Editorial: June 2011
Denise Chevin, acting editor, CM
Change is upon us — how ready are you?
The industry is being bombarded with contradictions and mixed messages right now. No sooner does an economic survey pop in the inbox suggesting grounds for optimism, when it’s immediately doused by one of the opposite persuasion. At the heart of government, the inherent tension between a coalition committed to localism whilst making sweeping changes from the centre is also taking its toll, creating more uncertainty and hardship.
For better or worse, though, the policy fog could be lifted to a certain degree in the coming weeks on a number of fronts and, added to trends that are taking hold, a solid picture of the emerging zeitgeist is starting to emerge. So let’s recap what the challenges are in this unprecedented period of change — changes that the industry has no choice but to respond to.
Sweeping reforms to public sector procurement were imminent as we went to press which could open up the work to smaller firms and ensure frameworks remain competitive. We know for certain that money’s only going to get tighter
and in a bid to slash costs it’s almost a dead cert too that the use of Building Information Modelling will become mandatory on all but the smallest publicly funded projects. Are you ready for that?
The government’s response to the James Review on school building hasn’t yet materialised. What we know is that building will go to the firms that can make the maths stack up. The industry is already responding with a wave of new modular schemes (see page 16).
The details may still be sketchy, but by committing itself to meeting the ambitious 2050 carbon targets and putting a flesh on the bones of the Green Investment Bank, there’s a little less room for cynicism around the Green Deal. As Cat Hirst from the UK-GBC urges (page 14) it’s up to the industry to gear up with the skills it needs rather than waiting around for the policy i’s to be dotted.
Finally, it’s becoming apparent that a good CSR policy has moved from being a nice to have to a key plank in business strategy, as consumers start to enquire want else there is to a company than its ability to make money (see page 22).
We might have to wait a while to get a very clear sense of the market, macro-economically the jury’s still out on whether the pace of spending cuts will scupper recovery (our weather vane on the state of the market certainly shows more activity in the South-east — see Vox pop, page 11). But waiting for greater certainties to emerge? Just don’t.
Nothing for ages, and then four come along at once. Counting the new Belfast Lyric and Margate’s Turner Contemporary, and you could even make it six great new cultural projects opening this summer.
The architecture is show stopping, but it’s worth noting that all of the projects we cover on page 4 demanded the input and expertise of the contractors to realise the design intent, and in an industry rife with adversarial relations, all spoke about how rewarding this process was.
It’s great to see what can be achieved when everyone in the team pulls together. These buildings lift the spirit and provide a welcome touch of indulgence in these times of austerity.
Denise Chevin, acting editor
(c) Joe Mclaren
Official figures and surveys seem to give conflicting evidence of what’s going on in the market. Has construction turned a corner?
Paul Nash, Global head of hospitality and leisure, Cyril Sweett
Developers are starting to dip their toes back in the water again and we’re seeing movement on hotel sites that have been locked down, mainly due to more availability of debt finance. Tourism is on the increase and the pound is quite weak, which is stimulating demand.
Previously, high land values constrained development, but we’ve started to see site values drop and come back onto the market at a sensible price which makes development stack up. Regionally schemes aren’t moving forward due to high land prices and property values are just not there.
Bernard Keogh MCIOB, Managing director, Arque Construction
I’m based in Devon and it’s a more competitive market place than it was 12 months ago and workloads are not increasing. I don’t expect any strong signs of recovery over the next year and the impact of public sector spending cuts has still to hit, so if anything we’ve not hit the bottom yet. On the plus side, the number of enquiries we’re getting is roughly the same.
Margins are still tight, although tender prices have perhaps come down slightly. Raw materials costs have risen, but competition among builders merchants is keeping prices keen.
Andy King, Director, London Metropolitan Research
We keep tabs on all companies looking for office space in the UK and in the capital there has been a big upturn in the last few months with 5.5m ft2 of large schemes under way. I expect the number of starts on major office blocks and lower level refurbishment schemes to increase until 2014-2015.
Clients are also starting medium-sized refurbishments to complete over the next 12 months. The regions will lag behind London, by about 12 months with little starting at the moment.
Andrew Bredin, Director at Hays Construction & Property
From a recruitment perspective the industry is still incredibly cautious, but we’ve seen a slight increase in activity since the turn of the year. It’s too early to say whether the trend will continue. Most jobs are in London and the South-east and it’s been pretty flat in North, but nowhere is worse than it was a year ago. Civil engineering and surveying jobs are most in demand on rail and power infrastructure and some major new office blocks in London. The temporary employment market is also increasing, implying that employers are erring on the side of caution.
Simon Rawlinson, Head of strategic research & insight, EC Harris
Construction markets are very difficult to read at the moment, so uncertainties around the data are very unhelpful. Workload in many sectors will fall away in 2011. One of the challenges with the data is the discrepancy between leading indicators such as the construction PMI and new orders, which indicate some modest growth, and the hugely disappointing output figures published in March. If a misreading of the construction data results in poor decision-making by government or by clients, we’ll all be the poorer.
Apprenticeships, embodied carbon, sustainable housing, 3 Peaks Challenge
GTAs saving apprenticeships?
Martyn Price, chief executive, Consign
With CIOB research showing that 29% of respondents expect to recruit fewer apprentices (Construction Manager, April 2011) employers who have relied on this route to bring new, qualified individuals into their businesses will be looking for ways to address this issue.
As chief executive of training broker Consign I have experience of an effective way of managing apprenticeships through a Group Training Association (GTA). Funded by a variety of sources, a GTA is a non-profit organisation providing training and related services on behalf of a group of local employers.
Through a GTA we recently completed, Consign pointed almost 400 employers to information and guidance to help them to support apprenticeships and co-ordinated 34 apprenticeship placements.
For example, the GTA allowed us to develop an apprenticeship recruitment strategy for affordable housing contractor Hill Partnerships to employ apprentices who would, over time, be transferred to employment with their subcontractors. This will allow the company to ensure that a qualified workforce exists throughout its supply chain, improving the quality and cost effectiveness of its service.
Figuring out embodied carbon
Simon Cox, first vice president, ProLogis
I was glad to see that Construction Manager has opened a debate about approaches to embodied carbon with “What, no rammed earth?” (CM, May 2011). However, there are a few points I would like to clarify in relation to the SusCon building.
The building was designed for a public/private partnership led by Dartford Borough Council, ProLogis and North West Kent College and not the University of Kent mentioned in the article.
The piece further states that SusCon has achieved the “highest ever BREEAM ‘outstanding’ rating for an educational building at 88.85%”. However, the building has only been awarded this rating following a recent BREEAM Education 2008 design stage assessment, not a final assessment.
ProLogis acted as project manager for SusCon and successfully applied the embodied carbon methodology developed in relation to distribution centres to this building.
Embodied carbon reductions for SusCon were targeted through careful material selection. These reductions were then measured through a lifecycle assessment (LCA) carried out by Deloitte. The LCA, based on a 60-year design life, measures energy use for building construction, maintenance, operation and demolition. This showed that the embodied carbon emissions for SusCon were 30% less than those for a typical new build.
Unavoidable embodied and operational emissions were then mitigated by 110% through investment in avoided deforestation and a local community project. The avoided deforestation investment will help local communities within the Peruvian rainforest to secure tenure agreements for up to 70 acres of rainforest for at least 10 years in exchange for agreement not to enter into contracts with logging companies.
This investment will also be used to improve community facilities and provide training in forest management and stewardship.
Loft space should be integral
Tom Metcalfe MCIOB
Page 56 of May’s Construction Manager contains a synopsis of a book on loft conversion, which on the face of it appears to give a reasonable solution to the problem of acquiring extra space in the home.
But why loft conversion? Why is loft space not utilised during construction as an integral part of the house as it is in continental Europe, Scandinavia and North America? The problem appears to be deep-seated within the culture of British housebuilders, most of whom tend to use trussed rafters which prevent use of the roof space. Maybe the CIOB could help to bring about a sea change to ensure the roof space becomes just another part of the house.
Levy could improve old stock
Ian Baker, group managing director, Linden Homes
All new homes built in the UK are required to meet government standards in terms of energy efficiency and sustainability. These standards are set to be made even stricter over the next five years. However, we believe there are better ways of improving the sustainability of UK housing than imposing additional regulation.
In return for no further regulation changes, we would like to see the introduction of a sustainability levy on developers. This money would be deposited into a central fund to be used to retrofit the UK’s existing housing stock, primarily in partnership with registered social landlords.
These works would deliver significant energy savings, and reduce household energy bills for those most affected by fuel poverty; create additional jobs through the local tradespeople required to carry out the works; make a real investment into local communities; and reduce the burden of maintenance costs to housing associations and councils.
In turn, there would be a significant reduction in costs to the new build sector, which would make land development more viable and enable more new homes to be built.
Climbers raise £230,000
Claire Connelly, COINS
On 7 May, 40 teams from the construction industry gathered for the 9th annual COINS 3 Peaks Challenge.
In total the teams raised more than £230,000 that will help build schools and homes in sub-Saharan Africa. The COINS Foundation wishes to thank all our participating teams in 2011. More at www.coins3peakschallenge.com
Your reaction to the stories in last month’s CM
What, no rammed earth?
The article only seems to include a qualitative analysis of materials, no quantitative analysis backed up by calculations or measurement methodology. Rely on it at your peril.
Not sure I agree with the statement that QSs are “not amenable to assessing their environmental impact” attributed to John Connaughton. I am always trying to advise clients and their designers to make changes and be flexible in approach to prevent and mitigate waste. If it’s not going to work long-term, don’t build it.
Skills shortages still rife
I started my apprenticeship as a surveyor 51 years ago with day release plus night school. I worked in every department from estimating to surveying. By the time I reached the HNC I knew more than the lecturers who had not kept up with improvements in the building industry.
I was in my 40s when I returned to university to obtain my degree. I raised the issue with lecturers that some of the teachings were out of date and was advised that they were teaching what they were told to teach.
Prior to going to university I obtained an HNC in electrical engineering by attending both day school and night school. I don’t believe going to university made me a better manager or offered any additional technical information than I had already obtained through working in the industry for more than 25 years.
I have seen graduates who have just left university bossing around experienced tradesman and failing in their duties due to not knowing how to manage people and lack of both technical knowledge and experience.
My view is that while education is necessary in various technical/design/managerial roles, it does not mean you know everything and the learning doesn’t stop, it is only the beginning.
BIM to be compulsory on all government projects
I am working on a hotel project in China and used a team of BIM consultants to prepare a 3D model to control the M&E installation and also to ensure all headrooms were properly co-ordinated before work started. This step was particularly important as most of the mainland China contractors are weak in co-ordination and would like to go the easier way to run the services for cost and time saving, resulting in low headroom in the end.
I fully support the step to force the issue, it may be costly initially, but eventually, there will be money saved in the variation or better outcome.
Costain wins 3 Peaks Challenge
Well done to all who took part. I am driver support for a company that is putting out three teams (also in aid of charity) in July. I would be keen to speak to an organiser from one of the teams about routes etc. We have done a lot of research to establish the best routes, but still use up a lot of time on the road.
Top five stories in May
Rush to develop modular schools
Contractors are gearing up to deliver a new wave of modular school designs in response to recommendations made in the James Review of the school building programme.
Revenue clampdown on construction self-employment
Tax officials target false self-employment as part of a crackdown on recruitment agencies in the construction sector.
Costain wins 3 Peaks Challenge
A team from Costain climbed the three highest peaks in the UK in 20 hours and 1 minute to finish first in this year’s COINS 3 Peaks Challenge.
BIM to be compulsory on all government projects
Building Information Modelling will be made mandatory on virtually all government projects within five years, says government’s chief construction adviser, Paul Morrell.
What, no rammed earth?
A new college in Kent throws up some interesting questions in the embodied energy reduction debate.
Do you think construction companies should be forced to use a high proportion of local labour and services, and buy materials locally? Visit the homepage to cast your vote.
Do you think that people who have worked their way up through the trades make better project managers than graduates?