Powered Now, UK invoice Software App looks at the UK construction companies accelerated expansion of business activity during July.
UK construction reacts to PM's £5bn “new deal” announcement
As the UK construction industry continues to ruminate on the implications of Prime Minister Boris Johnson’s ...
As the UK construction industry continues to ruminate on the implications of Prime Minister Boris Johnson’s announcement of a £5bn “new deal” to build homes and infrastructure, here we gauge a somewhat mixed reaction from market leaders within the sector.
Ben Dyer, CEO of Powered Now:
“The new planning regulations are indeed significant and heavily focusses on curbing the amount of red-tape that is traditionally associated with construction. However, it is important that standards within construction and building renovations do not turn into a lawless scenario.
“Whilst it is certainly true that some of those in the construction trades aren’t the biggest fans of administrative work, it is important that the industry adapts to streamlining admin, which these reforms set a precedent for. If there is to be wide scale changes to the primary uses of our town centre buildings, SMEs are going to find themselves inundated with work, which is great news following the lockdown period. Nonetheless, SMEs in the trades should be looking to ways that their own business admin can be streamlined, and back office solution technology could be one extremely useful tool for allowing this.”
Greg Mesch, CEO of CityFibre:
“Project Speed will not find a faster technology than full fibre infrastructure to support the country’s recovery. Our multi-billion pound shovel-ready build programme is already well underway which will allow CityFibre to create up to 10,000 jobs up and down the country. From Bradford to Southend, Doncaster to Ipswich and beyond, the opportunity is there for full fibre to create a new agile, green and balanced economy where nobody is left behind. What the UK needs now is the Government to put in place the right policy and regulatory conditions to level up our digital infrastructure and unlock a new platform for success.”
Brian Berry, Chief Executive of the Federation of Master Builders:
“A complex planning system hampers the ability of small to medium-sized (SME) house builders to bring forward new homes. I therefore welcome the Prime Minister’s statement of intent to radically reform this process. Builders have been concerned for years that the planning system needs updating so as to alleviate workloads for stretched departments but also to speed up decisions. More money for the Home Builders Fund is positive, but this must now be open to micro builders delivering five homes or fewer, often on small brownfield sites. The apprenticeship guarantee will be vital in construction where we have been experiencing a skills shortage for many years.
“It is not possible to ‘build back greener’ and better without upgrading our existing buildings, however. Heating our homes accounts for 20% of total UK carbon emissions and these buildings must be insulated as soon as possible to achieve net zero by 2050. This programme of work will also help to boost activity in the repair and maintenance building sector which has seen workload, employment levels and enquiries all fall to historic lows this year. These firms employ hundreds of thousands of people, and SMEs train 71% of apprentices in construction. They are key to the levelling up agenda and boosting regional growth.”
James Talman, NFRC Chief Executive:
“The Prime Minister’s vision to build back better, faster and greener, will be welcomed across the construction industry. Roofers have been calling for certainty over future work and support to retain apprentices and jobs, and this announcement will help to provide that.
“The Prime Minister’s rhetoric must be now followed up with delivery. We have been calling for the school Condition Improvement Fund to be released, and after months of delay, are delighted that this has now happened. That being said, we are still hearing of Local Authorities delaying projects, and this is having a real impact on roofing contractors. Project Speed should apply to all public sector work, not just high-profile infrastructure schemes.
“What is needed now is not just fast-tracking of current projects and funding, but incentivising future investment. Speed is one thing, but we also need substance. The government should now look to tax incentives to encourage investment.”
Dave Bennett, MD of Topcon Positioning (Great Britain) Ltd:
“Building better and building bolder is a wonderful notion, as we, as Boris says, will look to “build the foundations for future prosperity”. With billions being funneled into new hospitals, new and improved schools, better roads and improved travel connections, now is absolutely the time to be radical.
“Radical in our industry means breaking the rule book, changing the way things have always been done, and stepping away from what’s comfortable and known.
“Dualling the A1 to Scotland has been on the cards since 1992, 40 new hospitals have been discussed for years, but now it seems Boris is allowing more investment and less red tape. Project Speed could be the chance for us to take control of our industry and prove our worth to help accelerate recovery. Digital tools, a focus on upskilling and inspiring the next generation will all help, but we must change our mindset from “what do I get from this” to “how can we do this best” to succeed.”
Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson:
“The Prime Minister’s announcement today might not reach the heights of Roosevelt’s new deal but it still gets one very important thing right: it focuses on smaller local projects like schools, hospitals and high streets that can be delivered quickly. This is exactly what we need to keep work flowing to the sector and to shore up the future of SME construction firms.
“Smaller local projects, in contrast to developments like HS2, benefit SME construction firms more, as they have the resources to handle this size of contract. It’s these firms who need the most help at the moment. In addition, the smaller the project the quicker it can get up and running, helping to revive the sector and prevent a spike in unemployment. Ideally we should have a good split between local projects and the bigger national items to keep work flowing to the larger construction firms as well.
“Stamp Duty Land Tax (SDLT) and VAT reductions should be the sector’s next big ask. Abolishing SDLT for downsizers of over 65 years old would free up housing stock for families and encourage the purchase of new builds for retirees, who have the money but need an incentive to move. Finally, a well implemented VAT reduction would cut costs and boost demand across the industry, enabling the construction sector to recover at this crucial time.”
Debbie Dore, Chief Executive at Association for Project Management (APM):
“Whilst the Prime Minister’s proposals and emphasis on ‘build, build, build’ is welcome, this needs to be more than a one-off big spend. This should be both a sustainable and sustained approach, and have a strong focus on the requirements of successful project delivery, both in capacity and capability.
“‘Sustainable’ means it needs to have a green thread running through it – focusing on measures that will embed ‘Net Zero’, whether that is investment in things like wind power or infrastructure for electric vehicles.
“It should also be ‘sustained’ in the sense of having both small as well as major projects; regional not just national; a planned pipeline that is ‘shovel relevant’ as well as’ shovel ready’; and finally not just physical infrastructure but broader transformation measures, including digital investment to underpin recovery. Sustained delivery is as important as speedy delivery.
“Finally, this commitment is welcome but must be backed by investment in the skillsets and training essential to underpin this. People deliver projects. Greater investment as well as a focus on project professionalism will be required to support the proper inception, delivery and completion of projects both now and in the future and this should be central to the National Infrastructure Strategy.
“As we have said before, good project outcomes require the right conditions for success. Any ‘surge’ in new projects must be matched by the capability to deliver them with the public good in mind. We have to ensure the delivery of these projects factor in rapid changes in technological innovation and Government targets to deliver net zero carbon emissions.
“As the chartered body for the project profession, APM is committed to ensuring that project professionals have the essential skills to address emerging challenges and deliver sustainable solutions. Whether projects form part of plans for tackling disease, building modern high-speed railways, tackling the effects of climate change or planning the construction of new homes, it is important that people have the right attributes and skillsets to adapt and thrive.”
Jon Hart, Infrastructure partner at Pinsent Masons:
“These are big commitments with, on the face of it, some eye-catching procurement opportunities. There simply aren’t enough ‘shovel ready’ projects out there and it remains to be seen what this announcement will mean in practice. The previously announced ‘pipeline’ contains a number of anomalies in respect of projects that have already been announced. During such an economically turbulent time the government needs to remove uncertainty around approaches to procurement, particularly for schools and hospitals. It will be interesting to see how tendering processes can be sped up and how the public sector capacity gap within government for procuring schemes, when coupled with the industry’s own skills shortage is going to be addressed.
“There is an opportunity to grasp the political nettle of private investment and building a new schools investment programme from scratch to replace the Priority Schools scheme that has just about run its course. Simply wanting something to happen doesn’t necessarily make it so: a concern must be that it could be years before many of the schemes being talked about will be in a position to be tendered for, let alone for construction work to commence.”
Jacqueline Hughes, senior risk analyst at Equib:
“This decision to accelerate infrastructure spending underlines the important role it can play in kickstarting economic recovery. However, a longer-term strategy is still needed.
“Working at speed brings challenges, which will require careful project management. In particular, project teams will need to balance the need to adhere to Covid-19 constraints, with the need to deliver buildings that are fit for purpose, as quickly as possible.
“Speeding up the delivery of infrastructure projects must not lead to corners being cut. There are several potential issues here – for example, if procurement procedures are circumvented or abbreviated in some way, this could mean taxpayers don’t get value for money. Early-stage workshops must also be thorough, ensuring there is input from contractors, to avoid the need for costly delays or re-designs at a later stage.
“This is a chance for the UK construction industry to put past lessons to good use and drive national economic recovery.”
Tom Fyans, policy and campaigns director at CPRE:
‘Deregulating planning and cutting up red tape simply won’t deliver better quality places. It’s already far too easy to build poor quality homes. Our research has shown that three quarters of large housing developments are mediocre or poor in terms of their design and should not have been granted planning permission. Transferring decision making power from local councils and communities and handing them to developers is the exact opposite of building back better.
‘The best way to deliver the places that we need, at the pace we need them, is to make it easier for local councils to get local plans in place, and then to hold developers to those plans. One glimmer of hope in the prime minister’s words are those prioritising building on brownfield to release pressure on greenfield sites. But if we are to truly build back better, and ‘level up’ across the country, we need to make sure the voice of local communities are strengthened in shaping the homes and places that they will inherit.’
John Newcomb, Builders Merchants Federation CEO:
“It is great to see a Prime Minister responding to the Covid-19 crisis by promising to build back better, greener and faster, and by understanding the very real need to get the millions of people working in construction and building trades – including apprentices – back to work. In this regard, we are pleased to see the Construction Leadership Council’s Road to Recovery plan reflected in his speech.
“Reforming the planning system is long overdue and changes that speed up the system and enable redundant buildings to become new homes are certainly welcome. While some elements have been announced, we will need to see the detail in the promised planning Policy Paper in July.
“With regard to new housing, the building materials supply chain has often heard ministers talk a good game without the necessary political and managerial drive needed to build housing of all types and tenures through to completion.
“And, while we have heard that the Government will publish a National Infrastructure Strategy in the Autumn, we also need a firm commitment to level up existing housing in every region through a National Retrofit Strategy.
“Our ask of Boris is to help SME builders and allied trades to return to the market and do what they do best. Build small numbers of homes, in many locations, in keeping with their surroundings, that voters want to buy. And undertake the RMI that many UK homes still desperately need to provide warm and secure accommodation. All in all, to boost the number of greener, faster, better homes that the country needs.”
Mathew Riley, Ramboll UK’s Managing Director:
“Reform of the planning and procurement system in the UK is long overdue and something that the industry has been calling for for some time. It has long crippled the construction sector’s ability to drive activity, innovate and meet its full potential.
“The parameters upon which procurement contracts are awarded is still overwhelmingly focused on price rather than encouraging innovation or efficiency. Public procurement processes are particularly problematic, as the opportunity to put forward any added value is extremely limited/non-existent. If the Government want to encourage change then they must provide a clear and immediate strategy, or businesses are unlikely to put investment behind developing better engineering solutions.
“If the Government deliver on this promise for reform and investment, then it is our responsibility as industry leaders to provide the right environment for our people to innovate and create sustainable solutions that support and benefit society as a whole.”
Andrew Huxley, MD of Besblock:
“In the weeks after lockdown, building sites began to re-open we saw our orders gradually increase, and our manufacturing levels begin to recover,” he said.
“There are many ongoing projects across the country which were halted by COVID-19 and most of these are back underway again albeit at a reduced rate. This is a heartening start but it needs to continue. There is likely to be a recession across the UK and the Government needs to take urgent steps to ensure that significant house building continues.
“The Government needs to act swiftly to keep house building afloat. These are very challenging times for our industry.
“It reaches from manufacturers to contractors and builders merchants, there are an awful lot of people reliant on the UK being able to keep building, and I very much hope this is the case.”
Jude Brimble, GMB National Secretary:
“Five billion sounds like a lot – but in infrastructure terms it’s just a drop in the ocean. It wouldn’t even meet half the cost of filling in the potholes in England and Wales.
“To get our economy back on its feet we need a proper recovery plan based on sustained infrastructure spending targeted to create and keep good quality jobs.”
Clive Docwra, Managing Director of McBains:
“On the face of it, the PMs announcement is extremely encouraging. A building boom is exactly what the construction sector and the economy needs after being decimated by the Covid-19 crisis. Construction output levels are at historic lows, initially suffering from productivity challenges brought about through lockdown and social distancing measures, and potentially in the future medium to longer term by uncertainty and recessionary pressures. For example, private new housing work is at its lowest level for a decade and last month saw a record fall in private commercial work – so public sector projects will be of huge importance in order for the sector to get back on its feet again.
“Measures like streamlined planning, greater flexibility associated with PDR rights, extensions to the ‘Help to Buy’ scheme and new mechanisms to encourage private sector investment in public sector initiatives, will be warmly welcomed. But there’s still much more to do to increase construction activity and housebuilding rates to the levels needed to meet the shortage of homes. Ultimately, clarity of pipeline and early commitments to policy changes will enable businesses to plan and invest, and thus support employment and economic growth.
“Plus, if we are to really experience an infrastructure and construction boom that truly levels up, we need to see construction firms from all corners of the UK, and of all shapes and sizes, not just the multinationals, be a part of these plans.”
“We welcome the fact that sustainable housing delivery is leading the government’s economic response to Covid-19.
“Building better, building greener and building faster: these are the three key principles by which the government has promised to deliver a housebuilding revolution, and these principles are exactly the foundation of modular construction; a more efficient type of housebuilding.
“Homes created along a production line, by manufacturers such as Vision Modular Systems, benefit from a controlled, process driven factory environment where quality can be benchmarked at numerous stages of the build cycle.
“The same processes and efficient construction logistics also ensure a more sustainable delivery of homes by significantly reducing waste, improving levels of recycling and reducing carbon emissions by half.
“Finally, amongst its many benefits, offsite construction has the ability to deliver these sustainable, high quality homes 50% – 60% quicker, which is vital post-Covid as the government looks to ramp up housing delivery quickly.”
Catherine Welch, a Partner in the Construction and Engineering team at Royds Withy King:
“Any speed up of investment in public assets is a good thing in supporting the construction industry and the wider UK economy given the impact of Covid-19 and the potential reality of a no deal Brexit at the end of this year.
“The question, however, is how quickly can this investment translate into actual contracts placed along the whole supply chain, with shovels in the ground and the cash flowing swiftly to contractors and suppliers.
“There is a concern that this investment could lead to a ‘two-tier’ construction industry.
“On the one hand, we have contractors and consultants involved in infrastructure projects looking to mid/long term prospects of projects coming online and building their business models around this clear investment pipeline. But on the other, there would be those contractors and consultants who work on projects ‘outside’ of infrastructure where the investment and project pipeline is already drying up.
“Government will need to try and balance all corners of the sector, and balance this investment with its desire to mitigate the environmental impact of certain proposed infrastructure projects.”
Moustafa Ali, Economist at GlobalData:
“Including a new pledge to “Build, Build, Build”, the UK Government is banking on the high multiplier effect associated with infrastructure investment – that every pound invested generates a multiple return in terms of the wider impact on the economy. There is clear political momentum to accelerate infrastructure construction, however, the government’s fiscal position is in a dire state with government borrowing potentially reaching more than 15% of GDP in 2020. This could scupper progress in terms of funding such investment plans.
“Prime Minister Boris Johnson’s plans to increase spending for key infrastructure such as roads and railways, as well as for new homes, will provide support for a recovery in the construction industry, which has been severely impacted by the crisis. Construction output declined by 3% in Q1 2020, and preliminary data show a 40% month on month drop in April.
“The government’s infrastructure plans suggest it hopes a building boom will drive economic growth in the latter half of the year as the economy emerges from the lockdown. GlobalData is projecting a recovery in construction output in the second half of the year, but even under the most optimistic scenario, the contraction in the year as a whole will be over 10%.”
Bernadette Hillman, Partner at Sharpe Pritchard:
“However ‘radical’, in order to make progress, planning reforms must be carbon net-zero compatible and we need an effective investment framework to deliver national priorities locally.
“Without this, dismantling the planning system completely will not result in better, greener, or faster development.”