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News Round-Up: January 2010

11 January 2010

Insurers review timber frame

Insurers are reassessing the cover they provide on timber-framed structures in the light of November’s devastating Peckham fire and an increase in fire-related costs.

Tom McMillan, regional claims manager for Quinn Insurance, urged contractors to take urgent steps to mitigate the risk of fire in timber-framed buildings to keep premium increases in check.

“The building sector has to start to learn from incidents like Peckham and take appropriate action to mitigate the effect. Fire damage and the subsequent cost to local authorities, the industry and the general public will continue to increase until appropriate action is taken,” he said.

Insurers will increasingly expect to see more active fire protection systems in place, such as infrared optical smoke detectors and sprinkler systems fitted to unfinished frames, according to McMillan.

The Peckham fire coincided with the release of figures from the Association of British Insurers that showed the cost of fire damage in 2008 reached £1.3bn, a 16% increase compared with 2007. The total includes £865m in fire damage to commercial premises.

More than 50% of commercial and industrial fires are started deliberately, and McMillan said cases of arson were known to increase in a recession.

Meanwhile, the UK Timber Frame Association, which represents timber frame manufacturers, has also accelerated implementation of its Sitesafe scheme.

Eighteen months ago, in the wake of the major fire at Colindale, north London, the UKTFA issued a 16-point fire safety plan for its members to bring to the attention of main contractors. However, the UKTFA had no powers to enforce the system.

From 31 January, the UKTFA will be auditing its members to ensure that its safety risk assessment system has been adequately communicated to developers and contractors. The scheme will apply to timber-framed structures of four storeys or more, or above 2,500m2.

However, as UKTFA chairman Geoff Arnold concedes, the question of what happens once the timber frame company has left the site – as was the case at Peckham – is still a “grey area”.

“We would hope that the CDM coordinator working with the client takes [the issue] on after the timber frame contractor leaves the site. But if adequate measures are in place when we’re there, such as a nightwatchman, we wouldn’t expect them to be removed,” he said.

James Wates, CIOB Vice President

Q&A James Wates

James Wates, deputy chairman of Wates and CIOB vice president, will take office as CIOB President in June.

What are your aspirations for the industry in 2010?
The industry is under threat from cuts in government capital spend, which could have a serious impact on its long-term structure. The CBI/LEK report (CM Nov/Dec page 5) is a piece of work everyone involved in the industry has to promote. It articulates why construction is a good industry to invest in – for example, 92% of investment would stay in the UK economy. As chair of the UK CBI Construction Council, I would make the case that the government should cut spending elsewhere.

How can the industry respond to the post-credit crunch economy?
There are certainly opportunities to challenge the existing contractor model. A well-run contractor has strong cash balances and can use that to create value. Traditionally, cash balances have been reinvested into housing, but there are other ways of creating value. At Wates, we’re looking to do things differently, to be more creative in our relationships with our customer base.

What are your plans as CIOB President?
Having had two overseas-based presidents, there is a possibility that the UK branches have a bit of a feeling of disconnection, although both Keith and Shirong have both been outstandingly good presidents.

So there’s an opportunity to have a strong connection with the branches. Any other plans at this stage?
Another theme will be diversity. The Equality and Human Rights Commission report [on racial diversity in construction] was very critical of our agenda, and to some extent rightly so. As an industry, we have to try harder, and work doubly hard to recruit and retain talented people.

What are your views on the CIOB’s moves to redefine “construction management”?
I’d like [CIOB membership] to be almost a licence to practice, like RICS and RIBA. Graduate trainees should see membership as the pinnacle of the profession of construction management, and see it a springboard from construction management to general management.

Well done you're hired!

A group of youngsters from Wales will get an exciting introduction to construction this year as they take part in the industry’s equivalent of The Apprentice.

The Construction Youth Trust (CYT) is organising the site-based competition, in which a dozen 18-25-year-olds with no previous building education or training prove their skills over 10 weeks while refurbishing two properties in Wales.

The 12 will be selected based on their responses to adverts in the local press, and the overall winner – chosen on their effort, commitment, determination and talent – will be offered an apprenticeship within the construction industry.

Lisa Nelmes, Wales co-ordinator for the Construction Youth Trust, is organising the competition.

“Similar to the TV series, they’ll each be given a range of tasks and challenges to complete as they renovate an entire house from start to finish.”

The project is funded through £50,000 of Big Lottery Fund money, which was awarded after the Welsh public voted for the CYT scheme during The People’s Millions TV contest in Wales last November.

The competition will also equip them for a career in industry, she adds. “Experts from [social housing contractor] Connaught, [youth charity] Rathbones and the CYT will deliver the training, which will include skills in building, project management, surveying, interior design and sustainable construction.”

The first house, in Penrhys-Rhondda Cynon Taff, is owned by RCT Homes and will be refurbished between January and May. The second, owned by Newport City Homes and will get a makeover between July and November.

Training guidance issued

New guidance on extending the benefits of construction investment to communities and local workforces has been issued by the Department of Business Innovation and Skills and the National Skills Academy for Construction.

Public sector clients such as the Homes and Communities Agency and local authorities are expected to embrace the guidelines, which set out government expectations on the creation of apprenticeships and other community benefi ts.

The guidelines include template clauses for inclusion in standard JCT and NEC3 construction contracts, framework agreements and bespoke project agreements.

Skills minister Kevin Brennan said: “Over the next three years, government is aiming to secure 20,000 apprenticeships through public procurement and we hope the construction industry will help to contribute to this ambition. A number of these apprentices will have the opportunity to train with companies working towards a low carbon future within construction.”

The National Skills Academy for Construction is a partnership between Construction Skills, employers, clients and training providers. Where contractors sign up to the initiative, sites can become training academies where workers gain qualifications without the need to leave site.

Hardship grants in debt-stricken Dubai

As the financial crisis in Dubai continues, CIOB members in the emirate are facing the fall-out of abandoned projects, missed payments and redundancy. But the CIOB is stepping in to offer financial support and training to members adversely affected by Dubai’s economic crash.

Christine Gausden FCIOB, chair of the Institute’s Dubai centre, says the recent troubles are a blow for members who have already been struggling in the region.

“Numerous personnel have departed Dubai and several sites have literally ground to a halt and not even received a proper close out,” says Gausden. “I myself am seeking work, having been made redundant in June 2009, as are a number of my colleagues in Dubai, plus members in Abu Dhabi and Oman.”

Bye bye Dubai?

December 2008
Wave of job losses for Dubai-based staff announced. Firms affected include Mace, Atkins and EC Harris.

Feb 2009
Research firm Pro leads finds 180 schemes worth $400bn have stopped in UAE.

March 2009
Dubai developer Nakheel shelves £2bn plans to build five shopping malls across the UAE.

October 2009
Colliers CRE International research finds 25% of Dubai’s offices are empty and rents have slumped 58% in a year.

December 2009
The Association for Consultancy and Engineering estimates £3bn is in dispute between Dubai-based clients and global construction firms.

The CIOB is offering practical assistance in the downturn, according to Fabio Casula, the CIOB’s head of international operations. “Members in financial or personal difficulty can apply for a hardship grant through the Institute’s benevolent fund. The Dubai office can also provide assistance with CV writing and interview skills to those made redundant or facing redundancy.”

The downturn has also prompted a significant rise in new applications for CIOB membership in Dubai, says Casula.

“This perhaps indicates that people see professional qualifications as a means of gaining an advantage in the increasingly competitive job market as well as a means of securing work in other middle eastern countries,” he says.

Members searching for new employment in the region are also urged to contact the CIOB’s recruitment partner Hays Recruitment at its UAE office.

The emirate hit the headlines at the end of November when Dubai World, the development arm of the Dubai government, asked creditors for a six-month moratorium on its £35bn debt pile.

Dubai World’s subsidiaries include Limitless and Nakheel, the developer behind the planned World Islands scheme.

The news provoked panic among many UK firms that had struck deals with Dubai World companies, and were already having difficulty recovering payment. It’s thought around £250m is still owed to British construction firms in the UAE. The consultancies affected include Hyder, WSP, Mouchel, Atkins, Scott Wilson and Cyril Sweett. Share prices of UK contractors and developers active in

Dubai also fell in response to the news. But in mid-December, Dubai appeared to be rescued from the brink, when its government received a $10bn injection from its neighbour Abu Dhabi to help pay off the debt.

Libya offers university opportunity

Gharyan University, located in mountains south of Tripoli, is one of 25 universities under way in a $5.2bn programme for the Libyan government. Hill International is acting as project and design manager for Libya’s Organisation for Development of Administrative Centres (ODAC).

Construction is in the hands of a range of international contractors, including firms from Turkey, China and Portugal.

“British contractors have been here to have a look, but it’s a difficult environment for them to be competitive in,” says Eric Butterworth, UK managing director for Hill International Project Management.

“But there’s at least 10-20 years of major construction investment to come in Libya, and I think we will see British contractors here in due course,” he added.

Gharyan and nine other campuses have been designed to RIBA Stage D by the Manchester office of architect BDP.

Industry gets social network site

THE CIOB is urging members to sign up to a new professional social networking website that’s being billed as construction’s answer to Facebook.

The Construction Network (TCN) launches this month and includes many of the functions familiar to social media and professional networking sites such as Facebook, LinkedIn and Twitter, but with added features to make them relevant to professionals in property, construction and the built environment.

Individuals or companies who join can set up a searchable profi le and interact and debate with other users in community groups covering topics such as marketing, advertising, business development, quality control, or customer care. Users will be able to post industry specific news, blogs, discussion threads, videos or polls. In similar fashion to Twitter they can also “follow” companies’ news, events, products or services, and receive updates direct to their homepage.

Many social media sites focus on users generating a large contact base, but TCN’s focus will be on the quality of contacts, says managing director Ryan Briggs. Access to the site is free for individuals who belong to TCN’s sponsor organisations, which include employers, and professional bodies, including the CIOB. Individuals not linked to a sponsor can still join for free, but must prove their involvement in the industry.

Sponsors already signed up include Balfour Beatty, Mace, Schuco, CIBSE, Loughborough University and North West Kent College. Additional sponsors can join – ensuring their personnel have free access to the site – by paying an annual fee.

“All chartered members will be invited to join for free and will therefore be best placed to start making connections and familiarising themselves with the site,” adds Briggs. “As an official partner, the CIOB will also help develop the site in future and perhaps help expand its reach to America and Asia.”

The emphasis will be on sharing information and best practice, rather than recruitment or finding new work, says Briggs. “Extensive feedback from the industry showed that recruitment wasn’t a priority, so there is no access to third party recruitment organisations, search firms or consultants. However, employers will be able to post vacancies directly on the network,” he explained Michael Brown, deputy chief executive of the CIOB, says: “Social media really does allow us to engage our fragmented industry in a way that has never been possible before. For CIOB members TCN will link users and create a free exchange of information, with the potential to generate business opportunities as well.”

Diploma gives site workers a route to MCIOB

Staff with site management experience but limited formal educational could benefit from a new diploma in construction practice from the College of Estate Management (CEM).

The two-year distance learning course teaches students the basics of construction management and helps them achieve CIOB associate membership (ACIOB), which provides a route to BSc degree programmes and corporate membership (MCIOB).

‘It’s a foundation-level qualification targeted at employees who want to down their tools and get into the site hut,” says Gary Reynolds, head of construction studies at CEM. “They need that academic foothold to get into management.”

The first course starts in March and requires 15 hours study a week for 42 weeks a year.

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