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Wed July 08 2020

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Build build build: The construction industry responds

30 Jun The prime minister’s speech on using construction to revive the economy has been largely welcomed by construction industry representatives.

Bowmer & Kirkland hosted the obligatory prime ministerial site visit
Bowmer & Kirkland hosted the obligatory prime ministerial site visit

Not everyone, however, is prepared to take his words at face-value.

As previously reported, prime minister Boris Johnson has promised to ‘build, build, build’ – with a £5bn programme for hospitals, schools, roads and more. [See our earlier report here.]

He also plans to make it easier for the private sector to develop its own projects.  A wider range of commercial buildings, including failed shopping centres, will be allowed to change to residential use without the need for a planning application.

Under new laws to come in by September, developers will no longer need a normal planning application to demolish and rebuild vacant and redundant residential and commercial buildings if they are rebuilt as homes.

Further planning reform proposals will be published in July.

Construction industry trade associations and representatives were swift to respond. Most were enthusiastic about getting some attention. Others were less susceptible to the hype until they see the small print.

Build UK said: “We welcome the prime minister's comments today, which clarify the government’s commitment to the infrastructure revolution and levelling up the UK. This is a chance to not merely restart, but reset and reinvent the delivery of infrastructure projects and drive the economic recovery.”

Civil Engineering Contractors Association director of external affairs Marie-Claude Hemming said: “Back in April we called for a plan to get our industry back to work, and we need to build on this to secure our national recovery with sustainable investment in infrastructure. We welcome the prime minister’s announcement that an infrastructure delivery task force, to be chaired by the chancellor, will be created to speed up project delivery. CECA has a group of members ready to support this work. We stand ready to support every effort the government is making to boost the economy.

“At the same time, we are anticipating major spending announcements to be made in the autumn, and are keen to work with government to ensure the steps taken are adequate to the mammoth task of re-orientating the economy towards growth. There are gains to be made in stamping out waste in project delivery, and ensuring schemes come forward to market more rapidly.  The prime minister won his majority last year by promising an ‘infrastructure revolution.’ In order to return the UK economy to growth, we must turbocharge our sector, so that our members can build our way to recovery.”

Hannah Vickers, chief executive of the Association for Consultancy &Engineering (ACE), said: “Overall we welcome the ambition, but it needs to quickly translate into tangible action on the ground. The primary challenge we’re facing as an industry is less about “build, build, build” and more about “deliver, deliver, deliver” and while we may wish to speed up programmes and projects, this won’t be possible without business confidence. Communication of concrete proposals gives businesses in our sector the assurances to retrain and reskill workforces accordingly and while the IPA’s recent procurement pipeline was a positive step in the right direction, it now needs monthly updates by Government departments to provide additional clarity.

“We’re delighted to see that, once again, infrastructure and construction’s vital role as a catalyst for a wider recovery has been recognised with a major political speech. We’d also like to stress that in the rush to deliver rapidly we shouldn’t forget society’s Net Zero aspirations, levelling-up through the support of local jobs, and ensuring SMEs have access to government programmes and projects. However, the prime minister can rest assured that we’re ready for the challenge of helping to deliver an economic recovery and in reinventing how we deliver for society.”

He also visited Speller Metcalfe’s Institute of Technologies (IOT) project in Dudley
He also visited Speller Metcalfe’s Institute of Technologies (IOT) project in Dudley

UK Green Building Council (UKGBC) chief executive Julie Hirigoyen said: “We asked for ‘Build Back Better’, but what we’ve got is ‘Build Build Build’. If we do not seize this moment, and take the opportunity to underpin our recovery plans with climate ambition, we will not achieve our target of net zero emissions by 2050. Yet the plans announced by the PM today make no reference to energy efficiency – perhaps the most urgent of all infrastructure priorities - that can create jobs right around the country, improve health and reduce costs to NHS, and increase consumer spending power by lowering energy bills. All this despite universal support for a national retrofit strategy over the past few weeks from wide ranging industry and academic institutions, and a 2019 manifesto promise of £9bn in insulating our draughty homes.

“We welcome a focus on levelling up the fortunes of individuals right across the country through investment in new homes and infrastructure, but a frenzy of building is not equivalent to building back greener. Such investment must be underpinned by the highest quality outcomes including efficiency, net zero emissions, waste avoidance, social value and biodiversity net gain. Yet on the basis of current Building Regulations and planning standards, none of these outcomes would be guaranteed.

“I sincerely hope that the chancellor's budget announcement next week will provide much-needed detail on the way this government will practically ‘build back better’.”

The GMB union pointed out that £5bn spending boost was not as grand as it sounded. GMB national secretary Jude Brimble said: “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.”

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Rob Oliver, chief executive of the Construction Equipment Association, said: “The promised escalation of investment in infrastructure is exactly what we called for in our recent letter to the chancellor. Priming the construction sector will help avoid unnecessary redundancies and provide us with better roads, school and hospital buildings and more. The real prize is if this leads to the adoption of the newest technologies so that we do indeed ‘build back better’. CEA members have a great part to play in this with the new generation of environmentally friendly machines with their revolutionary digital systems that ensure that they are operated in the most efficient and productive way.

“The adoption of the newest technologies does, of course, require new investment from plant hire companies and contractors. Like most businesses they have been flattened by the Covid-19 emergency, so we also call for an imaginative approach from the Treasury to allow our customers to renew their plant and equipment with confidence. This can be done through a combination of additional tax allowances on capital expenditure and a scrappage scheme to add some ‘vroom’ to Project Speed.”

National Federation of Roofing Contractors chief executive James Talman said: “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.”

Confederation of British Industries (CBI) director-general Dame Carolyn Fairbairn said: “The economic impact of the global pandemic risks fracturing communities for a generation. Plans for a jobs-first recovery, underpinned by a restorative injection of infrastructure investment, could help limit the damage and set the UK on course to build back better.

“The prime minister’s commitment to upgrade and decarbonise our transport infrastructure, in all UK regions and nations, lays strong foundations. Upgrading and building new English schools, prisons and hospitals will mobilise the construction industry supporting millions of workers and job opportunities. And cutting red tape should help prioritise the building of widely available, truly affordable homes. Together with commitments on R&D and innovation, these are the first steps on the path to recovery.

Foundations are there to be built on. More is needed to prevent the uneven scarring unemployment leaves on communities. Guaranteeing apprenticeships and in-work placements are a start. Details are needed now so providers are ready. Other ideas business would like to see include further wage support to protect jobs, a new jobs programme to create opportunities and more funding for future skills in high potential areas such as digital, low carbon and health.

“The reality is that longer-term plans will falter without continued help for firms still in desperate difficulty. Government intervention so far has saved countless jobs, yet anxious months for many still lie ahead. The focus on rescuing viable firms cannot slip while the UK looks to recovery, or earlier efforts could be wasted.”

Paul Gandy, managing director of Interserve Construction, said: “As one of the country’s leading education and healthcare contractors we welcome the prime minister’s announcement to get Britain building again. A 10-year infrastructure plan for education and the NHS provides the construction sector with a decade-long time frame in which it will create valuable skilled jobs – particularly in the regions.

“As we bounce back from the Covid-19 pandemic, a return to construction activity will underpin a fast and effective way to begin the process of economic recovery. When it comes to ‘shovel-ready projects’ that will deliver the recovery and put local people to work, it is the more modest education and healthcare infrastructure projects that will deliver short and medium-term economic results.

“It’s a strategy that will create jobs, put money in people’s pockets and train a new generation of skilled workers acting as a catalyst for growth that will deliver tax income for HMRC.”

Balfour Beatty chief executive Leo Quinn said: “The prime minister’s commitment to accelerate the UK’s long-term infrastructure pipeline is a critical factor for the country’s recovery. As well as stimulating regional and national economies, it will generate vast employment opportunities across the country and help provide our younger generations with employable skills. Without this, following the fall-out from Covid-19, we could see widespread structural unemployment issues.

“It is a commitment I welcome warmly, but our industry must prioritise sustainable, digital and innovative solutions in our delivery. In doing so, we will safeguard our future capabilities and provide certainty for the workforce of tomorrow”.

Jon Hart, infrastructure partner at law firm Pinsent Masons, said: “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.”

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