Opinion

Editorial: New year, brave new world for start-ups

9 January 2012

Denise Chevin, Acting Editor, CM

New Year has always been a time for starting afresh and without doubt the ultimate new beginning is starting your own company. As we continue in the worst recession on record, one might wonder if Ian Eggers, Julian Daniel and Paul Chapman, three of those we feature on pages 12-17, are completely mad to have left well-paid jobs to go it alone.

They are certainly taking a massive gamble, that’s for sure. Yes, there is the odd chink of light trying to break through the economic gloom, notably the RIBA’s Future Trends survey for November, which showed that architects’ workloads are starting to become more stable and recruitment is rallying at larger firms. Architects are in at the start of the construction process and so any sign of life here is a welcome indicator for construction companies down the line.

But, by and large, the tarot cards still don’t look great for 2012. A report by CITB-ConstructionSkills, published in December, revealed that one in 10 fear their business won’t survive the continuing recession (see page 6).

So that’s the bad news. But as those interviewed in the piece point out, they have a great deal going in their favour. Both Eggers and Daniel have impeccable pedigrees and contact books in the London commercial market — where there are signs of life. Start-ups can offer a personalised service, overheads are lower and clients are more likely to be receptive to this in a tougher market.(Don’t be surprised to see a few more new names emerging in the wake of the buyout of Davis Langdon by Aecom.)

Plus the government genuinely wants to improve the trading conditions of SMEs, which it sees as drivers of job creation. The £20bn credit easing scheme announced by George Osborne in the autumn, under which the government will underwrite loans to SMEs, is a welcome fillip to smaller firms. There is a will there too, by all accounts, to bring construction SMEs back into the Whitehall procurement process. There’s just not a way yet.

SMEs in construction might also feel the government’s actions don’t always live up to its talk on offering them support in other ways too. How can they feel altogether confident when the government pulls a stunt like suddenly halving the rate of feed in tariffs for electricity generated from solar panels?

The government introduced the changes with a mere few days’ notice. The plans are already subject to a legal challenge by environmental groups and solar panel fitters which had yet to be heard when this issue went to press before Christmas.

The episode also serves as a stark reminder for those thinking of starting up on their own of the need to examine the foundations on which they propose to build their new businesses. Any business model that relies on the whims of a single public policy will, sadly, always be risky.

CM writers feature in awards

The year ended on a high for Construction Manager after contributing editor Stephen Cousins was named IBP Construction Journalist of the Year at the prestigious International Building Press Awards in November for three articles he wrote for Construction Manager, and acting deputy editor Jan-Carlos Kucharek was also nominated in the same category. Cousins also received a special award by environmentalist Jonathon Porritt for his outstanding writing on green issues.

Contact us

Do you have an opinion on any of this month’s articles? Email: construction-manager@atompublishing.co.uk

Vox pop

CM caught up with members of the London branch of Novus, the CIOB’s networking group for young professionals, to get their views on the industry and what’s in store for the new year

Incoming President Alan Crane has vowed to “put the fun back into the CIOB”. How do you think he's going to do it?

Helen He’ll need to reach out more to students and the younger membership. It’s no longer about old-school ways of thinking. Novus came about because younger members have specific needs and wanted opportunities to network with contemporaries — we’re already looking at an international chapter in Australia.

Tommy If he’s going to make it sexy, he needs to tailor-make the institute to fit modern needs. Alan Crane needs to seriously start researching how to modernise it, to go out to the membership and listen to what they want from it rather than just assuming.

Jordan I don’t think it’s about making it sexy, it’s about being made to feel welcome. I don’t feel that the CIOB as an organisation has been that welcoming to new members, or indeed put itself out there in the first place. I didn’t consider CIOB membership until quite far into my career.

How do you gauge the mood of the industry at the moment?

Tommy From a personal point of view, I would say it’s getting better. Until recently I was working in the Republic of Ireland, and it certainly couldn’t have got any worse there.

Helen Where I am at ISG, we’re confident about the future. We’ve secured LOCOG work which should see us through well into next year. In terms of the wider industry I feel more cynical, problems
with the Eurozone could well mean work plateauing again.

Jordan It really depends on what happens in the Eurozone, as we’re all
in hot water with that. Until now, I’ve stayed optimistic though. I do feel that the industry has bottomed out, and I wouldn’t have started up on my own recently if I didn’t have confidence in
the market picking up.

What aspects of the construction industry do you find particularly frustrating?

Jordan I feel that the last firm I worked with really didn’t support my career progression, a hangover from the way it’s always been in construction. That’s what can give the CIOB more credibility, it’s an opportunity to network with your peers and exchange experiences. That environment encourages you to be proactive — being salaried within an organisation can sometimes just make you complacent.

Helen With the economy in the state it is, it’s going to be hard for anyone new to break into the industry, and for those working in it, it’s harder to get onto additional training courses. Both of these are affected by the uphill struggle with the economy.

Chulu For me it’s the pace of change of the industry, or rather the slowness of it. Maybe it’s because it’s an enormous industry, and it just takes ages to disseminate through the ranks. Whatever the reason, implementation of change is always a slow process.

Do you think the industry is doing enough to encourage women to enter the profession?

Helen I really don’t like answering questions on that subject as I think it actually encourages the idea that there is a problem. I don’t think the industry discriminates in terms of nationality or colour. I entered the industry on its own merits, and think that’s how women should approach it. That said, maternity leave is an issue here, but it is with any profession.

Chulu I’m less concerned with prejudice against women in construction than the perception generally that construction is some kind of second-class profession. I think if you change that perception, you’ll get more of everyone entering it.

Tommy I think women should be encouraged into the industry, but I’m really not keen on seeing quotas as a way of getting them into it.

Do you think government construction policy is good or bad for the industry?

Chulu Construction is a key economic driver for the country and the government should be at the forefront of encouraging that with policies that stimulate the sector. I think that the next big policy driver has to be sustainability — we’ve got to meet our future carbon commitments. We’re at Code 4 now — I think we’ll get there.

Jordan There’s conflicting government policy out there, it’s not joined-up. I’d say that at the moment long-term strategic policy decisions are taking a back seat to short-term economic ones. The way forward is to push a full green economy and stimulate research and development in sustainable industries.

Tommy It’s going to be tough to turn the city green and meeting more demanding policy is going to be a real challenge for the industry.

Where does construction need to develop to move forward?

Tommy It needs to be less fragmented and adversarial. Current contracts seem to highlight differences rather than merging teams into a coherent whole. There are framework agreements and partnering contracts, the fundamental way that consultants work with each other needs to change and I think that’s by addressing contracts.

Jordan Technological developments have been amazing — before people would be excavating foundations by being knee deep in mud, now we’re even digging by remote control! At the same time, I’d like
to see more emphasis on real professions like stonemasonry to see that these skills don’t die out.

Chulu Health and Safety issues are only getting more and more onerous, and we’ve reached zero tolerance on fatalities on site. There needs to be more reporting of “near misses” so that we can really bring it down to zero.

 

If you are interested in joining Novus go to www.ciob.org.uk and click on “membership”, or call Danielle Baker on 01344 630706. The first event of the year will be a site visit to St Pancras Station on January 19.

Feedback

CIOB and the Green Deal, and the government's cut to FITs

CIOB needs to work harder on Green Deal consultation

Having read the consultation document, The Green Deal and Energy Company Obligation it is my assertion that the CIOB should be a major influence on
the Green Deal – the upgrade and refurbishment 26m houses and commercial buildings in the UK.

What evidence can the chief executive, president and trustees of the CIOB proffer in terms of applying real strategic insight and practice over the last 12 months in preparing the Institute for the consultation phase of the Green Deal? That is, proactive strategic insight in “positioning” its influence and thereby placing its members in pole position in terms of career/work/commissions opportunities.

David Stockdale FCIOB

Online response to story on cuts to feed-in tariffs for PVs

Why should the taxpayer subsidise solar panels or other “green” projects? I was reading yesterday that the government (taxpayer) intends to invest £40bn over the next 10 years. We cannot afford this. Apparently our contribution toward “global warming” is only 2% of the world’s emissions, of which 80% is caused by air travel and power stations. There also is the distinct possibility that there is no global warming.

Eddie Monk

It is not so much the reduction in FITs that will kill the solar PV industry — it is the proposed requirement that in order to install solar PVs all homes should have an energy rating of C or above. Approximately 90% of all homes in the UK (homes built before 2002) will be unable to meet the C rating unless they have solid wall insulation installed (in addition to cavity wall insulation, double glazing, loft insulation and a condensing boiler) This is totally unrealistic and will kill the solar PV industry.

Robin Atherton

Comments

It seems that readers are a little behind the curve on the Solar Feed-In Traiffs and have taken at face value government pronouncements. Although government want people to believe that the Solar FiT is paid by them and is government largesse, it is not. The FiT has no impact upon government finances, deficit reduction, or the spending review. The Fit is paid by the Big6 energy companies from a levy they collect from their customers. This does have an impact on energy bills but is a very small amount, not the sums (changed almost daily) announced by DECC. It must also be remembered that the Big6 buy electricity from microgenerators at 3.1p which they then sell to customers at 14p plus. Do not be fooloed into thinking that the FiTs are paid from taxation, they are not.

Mike Rios-Hall, 6 January 2012

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