted the significance in investing in roads, but encouragingly, this is something that is certainly in the minds of those in the Government. Last night, George Osborne spoke about his business plans and in that speech, mentioned investment in the road network. 

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Housebuilding starts on the rise in the March quarter

New starts are at their highest levels since 2007.

New housebuilding statistics have been released today that show building starts in England increased by 31% in the March quarter. 

Building starts for the latest quarter have been estimated at 40,300 which is almost a third better than the previous quarter and is 11% up on this time last year. 

The figures recorded in 2015 up to March show a 5% rise in new starts in comparison to the previous year, with 140,500 new homes having commenced construction. 

In terms of completions in the March quarter, that figure also makes for good reading because the estimate of 34,040 is 10% better than the previous quarter and this figure is more than a fifth higher than the same time last year. 

Annually, housing completions in the 12 months to March totalled 125,110 – an increase of 11% from the 12 months to March 2014. 

The housing starts are at a level not seen in this country since 2007 and completions have not been this high since 2009. 

Housing Minister Brandon Lewis is delighted with the housebuilding figures and believes that it is ‘vital’ that the momentum that has now been built is maintained. 

He said: “Housebuilding is at the heart of our plan to ensure the recovery reaches all parts of our country. We’re turning around an industry that was devastated and getting the country building again.

“Today’s figures show these efforts are reaping results, with housebuilding starts having more than doubled since 2009, and completions at their highest for nearly six years.

“It is vital we maintain this momentum, getting workers back on sites and homes built – giving more people the chance to own their own home.”

Seasonally adjusted, the housing starts in the private sector and housing associations both increased at levels of 30% and 36% respectively. 

The pattern of increase continued in terms of completions with the level up by 7% from the previous quarter. 

Completions by housing associations fared even better, with a 24% increase from the December quarter. 

Annually, private enterprise starts increased by 8%, which is the same level as completions in that time. 

The interest in housebuilding is going to be high on the Government’s agenda given the targets put in place to get the country building again. 

Affordable homes is high on the agenda, with plans to increase construction of affordable housing to a level that makes it the fastest in 20 years by 2020. 

Housebuilding starts has increased regionally in the March quarter, with Leicestershire, Derbyshire and Essex reporting large increases. 

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Chancellor outlines business plans in keynote speech

Northern Powerhouse, devolution and investment in roads and rail all mentioned in last night’s speech.

The Chancellor of the Exchequer, George Osborne, delivered a keynote speech last night at the Confederation of British Industry’s (CBI) annual dinner. 

As the UK’s premier business lobbying organisation that provides a voice for employers at both national and international level, CBI give a voice for businesspeople and their businesses all over the world. 

A confederation of 190,000 members who employ seven million people, CBI speaks for companies of every size, from those on the FTSE 100 to SMEs, micro businesses, private and family-owned businesses, start-ups and trade associations. 

During the speech, the Chancellor outlined his plans to get Britain working better, saying: “I want to work in partnership with you, the businesses of Britain – large and small – to deliver it.”

He touched upon the creation of two million jobs in the last Parliament as well as the way training was provided to two million more apprentices. 

Mr Osborne stressed that the investment and improvement in business isn’t something achieved just by the Government, adding: “And it was you who told us we needed to invest in infrastructure and new high speed lines – now we’re delivering the biggest investment in our rail network since Victorian times.”

Echoing an address last week in Manchester, the Chancellor made it clear that a major part of the economic plan is the ‘big challenge’ of creating a Northern Powerhouse that will help to rebalance the economy. 

He said: “If the north of England grew as fast as the forecast for the rest of the UK, the prize is huge. We could add £37Bn to the economy by the end of the next decade. 

“We achieve that by bringing the great cities and counties of the north together, so the whole is greater than the parts.”

He continued by saying this ‘solid economic theory’ has exceeded expectations of progress since it was first announced 11 months ago. 

But the Chancellor stressed that “we must go further and faster”, touching upon the City Devolution Bill that will be introduced to create a “new model of city government.”

He said: “Any major city that wants to will be able to take greater control and responsibility over the key things that make a city work, from transport to housing to skills, and key public services like health and social care. 

“And in return cities will elect a mayor – someone accountable to local people. Someone who takes the decisions and carries the can.”

This is a plan that will be rolled out across the country, with all areas having the option to make their own decisions. This, the Chancellor believes, will help businesses grow which can only be good for the construction industry. 

If the different regions of England are handed power, this would be following the trend set by Scotland, Northern Ireland and Wales where ‘power is being handed back to the people’.

Other ambitions underlined for the next five years in the speech last night will be music to the ears of many in construction, as it will surely provide more work. 

Investment in roads will be increased, work on high speed rail links will also commence, affordable homes will be constructed and there is a real willingness to start work on a new runway in the south east. 

The Chancellor also referenced the new Enterprise Bill that Sajid Javid unveiled earlier this week as a way to “reduce burden on firms, especially smaller ones’.

His final point is again of importance to construction – improving productivity. This is something that the industry will benefit from. 

He concluded: “Improving the productivity of our country is the route to raising standards of living for everyone in this country.”

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Melbury Construction Consultants: Exclusive interview

Making a difference to companies all over the country, Melbury Construction Consultants specialise in providing advice on a whole host of contractual disputes that can be encountered in the industry. 

Peter Heatley, Managing Director, spoke to UK Construction Media about the Company’s services and in the first of a three-part interview, he focuses on issues arising from late payment.

Some of the services that you offer deal with issues of non-payment and late payment. How common an occurrence is this in the construction industry?

It is a common occurrence throughout the construction industry and it happens at all levels from the employers to main contractors, and from the main contractors to the subcontractors. 

There are two elements to it; it can happen during the course of a contract. So if you’ve got a contract due to run for a year and are supposed to have monthly payments, each of those payments can be late or delayed, and when you get to the final account stage, sometimes that can be late or delayed. 

This can cause significant cash flow problems for the people being denied the payments and we’ve seen recently that there are high percentages of late payments so it is quite a considerable problem. 

Are there any examples of what you encounter with this?

The most obvious problem is where the company themselves have got cash flow problems so if they haven’t got the money coming in, they’re going to have difficulty paying money out. This has a knock-on effect throughout the supply chain which can, eventually, lead another organisation towards insolvency. 

Our clients do experience the effects of that but I think also, there are contractors who are aggressive in their management of cash flow. So they will hold onto money if they think we can get away with it. 

In terms of solutions, sometimes a letter from Melbury can cause contractors to make payments when they have not responded to our clients have for quite a while. A letter from us can resolve the problem because the other side realises the person who hasn’t been paid is taking it very seriously. 

So your company has the type of influence in this industry that by sending out a letter, issues can be resolved. What typically do these letters entail?

It depends upon the individual case but, for example, the Construction Act requires Payment and Pay Less Notices to be issued and sometimes we’ll hear from a contractor who’s hasn’t been paid and has not been given any Payment or Pay Less Notices but they’ve submitted an application for payment. In that case, a typical letter from us might say: “Our client made an application to you on such a date. There has been no Payment or Pay Less Notices issued. The final date for payment has passed and you have no defence to payment of our client’s account. Please can you do so otherwise it will go to adjudication.”

Providing that it arrives on the right desk and that it is understood the other side recognise they’ve got something significant with regard to continued non-payment that can often cause the payment to be made.

Where it’s not as clear cut as that, with claims and counter-claims, we would write a letter and articulate our client’s case as to why they’re entitled to what they’re saying.

Again, on many occasions, the people on the other side recognise what we do and the contractor or subcontractor we’re representing have now got advice and are prepared to make an investment in our services to get their entitlements. 

In those cases, money can flow through in relatively short order. 

By working with companies in the industry, how do you ensure that late payment and non-payment are no longer issues on contracts?

There’s no one silver bullet. Our approach is to put a strategy in place with our client that works towards minimising the risk to them of late or non-payment. Part of that process will be to look at the contract terms they’re signing up to and make sure the payment provisions are clearly defined so they know when they’ve got to make applications and when they should  expect payments. 

We find a lot of contracts are written in such a way that they describe in great detail what has to be issued in an application for payment, they might say for example that it’s got to include five ingredients and if it doesn’t it’s not a bona fide application for payment and will be dealt with in the next monthly cycle. 

So a client can put in an application but if they don’t comply with the letter of the contract, they could risk losing entitlement to an interim payment. They would see that as late or non-payment, though contractually it probably isn’t. We would make sure that our client understands what the payment application programme is and complies with it, and that clients are addressing it in a timely way. 

For example, we had one client, about 18 months ago – they came to us around February and had been working away on a job but hadn’t been paid since the previous August. They were out of pocket by about £450,000, surprisingly they had maintained an optimism that things were going to be OK. 

They asked us to get involved and we started an adjudication for them but as soon as we did this, the other side became insolvent so our client lost all the money. 

In an ideal world, they would have contacted us when the first payment was missed and we would then have provided advice for them from that point in time, putting pressure on the other side to make the payments due then before it became a £450,000 problem. 

Is that something that you as a company encourage, others to get in touch after the first non-payment?

Absolutely, because the point to remember is if you’re a contractor or an employer that is seeking to limit the amount of cash going out of your business, you’ll first pay the businesses putting you under the most pressure. It could be people you need on the site or those threatening to suspend work under the contract so what you have to do is make sure you’re at the top of their thought process and they realise they won’t get away with non-payment to you. 

Part of that process is Melbury getting involved so the other side realise the problem is not going to go away. 

What are the wider-reaching benefits of this service? Could it be the difference between a company’s future or not?

Very much so, and this is an issue which we have encountered. If somebody loses a lot of money on a big contract it can cause them to become insolvent and this is something which can happen throughout the supply chain – one of the big contractors which went into administration about six years ago was a company called Connaught   none of the supply chain expected it, and it did cause two other contractors, to my knowledge, to become insolvent. 

One of our clients experienced that and it was partly because they had big outstanding debts that were never recovered so getting the cash in is critical to the health of the business. 

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NHBC release sustainable technologies report

The use of sustainable technologies by housing associations has been released.

A new report from the NHBC Foundation has shown that photovoltaics (PV) is the most popular sustainable technology for housing associations. 

Results from ‘sustainable technologies – the experience of housing associations’, show that approximately 75% of housing associations say they would use PV again. 

The report is extremely useful at identifying which technologies work and which ones cause problems, as well as saying what those problems are. 

Sustainable technology is crucial to the housing sector. This was stimulated back in 2006 with the introduction of the Code for Sustainable Homes and the ten-year target of producing zero carbon new homes. 

That deadline is next year and in the nine previous years, housing associations have taken this responsibility very seriously by adopting sustainable homes so that homes are built at a much higher level and standard. 

The report from NHBC Foundation showed that more than two thirds of the housing associations contacted have used, and have experience of one technology, with PV being the most used energy-related sustainable technology. 

In each Homes and Communities Agency (HCA) funding round, the percentage of PV is growing and is now up to 61%. 

The housing associations questioned for the report indicated planning and funding requirements as well as meeting the Code for Sustainable Homes requirements were the main drivers to installing technologies. 

The upfront capital cost was the main reason two thirds of the housing associations chose specific technologies, with maintenance being the main reason for 38% of those who participated. 

Ease of use of a specific technology was important to more than 50%, with only 19% seeing the payback of the technology as a huge influence. 

Other results from the research showed 75,000 new homes have been fitted with low-flush toilets and more than 66,000 have benefited from low-flow taps and showers – now regarded as standard specification items. 

Almost two thirds of those who took part in the survey said that installation was a problem because of lack of skilled or experienced trades, while 23% agreed that installers who understand the product can make a huge difference to its success. 

A main driver for 43% of housing associations was helping to benefit residents by installing sustainable technologies that reduced fuel poverty. Following this, approximately a quarter said that tenants had benefited from better quality of air, while 81% said their tenants had seen a reduction in energy bills. 

The results of the report show that more work can be done to ensure all technologies are fully researched and an understanding of the options is known, while also making sure the building fabric is right before use of technologies is considered. 

All departments should be involved when technologies are under consideration and it is important to use installers who understand each product. 

Neil Smith is Head of Research and Innovation at NHBC, and he spoke of the progress made in the housing sector. 

He said:  “Much progress has been made by the house-building industry to address environmental issues, particularly in relation to improving energy and water efficiency.

“The social housing sector has led the way in the use of sustainable technologies.  Because of their ownership and management of significant portfolios of high-Code-level sustainable homes, housing associations have been in a position to gain experience of the installation, performance and resident satisfaction with the various technologies.

“This research is aimed at helping the wider house-building industry and others to make better-informed choices.  This report identifies technologies that have worked well, those that have given rise to concerns and the nature of those concerns.”

Established in 2006, the NHBC Foundation provides quality research and practical guidance to support the house building industry as it addresses the numerous challenges of delivering new homes. 

Information was collated by holding a number of focus groups and conducting in-depth telephone interviews. 

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Industry pleased with plans to tackle late payment

Industry reaction to Sajid Javid’s plans to help small businesses.

Business Secretary Sajid Javid returned to his home town of Bristol yesterday to deliver a speech in which he set out the Government’s priorities in helping small businesses. 

He explained how his family came to England in 1964 “with dreams of a better life” and how the family business which included clothing stalls and then a family shop in Bristol, which instilled in him “an unwavering belief in enterprise, opportunity and reward for hard work.”

During the speech, the introduction of the Enterprise Bill was confirmed which will serve the interests of small to medium enterprises (SMEs). There will be a further £10Bn of cuts in red tape during the time and the Bill will help to create the additional two million jobs set out. 

The cuts in red tape will help small business by making audits simpler, will cut down on unnecessary health & safety regulations and Javid said: “Over the next five years, we’ll build on the success of ‘One in, two out’ to put the brake on new regs.” 

This will continue the Government’s drive to cut the number of regulations in place to speed up business processes. 

A key part of the plans is the creation of a Small Business Conciliation Service that will tackle matters such as late payment and will give small businesses the chance to settle disputes with larger organisations much easier. 

Late payment is a huge problem and is expected to cost businesses more than £40Bn this year. It is hoped that next year, when legislation comes in place that will see large companies having to report their payment practices, this problem will be alleviated. 

The Prompt Payment Code has been strengthened as well, and UK Construction Media got the thoughts of Tracy Ewen, Managing Director of IGF Invoice Finance, who believes that the support available for suppliers and subcontractors in the construction industry “should be welcomed with caution.”

She did though welcome the introduction of the Small Business Conciliation Service, adding: “The current payment terms that many suppliers in the UK are subjected to mean that goods and services delivered today wouldn’t need to be paid for until long after summer is over; a practice that isn’t sustainable, but it is a reality that, until now, SMEs have had very little power to change.

“The implementation of a Small Business Conciliation Service should protect suppliers against larger and more powerful entities, and should reduce the number of suppliers that fold due to intense cashflow problems.”

Tracy is cautious because it is an issue that businesses have waited a long time to see tackled by the Government. She says that financial advice is available for the time when a job ends but payment has not been received. 

“In the meantime, there are options available that cover the gap between work completed and money in the bank. It’s therefore important for firms to thoroughly review their options and make use of any free financial advice that their own financial partners and suppliers can offer before pressure from large customers impacts their growth or operations.”

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), is “pleased” with the plans put in place but believes there is more to do to ensure that small businesses are paid quicker for work. 

He said: “Late payment has plagued the construction industry for far too long and I am therefore pleased that the new Business Secretary will be bringing forward legislation to tackle the problem in next week’s Queen’s Speech. 

“Late payment by larger firms is a major barrier to small and micro firms forming part of the supply chain for public sector contracts – if we can solve the problem of late payment, we will also open up public sector construction to thousands of construction SMEs. 

“As two-thirds of all construction apprentices are trained by micro-firms, this will have untold benefits for local jobs and growth.”

“However, let me be clear – there is much more to do. At the end of last year the FMB and NSCC published research which showed that more than 90% of small construction firms agree contractual payment terms with their clients of 45 days or fewer but only 57% of members actually receive payment within those terms.”

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£98M in funding awarded to nine projects by HLF

Projects will maintain scientific, cultural and industrial heritage throughout England and Scotland.

The Heritage Lottery Fund (HLF) has awarded funding to nine sites in Great Britain to benefit heritage for generations. 

Funding to the tune of £98M will benefit scientific and cultural heritage at a number of projects across England and Scotland. 

Those to receive funding are Jodrell Bank in Cheshire, Derby Silk Mill, Great Central Railway between Loughborough and Leicester, the British Library’s Save our Sounds Collection, Dorset County Museum, Lincoln Cathedral, the Science Museum, East London’s Geffrye Museum and Glasgow’s Burrell Collection. 

The latter project is the one that has received the most funding (£15M) to refurbish the award-winning collection which has helped to play a huge role in Glasgow’s cultural renaissance. 

This level of funding means Glasgow City Council can progress with major refurbishment and increase the number of objects being displayed to 90%, while making the museum energy efficient. 

Culture Secretary John Whittingdale OBE and Chair of HLF Sir Peter Luff will visit one of the nine victorious projects today when they go to the Save our Sounds Collection at the British Library which will receive more than £9.5M, comprising of £216,000 of development funding. 

Whittingdale praised the “lasting difference” of the projects that will provide scientific, cultural and industrial advantages for years to come. 

He said: “National Lottery money continues to make an absolutely vital contribution to our culture and heritage in the UK. 

“I’m thrilled that nine exciting projects across England and Scotland will benefit from this significant £98M investment. 

“Whether it’s a new railway museum in Leicester, the Lovell Telescope at Cheshire’s Jodrell Bank or saving the UK’s most vulnerable sound recordings at the British Library – these grants will not only make a lasting difference to local areas and the UK’s wider heritage but will also use culture to inspire young people to learn more about science and technology for generations to come.”

More than £12M is being allocated to Jodrell Bank, which is the world’s only remaining site that showcases the entire story of the development of radio astronomy. 

The First Light project will see a new exhibition pavilion created where the vital role Jodrell Bank has played in scientific development throughout the world will be explained. 

In addition to this, Jodrell Bank – home to the Grade I listed Lovell Telescope – will have a new volunteer and skills programme along with a heritage gallery-based schools programme that will benefit an extra 6,000 school visitors every year. 

Sir Peter Luff i delighted with where these contracts have been awarded and thinks such projects are important to ‘inspire’ future generations. 

“I hope National Lottery players will be delighted to see their money being used to tell the spell-binding story of the UK’s scientific and industrial excellence,” he said. 

“Many of the projects we are supporting today celebrate this tradition. I am particularly pleased that the Lotter can help inspire young people to take a greater interest in science and technology. 

“From the awe-inspiring Lovell Telescope to the Lombe brothers’ first fully mechanised factory, these sites will enhance local tourist economies as well as educate and entertain.”

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