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Author Archives: The Construction Index UK News

Consultation begins on cuts to red tape in planning

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August 1, 2014

/ The Construction Index UK News

Proposals designed to reduce red tape and help builders get onto sites without delay have been put out for consultation.

Local residents will also have a greater say over the future development of their area, under plans announced yesterday by housing and planning minister Brandon Lewis.

The proposals are part of the government’s drive to streamline planning and are intended to make it it easier for communities to devise neighbourhood plans, help builders get onto sites with planning permission without delay and reduce bureaucracy and red tape.

The British Property Federation (BPF) has welcomed the launch of consultation. It was particularly pleased to see the three-tier planning system included within the proposals, which it has long advocated. This ‘Planning Pyramid’ will determine which applications need the most attention, allowing prior approval rights to those projects that demand the least attention, which will make the planning approval system considerably more efficient, it said.

BPF chief executive Liz Peace said: “The proposals in today’s consultation document are encouraging, as they are targeted towards a number of specific issues that can cause obstacles in the planning process. While some of the suggested changes are small, they are also important, and if turned into legislation could make a tangible difference to the system and speed-up much needed development in the UK.”

Lewis said: “Since 2010 we’ve made significant strides in reforming our planning system from one of draconian top-down targets, to one where local people are in charge and it’s working well. Last year alone, planning permission was granted for 216,000 new homes. Today’s proposals will help scrap even more red tape and make it even easier to get the homes and shops communities want built, while at the same time breathing new life into our vital industries.”

The proposals include giving more local communities a greater say over development. Already more than 1,000 communities are making use of their new right to produce a neighbourhood plan or neighbourhood development order – the latest proposals would speed up the process to encourage more to follow suit.

Also up for consultation is a proposal to put on a permanent footing the currently permitted development rights to allow offices to be converted into new homes. The proposals are also designed to make it easier to convert empty and redundant buildings into new homes. New measures would also ensure planning conditions are cleared on time so that new homes that have planning permission can get built without delay.

The current rules governing change of use from a shop to a restaurant, and from a shop to leisure use, would be relaxed in order to help high streets adapt to changing customer needs. Payday loan shops and betting shops would be excluded from a new, wider ‘retail class’, so councils have a greater say over these being set up in their area.

The proposals also aim to remove what the government describes as “the unnecessary gold-plating an EU directive which slow down the process, by reducing the numbers of homes and other urban development proposals that would be screened unnecessarily for environmental impact assessments”. 

There are also proposals for improving the way major infrastructure projects are planned, with proposals for a more flexible and streamlined system so practical changes can be made to planning proposals where these are beneficial and developers can use a ‘one stop shop’ for more of the consents they need.

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Keltbray reports best-ever turnover

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August 1, 2014

/ The Construction Index UK News

Keltbray has announced the best-ever performance in the company’s 38-year history.

It reported a 15% increase in turnover for the financial year ending 31 October 2013, up from £126m to £145m. Gross profit improved by 29%, and operating profit remained stable at £2.6m. The group’s cash position improved to £4m in hand by year end.

“We expect to continue to stay ahead of the construction market recovery by growing the business in excess of 20% in 2014 based on our good pipeline of work," said chief executive officer Brendan Kerr. "Our challenge for 2014 and 2015 will be to meet the widely reported skills shortages in our industry by widening the talent pool and continuing to build on our track record of attracting young people to Keltbray by offering good prospects, job security and a range of training and development opportunities.”

Keltbray’s Demolition & Civil Engineering division, which covers about 66% of the business  and includes piling, asbestos management, engineering design consultancy as well as haulage and plant increased turnover by 12%. Contract wins include regeneration projects at the Heygate Estate in London for Lend Lease, and major residential development for Qatari Diar at Chelsea Barracks.

The Rail division, which covers about 30% of the business and includes overhead line electrification design and build as well as rail engineering and civils projects, grew by 24% and was responsible for the company’s biggest turnover increase. Keltbray became the delivery partner for ABC Electrification and Costain to work on a seven-year rail electrification framework contract, which is expected to provide workloads until 2021.

Kerr said: “I am pleased about the continued strengthening of our performance and our consistent improvements in turnover growth and maintenance of operating margins. To meet increasing market demands, we invested a record £9 million in new plant and assets in 2013. We also bolstered our human resources and training functions to manage our future skills and labour requirements effectively."

 

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Private sector drives recent UK housing growth

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August 1, 2014

/ The Construction Index UK News

Housing growth in the UK over the last quarter was driven entirely by the private sector, NHBC’s new housing registration figures have shown.

Overall, the number of new homes registered across both the private and public sectors in the UK for the second quarter of the year totalled 36,858 – a 3% increase on the same period last year.

The figures show that this steady growth was entirely driven by the private sector – which grew 9% compared to same period last year. In contrast, the public sector reported an 11% drop in registrations, down to 9,331 from 10,474 in the same quarter last year.

The drop in public sector registrations coincides with first phase of the Government’s Affordable Housing Programme coming to an end in 2015.

NHBC’s registration statistics show that June experienced a 14% increase in registrations, compared to the same month last year.

Across the UK for the last quarter, the South East experienced a 48% increase compared to the same period last year (with the East Midlands also considerably up, at 38% for the quarter.

NHBC’s chief executive Mike Quinton said: “It is encouraging to see that house building levels have continued to grow in 2014 – following the substantial increase in volumes recorded last year. We hope to see this growth further consolidated throughout the rest of the year. However, we have been clear that the UK still has an undersupply of new homes so we must continue to work hard to meet the growing housing needs of the population.

“Our figures also show that there has been a noticeable growth in the private sector. As expected, this has coincided with a drop in affordable housing registrations.

“This decrease in public sector registrations can be attributed, in part, to the first phase of the Government’s Affordable Housing Programme coming to an end. We anticipate that the public sector will pick up again as funding is fully allocated for the next phase from 2015 to 2018.”

 

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Ucatt slams privatisation of prison maintenance

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August 1, 2014

/ The Construction Index UK News

Construction union Ucatt has described the government’s decision to privatise the jobs of all prison maintenance and facility maintenance staff as an expensive farce.

Prison maintenance staff were told yesterday that their jobs will definitely be privatised on 1 June 2015. The previous proposal to consider an in-house bid has been dropped.

Shaun Lee, Ucatt’s national officer for the Prison Service, said: “This is an expensive farce. Workers have had their lives put on hold for several years as the Prison Service have pretended there was a chance that work might not be privatised. The reality was that management and the ministers were always determined to sell workers down the river.”

The four companies bidding for the four regional contracts are Amey, Carillion, Mitie and Sodexho. No company can win more than two of the contracts. An announcement will be made in the autumn about which has won which contract.

Lee added: “Privatising prison maintenance worker will not save taxpayers a penny. The quality of maintenance work will deteriorate which will then have a major effect on safety in prisons. If contractors bring in their own workforce there will be a major threat of security being compromised.”

 

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Liverpool sets out plan for 646 new homes

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August 1, 2014

/ The Construction Index UK News

Liverpool City Council has set out plans for 646 affordable homes to be built over the next four years after a successful bid for £14m of government cash.

Four of the city’s Housing Associations have secured the funding from the Homes & Community Agency 2015-18 Affordable Homes Programme. Liverpool Mutual Homes will be building 313 units, with Riverside receiving funding for 186, Plus Dane set to build 96 and Liverpool Housing Trust funded to build 51 units.

The homes – made up of 566 properties for rent and 80 for shared ownership – will be a mix of two, three and four bedroom houses and one and two bedroom apartments. Some will feature energy saving technologies to give tenants cheaper fuel bills.

Assistant mayor and Cabinet member for housing, Councillor Ann O’Byrne, said: “This is really great news for the city and is part of our commitment to improve the range and quality of properties on offer for residents. We are working closely with our housing associations to make sure the properties are built in the right places to meet the demand in the local area.

“It is another boost to the Mayor’s pledge to build 5,000 new homes and bring more than 1,000 back into use which we are already on track to exceed.

“We will also be making sure that as much of the construction work as possible benefits local firms and local people.”

 

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Arcadis agrees to buy Hyder in £256m deal

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July 31, 2014

/ The Construction Index UK News

Arcadis is to buy Hyder Consulting in a £256.2m deal agreed by the boards of both companies.

Arcadis will acquire the share capital of Hyder at a price that represents a premium of approximately 38.5% on Wednesday’s closing price of £4.69 per Hyder share.

The Arcadis directors believe there is a compelling strategic rationale for the acquisition, seeing the addition of Hyder’s design and engineering capabilities as strengthening presence in specific geographies and in market sectors such as infrastructure, buildings, water and natural resources. Arcadis said that the acquisition will enable it to establish a footprint in new target markets sooner than previously anticipated.

Arcadis chief executive officer Neil McArthur said: “Hyder is a unique company with a long history of being involved in the leading edge of design and engineering. Through the transaction we see an excellent opportunity to better serve our clients by further deepening our capabilities in global design and engineering in growth markets whilst creating exciting career opportunities afforded by a stronger global growth platform for staff in both companies. The transaction will create value for Arcadis shareholders by accelerating our sustainable growth strategy and through the synergy opportunities that arise from the combination.”

Hyder chief executive Ivor Catto said: “Arcadis’ recommended cash offer announced today represents a significant premium to Hyder’s current share price. Although the Board believes that Hyder has a strong future as an independent business, it considers that this cash offer substantially recognises Hyder’s growth prospects, and provides certainty, in cash, to our shareholders today. The resultant group should also provide further opportunities for our highly valued clients and staff.”

 

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Carillion tells Balfour Beatty ‘we’re not done yet’

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July 31, 2014

/ The Construction Index UK News

Carillion has responded to Balfour Beatty decision to walk away from merger talks by saying that as far is it is concerned, the deal is not dead yet.

Carillion’s directors decided only yesterday that it was “essential to retain the stability and dependability of Parsons Brinckerhoff’s earnings” for a merger to work.

Up to this point, Balfour Beatty thought that both sides understood that its sale of its US engineering subsidiary was going ahead, come what may. Carillion seeking to block that sale proved a deal-breaker for Balfour Beatty who promptly upped sticks.

A subsequent statement released by Carillion today indicates that it had not yet totally accepted that the breakdown in talks cannot be rescued and was trying to work out what its next move should be.

It said: “The board of Carillion continues to believe in the powerful strategic rationale of a combination and the capability of such a combination to create very significant shareholder value. The board of Carillion will therefore give further consideration to its position in the light of its requirements that (i) due diligence would have to be concluded to its satisfaction; and (ii) the boards of Carillion and Balfour Beatty would have to recommend a combination to their shareholders.”

Carillion said it would make a further announcement in due course.

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New fund for greasing stalled house-building sites

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July 31, 2014

/ The Construction Index UK News

The government is inviting local authorities to pitch for grants worth up to £50,000 to be used to unblock stalled house-building projects.

The Department for Communities & Local Government has a pot of £3m available, that it reckons is enough to get work started on 85 sites around the country and 25,000 new homes.

Estimates suggest there are 50,000 new homes with planning permission on which construction work has yet to start, for whatever reason, often relating to completing financial agreements or signing-off conditions attached to planning permissions.

 

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Lobbyist joins ACE

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July 31, 2014

/ The Construction Index UK News

New director of policy and external affairs at the Association for Consultancy & Engineering (ACE) is barrister-turned-lobbyist Julian Francis.

Dr Francis is a Cambridge graduate, a barrister and holds a doctorate from the Institute of Commonwealth Studies. He joins the ACE from the London Taxi Company, where as head of government affairs he ran lobbying campaigns.

Before joining ACE, Julian was at the London Taxi Company  where he had direct responsibility for the development of the organisation’s policy positions, and led on communicating this to ministers, policy makers, MPs and the media. Prior to this, Julian worked in a variety of policy roles including as Political Advisor to the London Borough of Tower Hamlets and as Communications & Public Affairs Director at Pancresta Ltd . He graduated from Cambridge University with BA and MA in Law, qualified as a Barrister and also holds a PhD Degree from the Institute of Commonwealth Studies.

 ACE chief executive Nelson Ogunshakin said: “Julian brings with him a wealth of experience from which to provide renewed strategic direction and drive to ACE’s engagement with government and key stakeholders.”

Dr Francis said:  "Over the coming months and years the main policy debate in this country will be over the provision and regeneration of the infrastructure network and I look forward to helping shape this debate with ACE's wide membership."

 

 

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Wallboard mould solved

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July 31, 2014

/ The Construction Index UK News

A new treatment that stops wallboard going mouldy has been patented by Microban International.

The patent covers the incorporation of an antimicrobial additive package into the wallboard to resist the growth of mould and mildew.  The patented wallboard employs a two-part antimicrobial system and an innovative targeting approach to provide protection against mould, mildew and fungus.

Microban specialises in built-in antimicrobial product protection. It has secured a European patent relating to treated wallboard. It already has wallboard technology patents in other parts of the world, including North America, China, Hong Kong, Australia and Brazil.

“In wall board, fungal issues typically occur at the interface between the paper and the gypsum core,” said Dr Ivan Ong, vice president for research & development. “Fungal infiltration of this nature can occur without visual cues until it becomes extensive and damaging. The patent provides an effective and manufacturing-friendly method to deliver a combinatorial package of antimicrobial agents to specifically target microbial issues this interface.”  

 

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Construction tax fraud gang jailed

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July 31, 2014

/ The Construction Index UK News

A gang of 20 has been jailed for stealing more than £8m in a sophisticated tax fraud.

The 17 men and three women were arrested by HM Revenue & Customs (HMRC) officers during an investigation that revealed construction-related tax offences and money laundering over a two-year period.

Investigators uncovered a large and complex web of illegal activity involving more than 100 businesses. Subcontractors were employed off-record and the gang members pocketed income tax and national insurance contributions due to be paid to HMRC. Fake invoices, supposedly for providing labour, had also been created to claim VAT refunds to which the gang were not entitled.

HMRC investigators carried out searches at more than 40 homes and offices across the UK in September 2009. They seized paperwork, computers, class A drugs and almost £170,000 in cash from 11 business properties in the West Midlands and Manchester. Smaller quantities of US dollars and Euros were also discovered.

All defendants have now been sentenced following three separate trials at Birmingham Crown Court, and reporting restrictions have been removed.

HMRC assistant director Colin Booker said: “Today’s final sentencing brings to an end a six-year investigation, centred on a highly organised and complex fraud, undertaken by a group of individuals who cared for nothing but their own financial gain.

“HMRC is investing more time and resources than ever into identifying fraud. Our work does not stop at sentencing, but at depriving those involved of the proceeds of their crimes. Confiscation action will follow, as we attempt to recoup some of the £8 million the gang so shamelessly stole from the taxpayer.”

 

Birmingham Crown Court sentenced the following defendants yesterday following a 13-week trial:

  • Anthony O’Neill, aged 41 and from Bolton, Greater Manchester, had denied five charges of VAT fraud and conspiracy to launder money. He was jailed for eight years.
  • Michael Maguire, 43 and from Bury, also denied five charges of VAT fraud and conspiracy to launder mone. He was jailed for five years and nine months.
  • James Keith Radford, 53 and from Manchester, similarly had denied five charges of VAT fraud and conspiracy to launder money. He was jailed for six years.
  • Stanley Turner, 62 and from Blackpool,had denied a fraud offence and was sentenced to 18 months imprisonment suspended for two years.
  • Christopher Standring, 47 and from Bury had admitted five charges of VAT fraud and conspiracy to launder money and was jailed for five years and six months.

The following defendants were sentenced after separate earlier trials:

  • Bernard Harper, 58 and from Halesowen, was described as a construction boss and was described by the judge as “the centre of the fraud and an organiser of it”. He was jailed for eight years.
  • Steven Jeremy Bache, 52 and from Stourbridge was jailed for three years and six months. He is an accountant who used his expertise to in a bid to evade HMRC controls.
  • Kelly Nicholls, 36 and from Brierley Hill, was jailed for five years. She produced invoices and helped with administration tasks connected to the fraud.
  • Susan Coussens, 55 and from Stourbridge, had denied money laundering and fraud charges but was jailed for four years. Like Kelly Nicholls, Coussens produced invoices and helped with administration tasks in the fraud.
  • Helga Lowndes, aged 48 and from Stafford, was jailed for two years.
  • Simon Clifford Davies, 46 and from Redditch, was jailed for four years.
  • Anthony Smith, 36 and from Brierley Hill, West Midlands, admitted cheating the revenue and was jailed for five years and one month. A former bank manager, Smith is also the partner of Kelly Nicholls and was described by the judge at sentencing as Harper’s “lieutenant and the office manager” when he was not present.
  • Stuart Henderson Barrett, aged 57 and from Tividale, admitted conspiracy to cheat the revenue and money laundering and was jailed for four years and three months. Stuart Barrett ran a security company alongside his son Steven Barrett, and collected some of the fraud’s proceeds from various banks. 
  • Steven Lee Barrett, 34 and from Walsall, admitted conspiracy to cheat HMRC and money laundering, and was also imprisoned for four years and three months. The judge said that both Barretts were “heavily involved” in the fraud. 
  • Richard Ruddick, 45 and of no fixed abode, had admitted VAT fraud and was jailed for one year and eight months. Ruddick acted as an intermediary between the off-record workforce and the company that contracted them. He was described by the judge at sentencing as “at the coal face” during the fraud.
  • Craig Ross Hill, 50 and from Tividale, admitted conspiring to cheat the revenue and was jailed for four years and three months. Hill was a director for two of the sham companies created as part of the scam.
  • John Caulfield, 42 and from Hall Green, Birmingham, had admitted cheating the revenue and was jailed for four years and three months.
  • Ian Siviter, 38 and from Tividale, admitted cheating the revenue and was jailed for four years and three months. He was a director for two of the sham companies created as part of the scam.
  • Timothy O’Loughlin, 55 and from Bristol, admitted conspiracy to launder money and was jailed for three years and nine months.
  • Neil Hughes, 50 and from Bromsgrove, admitted cheating the revenue and was jailed for four years and three months.

 

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Talks over already as Balfour Beatty rebuffs Carillion

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July 31, 2014

/ The Construction Index UK News

Less than a week after revealing that it had welcomed Carillion’s approach for a merger, Balfour Beatty has walked away from the table and called it all off.

The dispute is over Parsons Brinckerhoff, which Balfour Beatty wants to sell and, it now transpires, Carillion would really rather like to keep.

Balfour Beatty said that it had been surprised by Carillion’s “wholly unexpected decision” to only proceed with a merger if it included Parsons Brinckerhoff. However, Balfour Beatty has already put its US engineering arm up for sale and regards this as a deal breaker.

Balfour Beatty said it was now returning to Plan A: sell Parsons Brinckerhoff and find a new CEO to replace Andrew McNaughton who was pushed out a few months ago.

Having entertained Carillion’s overtures, however, the company now appears in play and future takeover or merger approaches seem likely. The whole episode does little to reinforce Balfour Beatty's shaky reputation as a well-led company and it is not entirely clear what calibre of person would be interested in taking the top job there under the current uncertain circumstances.

 

The statement put out by Balfour Beatty this morning said:

“Balfour Beatty announces that it is terminating discussions with Carillion regarding a possible merger with immediate effect. The termination of discussions follows Carillion’s wholly unexpected decision to only progress the possible merger in the event that Parsons Brinckerhoff remained part of the potential combined entity.

"This change is contrary to the basis upon which the Balfour Beatty Board agreed to engage in preliminary discussions. It is also contrary to the joint announcement released on 24 July 2014 which confirmed that the sale of Parsons Brinckerhoff would be unaffected by the merger discussions and also a presentation to Balfour Beatty’s Board by Carillion on 28 July 2014.

"This change in the proposed terms is not acceptable to the Board of Balfour Beatty.

"Balfour Beatty will proceed in accordance with its own business plan, including the competitive sale process of Parsons Brinckerhoff currently well underway. It will also continue to actively progress its search for a group CEO.”

 

 

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Boris sets out £1.3 trillion construction plan for London

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July 31, 2014

/ The Construction Index UK News

Spending on London’s infrastructure needs to double to £38bn every single year for the next 35 years.

That’s according to a consultation document published yesterday by the mayor, Boris Johnson.

The London Infrastructure Plan 2050 provides a £1.3 trillion vision for the long-term infrastructure needs of London. It sets out how the capital will need 50,000 new homes, 600 new schools and colleges, a 20% increase in energy capacity, improved water supply and public transport, and a new four runway hub airport in the Thames estuary.

The document signals the start of a consultation programme of how the city can address the challenges presented by population growth. Over the next half century population of London is forecast to increase by 37% to more than 11 million people.

Most pressing demand is in the water sector, as demand for water is predicted to exceed supply from as early as 2016.

Mr Johnson said: “This plan is a real wake up call to the stark needs that face London over the next half century. Infrastructure underpins everything we do and we all use it every day. Without a long term plan for investment and the political will to implement it this city will falter. Londoners need to know they will get the homes, water, energy, schools, transport, digital connectivity and better quality of life that they expect.”

The mayor plans to set up a London Infrastructure Delivery Board composed of senior representatives from all of the main infrastructure providers in London.

The draft plan not only sets out London’s needs but also proposes action, including:

  • Construction of Crossrail 2 and perhaps further Crossrail projects
  • Construction of a series of new river crossings and an inner orbital road tunnel
  • Construction of a new four runway hub airport in the Thames estuary to the east of the capital
  • An extra 9000ha of accessible green space needs to be provided to deliver more space for walking and cycling, flood mitigation, improved air quality, enhanced biodiversity and a cooler urban environment
  • Improved broadband connectivity
  • A short-term investment of £210m on electricity substations and longer-term exploitation of waste-to-energy technology
  • A new approach to water management, with new tariffs and better leakage detection
  • Waste reduction strategy based on circular economy principals, where goods are designed to be reused and recycled

The Mayor estimates the spending on London’s infrastructure needs to more than double, from an annual average of £16 billion in 2011-15 to £38 billion from 2016 to tackle an historic backlog of under-investment.

Estimates by consultant Arup suggest that the total investment in London’s infrastructure between 2016 and 2050 could amount to £1.3 trillion, although the purpose of consulting on this plan is to help agree priorities and determine how to reduce costs.

Boris Johnson is keen for all UK cities to have greater power over their own finances – so-called fiscal devolution. It is a campaign he is engaged in that may put him at odds with the Treasury and chancellor George Osborne. The two men are among those cited as potential future leaders of the Conservative party, so any conflict between them will doubtless be observed with interest by political commentators.

 Mr Johnson argues that fiscal devolution is vital and would give the city greater financial control over its transport, housing and other investments, and provide a base against which to borrow prudently. Public sector land and other assets could also be used more effectively, he argues. Combined with better integration and procurement, costs could be reduced by up to £150 billion, he suggests.

Arup director Alexander Jan said: “Infrastructure investment activity will be required on an industrial scale not seen since Victorian times. Only a concerted, properly resourced plan combined with proper devolution of tax raising powers to London government can secure the commercial success of London.”

A consultation on the London Infrastructure Plan 2050 will run for three months and the Mayor is expected to publish a final report in early 2015.

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The construction industry was swift to welcome the mayor’s vision, and all the lucrative building work that it implies.

BAM Nuttall CEO Steve Fox said: "We are encouraged by the visible commitment made by the Mayor and the GLA [Greater London Authority] to improving London’s infrastructure. It’s a strong signal to the industry and it gives confidence to major infrastructure contractors such as BAM who are heavily invested in London projects in setting our future business strategy. It means we can invest in people, training and our local supply chains across the capital to support the Mayor’s London vision in the longer term.

“We fully support the introduction of a London Infrastructure Delivery Board that will be able to influence and assist industry and the GLA by providing expert knowledge and advice. Having been involved significantly with HS1, Crossrail and the Olympic Park Development, which are huge success stories for our industry, we know that by working together we can all deliver a more successful outcome.

“The Mayor and his office have demonstrated leadership in developing procurement models that improve collaboration across our industry leading to added value and we welcome this approach. It is only by customer, contractor, designer and supply chain working together at a sufficiently early stage to develop the business case that we will see gains in overall delivery.”

David Tonkin, Atkins’ chief executive officer for UK & Europe, said: “People from all over the world want to visit, live and work in London and it plays a key role in the economic prosperity of the UK. World-class transport, utilities, energy and digital infrastructure are vital to maintaining this position and this long term, cross-sector investment plan is the vehicle that will help deliver these.

“As a company which helps cities all around the world to create a better future for its people, we applaud the GLA and the Mayor of London for taking this step to develop innovative and integrated proposals to repurpose and reuse existing infrastructure, while adopting and applying new technologies and techniques.”

Civil Engineering Contractors Association chief executive Alasdair Reisner said: “Our industry has long argued that long-term visibility of workload is essential if we are to play our part in delivering world-class infrastructure in an efficient and timely manner. An infrastructure plan for London which has cross-party support will encourage innovation, better resource allocation, an improved skills base and a more stable workforce throughout the construction sector.”

Tony Travers, director of the London School of Economics, said: “The London Infrastructure Plan is a necessary step towards understanding the needs of the ‘10 million city’ which London will soon become.  The capital’s railways, housing and schools will all require substantial investment just to accommodate the additional one and a half million Londoners who government statisticians forecast will live in the capital within 15 years.  In reality, with higher densities will come a disproportionately greater need for investment. The plan makes it possible to draw up proposals for developing schemes and raising resources.”

Cllr Claire Kober, London Councils lead member for infrastructure and regeneration, said: "London Councils welcomes the start of a debate about London’s long term infrastructure needs. With the challenge of continued population growth, infrastructure investment needs to ensure that London remains both a competitive world city and a liveable one for all its different communities. To meet this challenge, Whitehall must devolve power to London government and allow greater financial independence.”

 

 

 

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Garden leave

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July 30, 2014

/ The Construction Index UK News

In the future, we’ll all live in leafy, sustainable garden cities… or so some Edwardians believed. Today, that idea is being dusted off and taken out for another airing, to the delight of those in the construction industry. Will it take off this time? Mark Smulian reports

When George Osborne announces that 15,000 homes will be built, complete with supporting infrastructure, at Ebbsfleet in Kent – the nation’s first new ‘garden city’ for a century – it must have gladdened the hearts of everyone in the construction industry.

And when deputy prime minister Nick Clegg followed the chancellor’s comments with his own announcement that there would be three new garden cities in all, it must have been welcome news indeed.

Except of course that the Ebbsfleet site to which Osborne referred, sounded just as appealing in 2002 when it got outline planning consent. And it doubtless sounded just as good as recently as 2012, when the Department for Communities & Local Government said 22,600 homes would be built there, alongside the High Speed 1 railway station.

Cynics would therefore say it’s all talk. With work started on barely a few hundred homes, why should anyone in the industry take Osborne’s statement seriously? Talk about Ebbsfleet’s development is as speculative as talk about Prince Harry’s marriage plans, and about as reliable.

And since no garden city has been built since the 1920s, some may conclude that there are good reasons why the concept has fallen into disuse.

The phrase ‘garden city’ might, to builders with moderately long memories, reawaken memories of former prime minister Gordon Brown’s attempt to get a series of ‘eco towns’ started six years ago. Most of these were rapidly abandoned in the face of public hostility and municipal indifference.

The new garden cities, we are told, would be stand-alone settlements with their own infrastructure, schools, hospitals and, as far as possible, local sources of employment, all of which would make them quite different from conventional urban extensions.

But where, other than Ebbsfleet, can anyone find sites of sufficient size: empty yet well-connected by road and rail; where existing residents will not object loudly?

Letchworth and Welwyn – the only two garden cities ever built – are low-density places of attractive homes set amid extensive greenery and generally considered rather pleasant places to live.

New garden cities would thus face the immediate problem of needing enormous amounts of empty land to achieve anything like these low densities.

The government’s sudden enthusiasm for garden cities can be seen as a way to win public support for house building in areas of housing pressure.

Could modern versions win public acceptance (and so avoid the aggravation of contested planning applications) where developers’ attempts to extend existing towns fall foul of local opposition?

The government’s prospectus nails its colours to the mast by calling for ‘locally-led garden cities’. In other words, it’s up to each locality to suggest garden city sites rather than have the government impose them.

The prospectus states: “Unlocking large scale housing developments is critical to driving the supply of new homes in the medium to long term. They can offer a more strategic and thoughtful alternative to sequential development (or ‘sprawl’) around existing communities.”

It continues: “Development at a large scale creates the opportunity to secure real and important benefits: attributes that people most value – such as quality design, gardens, accessible green space near homes, access to employment, and local amenities – can be designed in from the outset.

“In short, garden cities are about far more than houses alone: they are about creating sustainable, economically viable places where people choose to live.”

Ministers set out a series of principles for their development (see box p35) drawn up by the Town & Country Planning Association (TCPA) – an organisation with its origins in the Victorian garden cities movement.

But there would have to be a body that could deliver such a large project over a long period, though the government has left open whether this would be a development corporation, as proposed for Ebbsfleet, or various public/private joint ventures and partnerships.

In return, any site chosen can expect government help with money and some rather unspecific things like ‘brokerage’ and ‘capacity support’.

What is missing is any new legal framework for garden cities. As it stands, it appears they would all have to go through the existing planning system, and as anyone who has grappled with that will realise all too well, an application for something as vast as 15,000 homes will be strewn with pitfalls. So, despite the Government’s enthusiasm, can anyone expect to see a garden city built other than at Ebbsfleet?

There would certainly be plenty of work were they to go ahead. Miles Gibson, director of the 2014 Wolfson Economics Prize – which offers £250,000 for the best paper explaining how garden cities could be developed – says: “At the proposed Ebbsfleet Garden City you could expect 30,000 construction jobs if the 15,000 homes ambition there is met.

“This is worked out using the government’s standard rule of thumb for calculating the number of construction jobs arising from new homes. You just double the number of homes to get the number of jobs. “Also of course there are construction jobs associated with the infrastructure and the shops, offices, etc, but it is more difficult to be certain about precise numbers.” Hugh Ellis, the TCPA’s policy director, thinks development corporations will be needed to deliver any garden cities. These would come armed with powers of land assembly, planning and compulsory purchase if necessary.

The original garden cities were all built to provide affordable housing but Ellis thinks a 60-70% proportion would now be more realistic, as would an expectation that most, though not all, residents would work in the immediate locality.

One point of controversy in the prospectus was that it said promoters of garden cities merely “may wish” to consider providing affordable homes.

Ellis says: “Creating mixed tenure homes, genuinely affordable housing for all budgets and a considerable level of homes for social rent constitute essential elements of the garden city principles.”

Garden cities would be paid for by development corporations owning the land and using the increase in its value to finance work.

Ellis explains: “The issue is the betterment in value between something that is agricultural land and something that gets planning permission for homes and is then worth millions.

“You can use that to repay debt for the development, which is how the new towns were built.

“Housebuilders normally use a very different model for speculative building but you would not have this here. They would simply be building houses as contractors for the corporations, as they do for social landlords. That means they would not have the profit from speculation but they would have certainty.”

Cathal Rock, who heads work on garden cities at the Department for Communities & Local Government, told a TCPA conference in May that the idea had evolved because “we face huge pressure with 221,000 new households every year to 2021 and we’re building 107,000 homes a year though starts are now 123,000 but that is an increase from a very low base.”

But he admitted the government knew of no similar project of such a scale in the UK and that the 30-40 year delivery period needs “very patient capital investors and will be a challenge for local authorities and housebuilders.”

A spokesman for the Home Builders Federation said: “We are in favour of garden cities so long as they mean an absolute increase in the number of new homes built and not just a different way of building the same number.

“We want to see what models are developed and one may be that house builders work as contractors where a development corporation owns and has assembled the land,  since that is different from a house builder buying land and seeking planning permission.

“That would make perfect sense, but this is going to be long term and will need support.” The same TCPA conference though saw the veteran architect and planner David Rock suggest that a garden city’s prospects would be poor indeed if it had to go through the existing planning system without any new streamlined method being provided for it.

Christine de Ferrars Green, a lawyer with legal firm Mills & Reeve specialising in residential development, agrees: “I certainly think they will need a legislative framework to deliver something on the scale required and neither the government nor Labour seems to be thinking about a national strategy for garden cities or new legislation. “That means they would have to go through the normal planning system. The eco towns, with which I was involved, foundered on political unpopularity but also on the slowness of the planning process.”

She says one key problem would be finding a suitable site within the area of one local authority.

If it crossed boundaries, “you are into the duty to cooperate, which really doesn’t mean much except showing that councils talk to each other and there might be a lack of local political support.

“The planning system works well normally, but I wonder if garden cities may need their own system.”

England is littered with the corpses of eco towns and with an earlier generation of new towns, many of which are now widely considered object lessons in how not to design a new settlement.

Will this new round of garden cities fare better? It all depends on suitable sites existing and then attracting local support. So, while 30,000 construction jobs per project would be great for industry, perhaps it’s best not to bank on it.

 

[This article first appeared in the June 2014 issue of The Construction Index magazine, which can be viewed in full at: http://epublishing.theconstructionindex.co.uk/magazine/june2014/]

 

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More than make do & mend?

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July 30, 2014

/ The Construction Index UK News

The road repairs backlog is growing, despite the industries efforts to ‘do more for less’. Will Mann asks the road maintenance sector what needs to change

The aptly-titled ALARM survey, published every April, rarely makes for happy reading. Commissioned by the Asphalt Industry Alliance (AIA), the survey (the acronym stands for Annual Local Authority Road Maintenance) invariably reveals a backlog of repair work. But what stands out most from this year’s is that instead of gradually working through this backlog, local authorities are falling further behind.

The total cost of bringing the country’s roads back into a reasonable state is estimated at £12bn – up £1.5bn on 2013. Little wonder the UK’s roads network is described as “not fit for a modern economy” by Civil Engineering Contractors Association chief executive Alasdair Reisner. But what, realistically, is likely to change at a policy level to address this?

“There has been massive underinvestment at local government level, and big pressure for five years for contractors to do more for less,” says Reisner.

“A big problem is that the funding is not ring-fenced. We find that roads funding too often gets diverted to social issues. So we end up with a ‘make do and mend’ approach.”

This was also identified by a National Audit Office report on maintaining roads, published on June 6th. “Stop/start funding makes long-term planning more difficult for highways authorities,” said Amyas Morse, head of the NAO. It also noted that ring-fencing of funding for the Highways Agency’s replacement (a new Government- Owned Company, or 'GoCo') would not address the problems faced on local roads, which make up 98% of the network. CECA and other industry trade bodies are pushing for longer-term settlements for highways maintenance funding.

“We need consistency of funding,” says Geoff Allister, executive director of the Highways Term Maintenance Association. “Businesses need to plan for a 10-year period going forward; big investment decisions – plant, materials – require a degree of certainty.”

Some forward-thinking councils have tackled the issue by financing a one-off hit to clear their backlog completely – which apart from better roads, also saves on the absurdity of insurance claims from injured motorists and pedestrians (a £30m annual cost). The maintenance industry would like to see others follow suit.

“A one-off up-front investment would take billions out of day-to-day maintenance – so you ‘invest to save’,” says Reisner. “Blackpool has used prudential borrowing to fund this, and other councils have used PFI. The quality of carriageway in these areas is very good, and they are very popular locally.”

Blackpool Council is in the final year of a four-year programme to replace 40 miles of its busiest roads, and a spokesman says the “vast majority of locals” are happy with what’s being delivered.

AIA chairman Alan Mackenzie also believes the Blackpool approach works “extremely well”.

PFI is less in favour these days, partly due to the cost, though Mackenzie observes that “as a longer term model, it offers the opportunity to exercise best practice”.

He adds: “Local authorities need support to allow them to borrow more in order to put longer term plans into place.”

But a concern at local government level is the lack of expertise in the sector – a consequence of the swingeing cuts post-2010.

“There are undoubtedly some skills gaps,” says Mackenzie. “Some skills and experience have been lost as a result of cuts made to personnel, recruitment, training and apprentice schemes during the recession.”

One highways maintenance business says “a tremendous problem for us is the lack of informed clients. The major groups like the West Midlands Alliance know what they’re doing – but others haven’t got a clue.”

The industry has tried to work with councils to develop their highways strategies.

“Collaborative working is very important,” says Allister. “Contractors work with local authorities to look at what’s feasible when they have downward pressure on their budgets, to ensure they use the money they’ve got well.”

Mackenzie stresses the need for longer-term planning. “Planned preventative maintenance, for instance, is at least 20 times more cost effective than filling potholes,” he says.

“Also, having an effective asset management plan allows councils to demonstrate the need, to councillors and the Department for Transport, and create a plan to effectively deal with the backlog.” The DFT, to be fair, appreciates the lack of long-term planning in highways maintenance. It is currently consulting on suggested mechanisms for distribution of funding for local highways maintenance for the period 2015/16 to 2020/21. It reports back in the autumn.

The department has also sponsored – to the tune of £6m – the Highways Maintenance Efficiency Programme to drive and share innovation and efficiency improvements across the sector. One of these innovations may be the increased use of BIM for asset management of highways which Skanska, among other contractors, is already using. “We held a highways maintenance forum for clients earlier this year and showed how BIM is used in building projects – and can also be used in other asset/life cycle management,” explains infrastructure services managing director Gregor Craig.

However, a barrier to the adoption of innovative thinking may be the reluctance of local authorities to take risks. And this is likely to be exacerbated by the hollowing-out of skills in council road maintenance departments during the past four years.

“Innovation carries a risk,” says Allister, “so councils can be reluctant, which is very sensible. But trials of new products and methods do happen, and there are controlled procedures to allow these trials to take place in the proper environment.” But there is only so much innovation the industry can introduce to stop the backlog getting longer. Ultimately, there is a need for a short-term funding solution – which inevitably means a political solution.

“Roads maintenance is a very big issue at a local level, but is less so at national level,” observes Reisner.

Blackpool has been championed by many in the industry as the model for other councils to follow. According to a council spokesman, the main tipping points for their new approach were “bad winters, insurance claims, and the general poor state of the roads”. But another source says that it was political pressure that heralded the changes, and more specifically, the council election of 2011, which brought in a Labour majority.

If the UK is to get “a road network fit for a modern economy”, it may be that a political solution will be required.

 

 

 

This article first appeared in the July 2014 issue of The Construction Index magazine, which can be viewed in full at: http://epublishing.theconstructionindex.co.uk/magazine/july2014/

While the magazine is free to view online, a subscription is required to receive you own hard copy every month. This can be purchased for just £35 a year at http://www.theconstructionindex.co.uk/magazine

 

 

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Taylor Wimpey sees 60% profits growth

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July 30, 2014

/ The Construction Index UK News

The improving housing market continues to lift building companies, with Taylor Wimpey today reporting 18% first-half revenue growth and profits up by more than 60%.

Revenue for the six months to 30 June 2014 reached £1,190.1m (2013 H1: £1,007.1m).

Profit before tax and exceptional items was up 64% to £178.4m (2013 H1: £109.0m). Operating profit was up 45% to £192.1m.

Taylor Wimpey completed 5,766 homes during the period (up 11%), of which 4,755 were for private sale. Of these, 42%, or nearly 2,000 homes, were sold with support from the government’s Help to Buy programme.  Its average selling price was up 10% to £206,000.

On the flip said, the company has had to pay out £116m to local community groups around the country to secure planning permission. Taylor Wimpey converted a record 7,195 plots from its strategic pipeline in the first half of the year.

Chief executive Pete Redfern said that the company was starting to see a narrowing of the north-south divide. “Particularly in the second quarter, we have seen greater balance between the regions, with increases in sales prices and sales rates outside of the strong London and the southeast markets,” he said.

 

 

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Improvement across the boards for Travis Perkins

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July 30, 2014

/ The Construction Index UK News

Builders’ merchant group Travis Perkins saw an 11.5% growth in group revenues in the first six months of the year and nearly 20% rise in adjusted pre-tax profit.

In the six months to 30 June 2014 Travis Perkins made £2,730.5m in revenues (2013 H1: £2449.5m).

Profit before tax, exceptional items and amortisation of intangible assets was £162.5m (2013 H1: £136.1m).

Reported pre-tax profit was £153.7m, up 14% from £134.7m for the same period last year.

All divisions saw growth in both sales and profits and are all outperforming their respective markets, the company said.

Chief executive John Carter said: "A combination of improving market conditions, increasing customer confidence and the successful introduction of a number of self-help initiatives has driven a strong first half performance.”

 

 

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Turnover up for Turner & Townsend

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July 30, 2014

/ The Construction Index UK News

Construction consultant Turner & Townsend saw its UK revenue grow by 11% to £148m for the year ended 30 April 2014.

Globally, gross revenue increased 12% to £357.4m, making it Turner & Townsend’s fourth successive year of growth. Group turnover has grown by 51% since 2011.

Pre-tax profit was up 12% to £33.3m.

Revenue net of subcontract costs was £322.2m, a 12% rise from the previous year's £286.3m.

The UK remains the company’s largest market, but there was 46% growth in the Middle East last year and 33% growth in Asia.

In the UK, an operating profit of £16.5m was made, thanks to projects including Crossrail and the Battersea Power Station redevelopment.

CEO Vincent Clancy said: “After four years of uninterrupted growth, Turner & Townsend continues to deliver record turnover while building further momentum towards our long-term objectives.”

Staff numbers at the year end were 3,660 (2013: 3,239) across 87 offices worldwide, with more than 55% of employees based outside the UK. New offices were established in Seattle, Phoenix, Chicago, Bogota, Rio de Janeiro, Hamburg, Maputo and Jakarta.

 

 

 

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McCarthy & Stone plans expansion

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July 30, 2014

/ The Construction Index UK News

McCarthy & Stone, Britain’s biggest builder of retirement housing, is opening a new office for north London and northern Home Counties in September.

It will be its first new regional office in 14 years.

The move is part of a planned investment of £300m in retirement housing in the region over next four years. It plans to build 1,800 new homes across approximately 70 new sites in north London, Buckinghamshire, Bedfordshire, Hertfordshire and Essex.

Nationwide, McCarthy & Stone plans to spend £1.5bn in new housing for older people by 2018 across 250 sites in the UK to deliver a total of 10,000 new homes.

The new regional office will be based in Colney Heath and headed by newly-promoted regional managing director Ali Maruf. He has been with McCarthy & Stone since 1997 and was previously land director for the area.

McCarthy & Stone is also widely reported to be in talks with City advisers about either a return to the stock market or a debt refinancing. The company used to be stock exchange listed until being taken private in 2006. McCarthy & Stone cut its net debt to £93m after a £527m refinancing last year.  At that time, new leadership was installed, with former Persimmon CEO John White as chairman and former Mount Anvil boss Clive Fenton as chief executive.

On the new expansion drive, Mr Fenton said: “The demand for high-quality retirement housing in North London and the northern Home Counties is growing substantially and we want to respond better to the needs of the local market.  Opening our first regional office in 14 years in North London is vitally important to us as we look to meet our growth plans and double the size of the business."

McCarthy & Stone sold 1,527 units across the UK in 2013 and is looking to sell more than 3,000 units a year by 2018.  In addition to the new North London region, the company expects to open further regional offices in 2015 and 2016, complementing its existing five regions in the southeast, southwest, the midlands, the north and Scotland.

 

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Builder's fine adds insult to injury

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July 30, 2014

/ The Construction Index UK News

A bodging builder who broke his back on a demolition job has now been fined for his safety failings that could have also put others in danger.

The message from the court could not be clearer: it was your own stupid fault.

William Batten, aged 66 and trading as Bill Batten Concrete Cutting & Demolition Service, was injured when he removed key timber supports at the corners of the roof of a temporary classroom, destabilising it and causing it to collapse on top of him. The collapse, in June 2013, was witnessed by schoolchildren in a nearby playground on their lunch break.

Mr Batten suffered a fractured vertebrae and neck injury. He was in hospital for a week but has since returned to work, albeit only on light duties.

An investigation by the Health & Safety Executive (HSE) found that Mr Batten had started work he was not supposed to. It identified that the roof of the temporary classroom had been supported by timber in each corner. Steel fixtures had been inserted to add additional structural support for the windows, but not the roof.

North and East Devon magistrates heard yesterday that Mr Batten’s firm had been contracted to demolish two buildings at Lympstone Church of England Primary School.

A soft strip of the temporary classroom took place on 11 June 2013 and demolition of the main structure by mechanical means was to be carried out on the following days when Mr Batten’s son, business partner and planner of the work, returned from leave. A further risk assessment and method statement was to also be submitted prior to the structural demolition going ahead.

However, after Mr Batten had finished the soft strip with two labourers, he decided to be extra-helpful and start further stripping work, including the removal of the timber supports to the corners and cladding.

He wrongly assumed that steel stanchions supporting the windows were holding up the roof.  When the wooden struts to the corners of the building were removed, the roof came down. The two employees narrowly escaped harm but Mr Batten, was trapped underneath the roof for several hours.

William Melvin Batten, trading as Bill Batten Concrete Cutting & Demolition Service, of Exeter Road, Kingsteignton, Devon, was fined £500 and ordered to pay costs of £868.90 after pleading guilty to breaching Regulation 29(1) of the Construction (Design and Management) Regulations 2007.

 

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Haymarket tunnels strengthening paves way for £200m development

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July 30, 2014

/ The Construction Index UK News

Contractors strengthening Edinburgh’s Haymarket railway tunnels in preparation for a major regeneration project above have released the first images of their underground works.

A team of up to 40 specialist contractors is working through the night over 14 months to carry out the job, avoiding disruption to rail services on one of Scotland’s busiest routes.

The site above the tunnels will be home to The Haymarket, a £200m development of shops, offices and hotels, with an underground car park. It is being developed by Edinburgh Haymarket Developments Ltd, a joint venture between Interserve and Tiger Developments.

Interserve development director David Westwater said: “This work is the main challenge before we can begin construction above ground. It will be early next year before we can do that, but then people will soon start to see the development taking shape. After such a long time as a gap site, we’re very excited about what The Haymarket has to offer and how it will help to create a real gateway at Edinburgh’s west end.”

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The strengthening works will allow contractors to begin building the foundations for the development. This includes grouting between the tunnel lining and the surrounding ground, and drilling and inserting metal bars within the brick lining.

Line possessions are only possible in the north tunnel between midnight and 5am, four nights per week, and in the south tunnel from 1am to 9.30am for one night a week.

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Groundworks specialist BAM Ritchies is carrying out the tunnel strengthening works. Project manager Angus MacGregor said: “We are very well experienced in complex rail projects but every situation is unique, so we’ve had to develop a very specific approach for this work based on the skills and knowledge of our team. There are many constraints to working on this site, but we have made good progress so far thanks to the working relationship we have with our client and Network Rail.”

Network Rail’s Gary Walker added: “Clearly our priority is to ensure that the works are carried out safely and with no disruption to rail passengers on this extremely busy section of the network. We have worked closely with Edinburgh Haymarket Developments and BAM throughout the design process over the last 12 months and it is pleasing to see work being carried out as planned.”

 

 

 

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Persimmon fined for scaffold collapse

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July 29, 2014

/ The Construction Index UK News

Leading house-building Persimmon Homes and one of its scaffolding contractors have been fined after two bricklayers were hurt falling from an unsafe scaffold.

Lincoln magistrates heard that the two men were working for Persimmon Homes Ltd on a development site in Ploughman’s Lane, Bunkers Hill, Lincoln, when the incident happened on 4th April 2012.

They were about to start work on a scaffold platform, 6m from the ground, which had been loaded with materials. Just as they started work, the scaffold collapsed and they fell approximately 2m onto a platform below.

A Health & Safety Executive (HSE) investigation found The Cathedral Scaffold Company Ltd had constructed the scaffold to bridge a narrow gap between the gable ends of two neighbouring properties. However, the company did not build it to a recognised design, which would have incorporated standards to transfer loads to the ground. They wrongly believed they could not fit them and a four board-wide working platform, as required by Persimmon, into the gap.

Instead they used a non-standard configuration of scaffolding but failed to carry out strength and stability calculations to ensure it was fit for purpose. The company issued a handing over certificate to Persimmon, setting out restrictions on the use of the scaffold. This identified it as a general purpose scaffold capable of supporting a specified distributed weight load, but because no strength or stability calculations were undertaken, this distributed load could not be guaranteed.

Persimmon subsequently overloaded the platform, causing it to collapse.

HSE found that the weight of just one pack of dry blocks distributed evenly over the platform would have taken it over the load limit – even without the men, tools or mortar on the platform. It was likely that the actual loading could have increased the danger as the blocks were all stacked towards one side of the platform.

 

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Persimmon Homes Ltd, of Fulford, York, pleaded guilty to breaching Regulation 8(b)(i) of the Work at Height Regulations 2005 and was yesterday (28th July) fined £8,000 and ordered to pay £10,426 costs.

The Cathedral Scaffold Company Ltd, of Dixon Way, Lincoln, pleaded guilty to breaching Regulation 8(b)(ii) of the same Regulations and was fined £4,000 with costs of £5,500.

HSE inspector Linda-Jane Rigby said after the hearing: “Unless a scaffold is a basic configuration described in recognised guidance it should be designed by calculation, by a competent person, to ensure it will have adequate strength and suitability. The design information should describe the sequence and methods to be adopted when erecting, dismantling and altering the scaffold. That did not happen in this case.”

 

 

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Contractors are now turning down London work

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July 29, 2014

/ The Construction Index UK News

Construction industry capacity shortages have prompted Mace to increase its forecast for tender cost inflation in London as contractors become increasingly picky about projects they take on.

Mace’s cost consultancy division reports that contractors are now turning down work in the capital as they are able to pick and choose their jobs. With competition falling, margins are rising, it says.

The surge in demand has led Mace to increase its forecast for London tender cost inflation from 3.5% to 4.5% for both 2014 and 2015.

Outside of London, there is still enough capacity across the UK to meet demand, as well as steady competition. This continues to subdue price increases. Mace’s forecast for average inflation in tender prices has therefore remained unchanged at 2% for 2014, rising to 2.5% in 2015 and 3% in 2016, by which time it is expected that the general economic recovery will have increased demand for construction across the regions.

The performance of private commercial work is also increasing, with the London office market proving to be increasingly active. However, across the rest of the country, Mace Cost Consultancy has found that the supply of private commercial space is still sufficient to meet general demand, confirming that this sector has not yet recovered across all UK regions.

In what Mace’s tender cost update calls the ‘next stage of the UK economic recovery’, capital investment has increased consistently over recent quarters. Business investment, one of the main components of fixed capital, grew by 5% to £33.4bn in the last quarter and is the highest since 2008 following five quarters of consecutive growth.

Mace Cost Consultancy managing director Chris Goldthorpe said: “While it is still possible to obtain competitive tender returns in the regions, the London market has seen contractors unable to meet the rising demand, resulting in a selective response to tender invitations and an unwillingness to take on risk.  It is now a regular occurrence for contractors to turn down tender opportunities, particularly if they involve single stage tendering, incomplete design information or significant construction risks.  We are also seeing overheads and profit allowances increasing to levels that have not been seen for the last five years as competition is reduced.”

 

 

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Noise-cancelling fences in development

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July 29, 2014

/ The Construction Index UK News

Scientists have come up with a way of using noise cancelling technology for acoustic barriers alongside roads and railway lines.

Sonobex Limited, a newly formed spin-out from Loughborough University, has funding from the Technology Strategy Board, to bring its SonoBarrier acoustic fences to market.

The first CE mark prototypes are expected to be produced by February 2015, the company says.

Sonobex uses a patented acoustic meta-material technology called sonic crystals, which are fabricated materials designed to control, direct and manipulate sound. Sonobex sonic crystal based noise reduction technology is a passive method that superimposes disturbing noise with scattered anti-acoustic noise to cancel out the disturbance. Designs are tuned to particular dominant frequencies to achieve significant reduction levels.

Sonobex has a £358,000 budget for its project, with an anticipated £161,000 from the Technology Strategy Board.

Sonobex chief executive Paul Gooch said: “Sonobex is delighted to have secured this funding. These next generation acoustic barriers will revolutionise the market, true performance measured in-situ under the new CE will differentiate these products from current market solutions and provide the protection required and expected.”

 

 

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Nimbys in retreat

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July 29, 2014

/ The Construction Index UK News

The number of people who do not want new homes being built in their neighbourhood appears to be in decline.

The latest social attitudes survey conducted on behalf of the government found that opposition to new homes fell substantially between 2010 and 2013, with 46% saying they would oppose new homes being built in their local area in 2010, compared to 31% in 2013. The proportion that was supportive increased from 28% in 2010 to 47% in 2013.

The strength of opposition for new homes has also decreased. The proportion of respondents stating they would strongly oppose new homes being built in their local area almost halved from 15% in 2010 to 8% in 2013. At the same time the proportion of respondents who said they would strongly support new homes more than doubled from 5% to 11%.

Unsurprisingly, those who own their own homes are more likely to oppose new developments changing the face of the neighbourhood in which they have invested.

37% of owners were opposed, compared to 17 % of council tenants, 20% of private tenants and 21% of housing association tenants. Between 2010 and 2013 opposition fell by a similar proportion for all tenure groups.

 

Source: Public attitudes to new house building: findings from the British Social Attitudes Survey 2013

 

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Balfour lands £24m RCM student housing

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July 29, 2014

/ The Construction Index UK News

Balfour Beatty has won a £24m contract to build accommodation for more than 400 students of the Royal College of Music in London.

Client for the project is Campus Living Villages and completion is scheduled for September 2015.

The accommodation on Goldhawk Road in Shepherd’s Bush will replace existing facilities that Balfour Beatty will also demolish. The new development will have 417 new bedrooms, two self-contained flats and amenities including a gym, laundry, cinema and music practice rooms.

The bedrooms will have acoustic features to enable music students to practice without disturbing others, as well as an open plan central amenity space that breaks out onto external courtyards and an informal performance space.

The building has been designed to be BREEAM ‘Excellent’, with roof mounted photo-voltaic arrays, LED lighting and on-demand heating systems for individual bedrooms.

Other student accommodation projects that Balfour Beatty is currently building around the UK include the Holyrood Postgraduate Student Accommodation & Outreach Centre for the University of Edinburgh and 199 Westminster Bridge Road in London for Urbanest.

 

 

 

 

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Wates takes youth trust chair

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July 29, 2014

/ The Construction Index UK News

Wates Group director Andy Wates has taken over as chairman of the Construction Youth Trust.

He succeeds Rod Bennion, chairman of McNicholas and Mabey Group, who was chairman of the trust for 12 years and on the board for 14.

Construction Youth Trust works with young people from challenging backgrounds to help get them into the construction industry. Andy Wates has been a director for nine years already.

Andy Wates is one of five Wates family members on the company’s group board and the fourth generation of the family at the helm. He joined the Wates Group in 1995 after six years with Costain and John Shreeves & Partners. He is now Wates Group's portfolio development director, looking after long-term investments.

Mr Wates said: "Our vision with the trust is all about inspiring and enabling young people to overcome barriers and finding them work in the construction industry, and now with construction coming out of the recession there are fresh opportunities for us to create more apprenticeships. I really do have so much respect and admiration for what the trust does."

 

 

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Electricians reject 5% pay offer

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July 29, 2014

/ The Construction Index UK News

Unite shop stewards are to decide next week on possible industrial action after electricians and labourers in the union rejected a 5% two-year pay deal in a consultative ballot.

Unite said that the offer was ‘woefully inadequate’, given soaring household bills.  It added that its members are also unhappy that employers want to introduce a ‘new entrant’ grade with an 18-month probationary period with a pay rate 25% below the labourers’ grade.

The union was offered a 2% rise from January 2015 and 3% from January 2016 – 5.06% over two years. Unite balloted more than 7,000 electricians and labourers and by a margin of 91% they rejected the pay package. Average pay of an electrician is currently £29,000 a year.

 Unite national officer for the construction industry Bernard McAulay called for the Electrical Contractors’ Association and its Scottish counterpart Select, which together represent more than 1,000 employers, to return to the negotiating table.

“The pay offer is woefully inadequate as the cost of living continues to soar. Pay packets are being eroded in real terms, while companies still chalk up handsome profits,” Mr McAulay said.

He described the proposed ‘new entrant’ grade as “a bid to drive down wages of highly skilled workers”.

Mr McAulay added: “The decisive result of the consultative ballot clearly demonstrates that the workforce cannot be bought off when the future stability of the industry grading structure and hard won skills sets are being put at stake.”

Unite shop stewards from across the country will meet on Monday 4th August to decide the next steps, which could include an industrial action ballot.

 

 

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New rules to promote fracking

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July 28, 2014

/ The Construction Index UK News

Companies wanting to drill for natural gas deep under the UK have been invited to apply for licences under a new planning regime designed to promote fracking.

The government has today published details of how companies can apply for these licences to speed up the development of fracking in the UK.

In a sop to those who argue that pumping chemicals deep underground to release natural gas is hazardous and potentially polluting, the government has said that it would allow fracking in National Parks, Areas of Outstanding Natural Beauty and World Heritage Sites but only if there were “exceptional circumstances” or it was “in the public interest”.

Communities minister Lord Ahmad of Wimbledon said: “Effective exploration and testing of the UK’s unconventional gas resources is key to understanding the potential for this industry – so the government is creating the right framework to accelerate unconventional oil and gas development in a responsible and sustainable way.

“We recognise there are areas of outstanding landscape and scenic beauty where the environmental and heritage qualities need to be carefully balanced against the benefits of oil and gas from unconventional hydrocarbons.

“For this reason, I am today making clear our approach to planning for unconventional hydrocarbons in National Parks, the Broads, Areas of Outstanding Natural Beauty and World Heritage Sites. Proposals for such development must recognise the importance of these sites.”

The licences provide the first step to starting drilling. Planning permission will also be needed, as well as permits from the Environment Agency and sign-off from the Health & Safety Executive.

Business and Energy Minister Matthew Hancock said:  “As one of the cleanest fossil fuels, shale gas can be a key part of the UK’s answer to climate change and a bridge to a much greener future.”

 

 

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Didcot towers come down

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July 28, 2014

/ The Construction Index UK News

Three 100m-high cooling towers at Didcot power station were brought down in a controlled explosion yesterday.

Birmingham-based demolition contractor Coleman & Co is working on a three-year project to pull down the redundant Didcot A plant in Oxfordshire.

At 4am on Sunday 27th July, three of the six cooling towers were reduced to rubble in less than 10 seconds.

Kevin Nix, head of RWE Generation UK, said: ”Although this is a sad day and the end of an era in many ways, I am very pleased that the technically challenging demolition of the southern cooling towers has been carried out successfully and above all with the safety of all those involved, including the local community, as its highest priority. This is entirely due to months of pre-planning and the professionalism of the specialist teams involved.”

RWE Generation UK announced the closure of the 2,000MW coal-fired Didcot A power station in September 2012 after 42 years of service. The station closed on 31st March 2013 and the nine month decommissioning process finished in November 2013.

RWE's neighbouring 1400MW gas-fired power station, Didcot B, will continue to generate electricity generation for many years to come.

Coleman & Company is continuing to clear the rest of the site, including the northern cooling towers and the chimney stack, to be completed by the end of 2016. (See our previous report here.)

Yesterday’s demolition was live streamed over the internet in a bid to keep spectators away. Several hundred still turned up to watch it, however.

 

 

Setting the charges…

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The event attracted a lot of media attention. Even the final pre-blast plannign meeting was filmed.

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AI workers join glow-in-the-dark brigade

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July 28, 2014

/ The Construction Index UK News

Latest construction company to buy into glow-in-the-dark hi-viz gear is Aggregate Industries.

Based in Scotland, both the asphalt and highways divisions of Aggregate Industries (AI) have purchased the Fhoss Technology powered light safety wear for their on-site workers, to allow them to be more visible in the dark.

Unlike traditional reflective tape, which works by reflecting off an additional light source, Fhoss’s technology allows workers to be light up without the need for ambient light.

Danny Taggart, site manager with the Scottish asphalt division of Aggregate Industries, said:  “When wearing Fhoss, it is really noticeable just how much the boys on the ground stand out in the dark. Unfortunately, there are always going to be some areas of our site where ambient light is not present. However, with Fhoss, this doesn’t matter. When wearing their jackets, my men can be seen at all times, with or without the presence of an additional light source and from a good distance away. “

 

 

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Planned spending on infrastructure reaches £383bn

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July 25, 2014

/ The Construction Index UK News

The latest update of the government’s National Infrastructure Pipeline says that planned investment has now increased to £383bn up to 2020 and beyond.

The previous update in December put the value at £375bn.

The sectors with the largest values of planned spending are energy with almost £204bn identified and transport, with a value of more than £140m.

The Pipeline, which is converted into an interactive map format by Barbour ABI, is designed to increase the visibility of future infrastructure investment in both the public and private sectors. It is reviewed every six months to ensure new opportunities are reflected and more details are provided as they emerge.

Michael Dall, lead economist at Barbour ABI, said: “This latest Pipeline update will come as very positive news for the construction industry. With the Pipeline representing more than £380 billion of planned infrastructure investment over the coming years, the construction industry will receive a much-needed boost just as the latest output and new contract figures seem to indicate that the high rate of growth is slowing.

“While there have been concerns recently that the industry is becoming too reliant on the housing sector, this Pipeline will offer greater visibility and understanding of the potential opportunities available in the infrastructure sector too.

 

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