News roundup: February '11

9 February 2011

Support for NSCC campaign

A campaign by the National Specialist Contractors Council (NSCC) to banish retention funds has gained support from some CIOB Chartered Building Companies, although others feel the system is still useful in driving performance.

Typically, a client or main contractor will withhold 5% of the total contract sum, promising to release half on completion and the remainder after a year or more.

But NSCC chief executive, Suzannah Nichol, said: “Our members are financing the industry through retention funds, which massively increase their costs.

If their profit margin is 2% and if the retention withheld from them is 5% … well, you do the maths.”

Philip Hall MCIOB, managing director of Oxford-based CBC Hall Construction, said: “I would support the campaign because retentions are grossly unfair. We do not hold retentions on our subbies. The only solution is a joint account or bond.”

Hall adds that he has heard of cases where clients hold a retention from a main contractor for six months, but put their sub-contractors on 12-month retentions.

The NSCC is stepping up its efforts to consign retentions to history after securing victory in its Fair Payment Campaign. The introduction of 30-day payment schedules for Tier 1, 2 and 3 contractors on government contracts was confirmed by Whitehall last December.

The NSCC points out that industry reports, from Banwell in the 1960s to Latham in the 1990s, have called for retentions to be abolished. On London’s Crossrail project, the client is not holding retentions itself, and has banned its main contractors from using them.

Giles Dixon, a solicitor who runs his own practice specialising in construction law and commercial contracts, supports the campaign. “On any large job there will probably be a performance bond and perhaps a company guarantee as well. Why do you need a retention, apart from as a cash flow advantage of the person taking the retention?”

The NSCC suggests retention bonds as an alternative. These would be taken out by the subcontractor, and provide a guarantee for the main contractor that the amount that will have been held in retentions would be available as an insurance pay-out should things go awry.

But Dixon suggests a simpler solution: “Most standard forms of construction make reference to retentions, but you don’t need to change them — you can just make the retention figure zero.”

Neil Gower, chief executive of the Joint Contracts Tribunal, said: “Our desire is to deliver the contracts that the industry needs and wants, so if there’s sufficient demand for contracts to be changed we are happy to consider it.”

For more views from contractors and CBCs, see vox pop, page 11.

Maggie’s day

The latest Maggie’s Centre, which offers non-clinical facilities and support for cancer patients within the grounds of NHS hospitals, has been completed in Cheltenham by Surrey-based Chartered Building Company Day Building Contractors. Designed by MJP Architects, the £1.6m building features stone floors and natural oak column casings.

The scheme included the refurbishment of an existing listed Victorian lodge, previously used as an office.

Judy Lowe, CITB-ConstructionSkills

Q&A Judy Lowe

Judy Lowe is deputy chair of CITB-ConstructionSkills, which recently published the annual Construction Skills Network report. Forecasting the industry’s recruitment and employment needs over the next five years, it points to further job losses in 2011 followed by slow growth in 2012-15.

Remind us of what’s happened to construction employment

We’re calculating that 286,000 jobs will have been lost in the recession. The peak was 2.72 million employees in 2008, which will drop to 2.44 million in 2011. But from 2012 we’re assuming an annual recruitment requirement of about 43,000 extra jobs a year. That will still take us to about 2.63 million in 2015.

The report predicts we will need more uptake in recruitment (7.8%) than we can expect in output (5.2%). Does that mean we’re set to become even less efficient?

It’s because repair and maintenance is where the bulk of the growth will be, and R&M is about twice as labour intensive as new work — more employment is created per amount spent in real terms.

Are we ready to make the shift towards multi-skilled tradespeople?

It’s going to be needed in the low carbon environment. I’m already seeing evidence of a step change in the industry — at one time you had roofers and then you had workers who understood solar panels, and the two would never speak to one another. Now I’m seeing individual companies who can advise on planning permission, design, build, installation and maintenance.

How is ConstructionSkills responding to the likely hike in tuition fees to £27,000?

Construction comes under STEM (Science technology, engineering, maths) so it is at least one of the areas the government is continuing to support. If you feel anxious about that level of expenditure you might want to consider a different route.

You mean management traineeships for 18-year-olds?

I wouldn’t encourage anyone at 18 to join a management training scheme. I’d rather encourage people to go and put their toe in the water to see what they think of the work — get youngsters onto site, at the Olympics, for example.

Students given chance to avoid £27,000 debt

School leavers worried about potential tuition fee debts of £27,000 if they embark on a construction-related degree could benefit from a new training route available from September 2011 — Higher Level Apprenticeships.

Traditional apprenticeships, taking 18 months to two years to complete, offer a Level 3 qualification — equivalent to A-levels. But the new Higher Apprenticeships, which have statutory status from April 2011, will give individuals a Level 4 qualification, equivalent to a degree.

HLAs’ combination of workplace accreditation and study would allow young people to reach degree level through NVQs, HNDs, and two-year foundation degrees while they are earning — rather than building up student debts.

Funding is available for 70,000 HLAs across the economy. The roll-out for construction is being led by sector skills council ConstructionSkills.

Nick Gooderson, head of standards and qualifications, said: “The whole government agenda is to try to raise the profile of apprenticeships. The message is that the academic and vocational routes are different, but of equal value and credibility.”

ConstructionSkills has established a working group to look at the delivery of HLAs, comprising universities, employers and professional bodies such as the CIOB.

However, Gooderson says employers have so far shown a mixed response. “Some are keen, but some think that apprenticeships will never really work at the higher levels. Others view it very positively, as raising the profile of people coming through the vocational route.”

And he acknowledges that the 80 two-year foundation degrees currently on offer do not have universal acceptance among construction employers.

“SMEs tend to favour the HNC and BTEC qualifications they’re more familiar with, but major companies get very interested in foundation degrees,” says Gooderson.

Although the new qualifications will be eligible for public funding, Gooderson says it’s unclear how this will be delivered. Both the Skills Funding Agency (SFA), successor to the Learning and Skills Council, and the Higher Education Funding Council for England are likely to be involved.

Month in numbers

4 The number of construction fatalities on a site in Great Yarmouth, one of the worst accidents in a decade. The men were working in the building’s foundations when steelwork above them collapsed.

15 The possible percentage squeeze on secondary school space standards, under government plans to reduce construction costs. 

95 The increase, in pounds, in the price of a tonne of Tata steel delivered from March. The increase follows a £50 rise last December.

30,000 The number of new construction workers and professionals Canada needs to attract by 2016 to meet an anticipated increase in construction activity.

76,000 The number of construction workers predicted to lose their jobs in 2011, according to the annual Construction Skills Network report (see Q&A, left).

1.7bn In pounds, the estimated cost of the new replacement Forth Road bridge. The two consortia in the running for the project have just submitted their bids.

Scholar: Brendon Keilthy

Scholar: Claire Woodhouse

History lessons needed on site

Heritage projects suffer because site managers and workers often have a poor appreciation of the building’s heritage features, concludes research from 2010 Sir Ian Dixon scholar Claire Woodhouse.

Woodhouse, who graduated with a BSc in Archaeology and now works as a site manager for Killby & Gayford, studied two London projects: the refurbishment of grade II-listed Stoke Newington Assembly; and a £3.5m mezzanine project for the Wilkins Library at University College London.

Her survey of project personnel revealed that more than 80% of site managers said that receiving more information explaining the heritage features would have improved the quality of work, while 73% said they thought everyone on projects should receive heritage information.

Fellow Sir Ian Dixon scholar Brendan Keilthy, a site engineer at Vinci, presented a paper entitled Design Management Graduates: Fit For Purpose? looking at how undergraduate training could better equip students for design management roles.

He suggested a greater focus on improving technical skills, and workshops that simulate the role’s day-to-day responsibilities.


Nominate your ‘hidden’ construction stars

The CIOB is working with journalists at The Daily Telegraph and The Sunday Telegraph to identify construction-related businesses that will help create jobs and lead the economy into recovery.

The newspapers are compiling a special publication profiling 1,000 companies whose strength and business models are expected to contribute to the country’s future prosperity. The companies and their rankings will be endorsed by the country’s leading professional bodies, including the CIOB.

Members are invited to identify construction’s  “hidden stars”, in all parts of the country. The focus is on businesses in the £5m to £500m turnover range, although exceptions will be made for companies that show particular promise.

If you are interested in helping you should:

• Nominate one long-established supplier/peer that has impressed you in the past 12 months in terms of service, innovation or impact on your business/sector.

• Briefly explain the reasons why.

• Nominate one rising star UK-based supplier/peer that has impressed you in the past 12 months in terms of service, innovation or impact on your business/sector.

• Briefly explain the reasons why.

Email your answers to: [email protected].

Answers will remain confidential, but you should indicate if you are prepared for a journalist to contact you, and provide a contact number. You can indicate that you wish to remain anonymous if you wish.

Nominations should be submitted by the end of February.

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Tweet your thoughts to the world on International Construction Day

Are you itching to tell the world what a great project you’re working on, or frustrated about the public’s perception of our industry? If so, you could make yourself heard via Twitter on International Construction Management Day on Monday, March 14th.

We’re Building Something Big is a CIOB Twitter campaign to create the biggest possible buzz about construction on a single day. Anyone working in the built environment can tweet their followers about what they’re doing, their project or general thoughts about the industry.

“We want to get a global snapshot of the breadth of activity across the built environment, showcasing what a hugely influential, widespread, varied and vital industry construction is,” said Paula Annels, head of policy at the CIOB. “Are you working on a fantastic, innovative project? Have you seen a class of construction students through their exams? What’s happening on your site? We want to know.”

In the run up to the event, the CIOB will promote the campaign through its website, magazines and publications, as well as LinkedIn and Facebook. It’s aiming to involve the UK regional and international branch networks, government ministers, industry leaders and chief executives.

Tweets should be posted to the Twitter address @CIOB and marked  #we’rebuildingsomethingbig. Guidance on using Twitter-will also be available on the CIOB website.


Database contains 120 sources of funding for construction research

A new online database of funding sources for construction research has been launched by the CIOB in conjunction with contractor Costain, the University of Salford and Loughborough University.

The database, conceived by the CIOB’s Innovation & Research panel, contains 120 funding organisations that could provide resources for research and development for contractors, suppliers, academic researchers and cross-discipline teams.

The I&R panel brings together construction practitioners and academics to promote and support research into the science and practice of construction.

Through the new funding matrix, it hopes to dispel the common perceptions that funding isn’t available for construction R&D, that applications must include an academic partner, or that the application process is long and burdensome.  

In addition, the database will be able to help potential applicants find supply chain partners to develop an innovation. Service users that have located a funding possibility can also use the database to invite collaboration and interest from other parties.

Dr Peter Ball, director of strategic research at the BRE and member of the CIOB Innovation and Research panel, said: “The purpose of the database is to promote innovation as a way to grow businesses.

“There are a lot of funding opportunities available both in the UK and Europe, but businesses are not aware of them.

“You can search the database based on the type of your organisation you are, such as a start-up, SME or an academic department; the type of research you are looking for, such as a desktop study, blue sky, basic or applied research; and the type of organisation that should lead the project.”

The CIOB estimates that the UK construction sector can access more than £500m worth of funding across Europe annually, but much of it goes unclaimed. Recent statistics from the government’s Technology Strategy Board  (TSB) show that a recent funding call attracted more than 200 individuals to register and download information but only 20% submitted an application.

The TSB and the EU’s Framework Programme 7 are the best known opportunities, but other regional, national and pan-European funds are available.



How do we access this data base?

John Cook, 1 March 2011

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