30th October Journal Column

Identity ConsultBy Andrew Milnes BSc MRICS, Associate Director, Identity Consult

You may have heard of pop-up restaurants or pop-up shops which are opened temporarily to take advantage of demand for a trend or product … well now they’ve introduced the pop-up village!

The UKs first pop-up village, designed by architect Roger Stirk Harbour + Partners on behalf of Lewisham Council, aims to be a solution to the homes shortage problem. The development will provide temporary homes for families and space for community and business use.

In the past year, Lewisham Council has seen an increase in the number of families placed in temporary accommodation to nearly 600, costing them nearly £3million, and so the village will be used to help meet the high demand for emergency housing for homeless people. However it will also contain a range of commercial and community uses to re-animate a brownfield site while long term regeneration plans are developed and thereby also solve a common problem that occurs with the majority of development sites, which sit unused while plans come together.

Once the site is developed, the blocks can be dismantled and moved, meaning the village can be reused over and over again. Even if we were given just one pop-up village per city, I’m sure we’d see huge improvements in housing figures.

Lewisham Council has appointed SIG Building Systems as its Principal Contractor, who in turn are working alongside North East leading Development Consultancy, Identity Consult. The project will immediately take 24 families out of B&Bs and assuming that every family has an average stay of one year, during the four years before they find permanent accommodation, then that will be almost 100 families that have benefited from the development. Pretty amazing if you ask me, so amazing that I must ask, when will it be coming to the North East?

The villages would be a huge help in the North East, they could be used to help get young people on the property ladder or be used to re-house those who need it, whilst they look for a more permanent solution.

The UK as a whole has previously struggled to build enough homes to meet the growing demand, frustrating potential home owners. But these reforms look set to solve an age-old problem that local authorities have failed to plan ahead for meaningful developments; although we still have the issue of delivery. The skills shortage in the industry means that builders are turning down projects and this problem will only get worse with an increased development demand. The pressure should ease knowing there could be a solution making its way to the North East to house families, whilst builders and the council attempt to meet the ever growing demand for new homes. Let’s hope a village ‘pops-up’ around the North East in the near future!

29th October 2015 Newsletter

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23rd October Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

I’ve spoken about my support for the development of Building Information Modelling (BIM) technology before. And the Government seemed to agree with me when they announced the BIM Mandate, which states that all firms tendering for Government projects must be using Level 2 BIM technology by 2016.

The announcement meant that all firms had to start thinking about using the technology, especially if they wanted to be able to tender for Government projects. But with 2016 only two months away, I would expect all firms to have progressed a lot further than just thinking about BIM  … but it seems my expectations are a far cry from reality.

According to a survey by the Electrical Contractors Association, the industry is way behind in the Government’s timetable. Only 16 per cent of firms in the building sector are BIM ready, over half (57 per cent) aren’t fully ready and 27 per cent aren’t ready at all, despite the deadline being just months away.

The results show that awareness of BIM is high across building services, and although they are aware of BIM and the looming deadline, most firms still have a long way to go in order to meet it.

The results indicate that while some companies have already engaged with BIM, many more have yet to consider it. Although the advantages of BIM have been highlighted, more so this week, due to Digital Construction Week, there are still some SMEs that think BIM isn’t as relevant to them as it is for larger organisations, but they could not be more wrong.

BIM isn’t just about the software. The processes and systems used have just as much importance, if not more. Some of the SMEs I’ve spoken to in the past said this is what puts them off. However, it really shouldn’t be the deciding factor in whether this technology is used or not, and you don’t really have a choice anymore if you want to tender for Government projects. All businesses need to do is ensure they have the process infrastructure in place that can help them deliver BIM and the technical capability to administer the correct information.

Don’t worry, it isn’t as complicated as it seems. BIM doesn’t require drastic change in the way things are currently done. Firms should take a problem-solving approach and pick just one area of their workflow they want to improve and then use BIM as part of the solution.

There are some great examples of organisations using BIM well and in the North East, there are numerous SMEs using the technology to their full advantage. So there’s plenty of evidence to show those organisations slightly wary of the next step that it’s definitely worth it.

22nd October 2015 Newsletter

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16th October Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

The industry has welcomed the new National Infrastructure Commission (NIC) with open arms.

The newly formed body, which was announced by Chancellor George Osborne, will be charged with offering an unbiased analysis of the UK’s infrastructure needs. They got to work immediately when news of the NIC was announced on 5 October and are led by Lord Andrew Adonis.

I have faith that an unbiased panel will be able to make decisions based on the UK’s needs as a whole, rather than doing it as a Conservative or Labour Party, which often makes it difficult to agree on such things. Taking the politics out of major infrastructure decisions will ensure the best decisions are made for everyone. Having a cross-party consensus and an independent chair will help us make major decisions as a nation, something that’s long been needed.

It will assess the UK’s infrastructure needs every five years, as well as looking ahead 30 years to assess future infrastructure requirements across all key sectors including, rail, roads, energy, water supply and waste. We need big improvements in both transport and energy systems to help the infrastructure sector boom.

With new opinions and a fresh perspective to assess infrastructure requirements to shake up the sector, it will hopefully get us out of the rut we have been stuck in, which in the past has failed to produce the roads, railways, airports, power stations and homes that we need.

Don Ward, chief executive of Constructing Excellence is extremely supportive of the new body, but thinks that its first priority should be housing.

As he said: “You can’t divorce housing from city and regional developments, if it’s about developing the economy for the 21st century, it has to look at the workforce too.”

It’s difficult to change and modernise the housing market, but we need to decide strategically where we’re going to put it. If we put it with the NIC at least we know there will be an independent commission looking at the problem, which is perhaps what is needed, as the government have failed to meet its needs in the past.

The NIC will be made up of around 25-30 permanent staff and I’m hoping they will make the bold decisions that the sector has been crying out for. I urge them to take the risks that people have always been too wary of. The building of the M25 and the Channel Tunnel were both highly protested at the time, just imagine where the country would be now if that hadn’t gone ahead?

15th October 2015 Newsletter

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9th October Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

It seems our prayers have finally been answered; the effort is being made to address the skills gap and to get young people into the industry.

Wherever you look, there are campaigns to encourage people to consider a career in construction and to increase the skills of those that are – which is what I’ve been wanting to see for so long.

We’re currently supporting The Armed Forces Employability Pathway programme (AFEP) which links Army Reserves, Local Authority, Job Centre Plus and local employers to assist participants into work.

The six week programme consists of team building, problem solving exercises and help writing CVs. It ends with a placement within the industry, and a review to discuss strengths and weaknesses.

The Journal have just launched their ‘Let’s Work Together Campaign’ and the CITB have recently launched their Go Construct campaign, both encouraging companies to address the skills gap in the region. They are working towards filling the 220,000 jobs that are needed in the next few years.  The campaigns were launched following research that showed that four in five respondents wish they had been given more advice on a career in construction when considering career options.

The problem seems to lie with education, not just in skills and training like you would expect, but more in simply educating people on what the industry can offer them.

The private sector, education and the Government must unite and work together in order to solve the skills gap crisis and allow the industry to grow.

The Government have offered their support by announcing that the apprentice and national minimum wage will increase from this month. The apprentice wage has increased by 57p per hour, which is the largest increase in history, making apprenticeships more attractive to young people.

But we need help and support to spread the word about our industry, why we love it and what it can offer. That’s why I think UK Construction Week is such a good idea.

UK Construction Week, the biggest trade event for professionals, launched this week and will run from 6-11 October. The event will include shows specific to UK construction, and allow professionals to come together and address issues, develop skills, seek out and recognise talent.

Having such a big event to celebrate the industry helps to spread the word on what the industry has to offer, which is exactly what we need.

I for one, love working in construction and am proud of what we have to offer. So let’s spread the word and educate industry novices, shout it from the roof tops if we have to, (roof tops that were built by workers from our industry, just in case you didn’t know!).

11th September Journal Column

By Paul Wilkinson, Director, pwcom.co.uk

To many in the construction industry, late payment is a necessary evil. We almost take it for granted that some companies – often main contractors – will insist on long payment periods, but this credit can be abused as they find reasons to delay settlement of invoices until it suits them. This all adds to the cost of delivering construction projects, undermining the efforts of the UK government and other clients to achieve greater value from their supply chains.

Textura recently conducted a survey looking at the impacts of late payment. Opinions, which formed the survey results, showed that contractors often use the same excuses for not paying on time or not paying at all, such as; the director is on holiday or they haven’t received an invoice.  It is also thought that main contractors are leaning on their supply chain as a banking facility to command growth and bigger companies use late payments as a way of free financing from small businesses. As a result, many subcontractors have responded by inflating their tender prices to cover the costs they incur when their customers pay late. The survey was completed by over 100 respondents and, found that on average, 4 per cent is added to costs to cover late payment. The subcontractors surveyed did say that they would discount prices by an average of 2.35 per cent if contractors paid promptly – within 30 days. I fully believe that ‘digitising’ construction payment would be beneficial. As the industry is digitising, optimising and integrating collaborative design and construction processes (through BIM and other techniques), why isn’t it simultaneously digitising procurement and payment? It doesn’t quite make sense that we can manage complex 21st century logistical challenges, such as offsite fabrications, but many suppliers are still victim to out-dated construction payment practices.

While the UK has raced ahead with its BIM adoption drive, a quiet revolution has been occurring in the US relating to payment management. By streamlining and automating large parts of their payment processes, companies have managed to double revenue without recruiting more staff, save the annual equivalent of two members of staff and save project managers and the accounting team 210 man-hours each month.

While late payment is one of the most significant issues facing UK subcontractors, the US have shown that it can be tackled. Significant benefits might be achieved by forward-looking UK construction businesses that in turn could help add value to their construction industry clients, helping achieve the targets set out in the “Construction 2025” report.

18th September Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

The Construction Leadership Council (CLC) was created in 2013 to work between industry and government to identify and deliver actions supporting UK construction in building greater efficiency, skills and growth.

The Conservative government slimmed down the CLC in July, more than halving members from 30 to 12. The plan was to replace those with personal interests in the industry for genuine leaders, which turned out to be bosses of foreign-owned contractors.

Needless to say this hasn’t gone down well with the majority of the industry who all felt uninvolved, and rightly so.

However, the government may have redeemed themselves by restructuring the council once again, suddenly finding space around the table for industry professionals and suppliers.

They have announced six ‘work streams’, which will involve an industry expert taking charge of different sectors within the industry. Laing O’Rourke chief executive, Anna Stewart, will be in charge of ‘people and skills’, whilst Skanska chief executive, Mike Putnam, will deliver work on all things green and sustainable. Crossrail chairman Andrew Wolstenholme will focus on ‘smart and innovation’ which is likely to include Building Information Modelling, and BDP’s David Cash will concentrate on ‘exports and trade’. Strategic Forum for Construction representative, Simon Rawlinson, will be in charge of ‘industry communication’ and Bouygues’ chief executive, Madani Sow, has been given the task of improving ‘supply chain and business models’.

From contractors to suppliers, architects consultants and house builders, the council now includes a representative for everyone. Involving some of the industry’s leading figures will provide more, much needed, business-focused changes.

The ‘leaders’ of the work streams have been tasked with getting the whole industry involved in decision-making and changes, which won’t be an easy job, but it’s significant in ensuring the industry goes from strength to strength. It’s not all as doom and gloom as we thought earlier in the year when CLC members were cut, this is a huge opportunity for more people to be involved, not less.

The update came at this week’s Construction Industry Summit, which is organised by the Construction Industry Council to mark progress on the industry’s journey to the goals set out in the 2012 industrial strategy, Construction 2025.

There was a noticeable absence of government ministers, which was a shame; it would have been nice to see some government support there. The newly formed council may have the potential to impact the industry but without the government behind them many of their decisions or changes will be limited.

The newly-formed CLC will meet for the first time next month and I’m excited to see what they bring to the table.

25th September Journal Column

Web-LogoBy Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

The Department for Business, Innovation and Skills (BIS) published the latest Key Performance Indicators (KPI) last week and the results are not what we wanted to see.

The figures, which were compiled by BIS, the Construction Industry Training Board (CITB), Glenigan and Constructing Excellence, show that three out of five construction projects are delivered late. The industry’s ability to deliver work on time fell to 40 per cent this year, from 45 per cent in 2014.

The highest level of projects delivered on time recorded in the history of the survey was 58 per cent back in 2007, which sounds impressive compared to where are now; but it’s not really something to celebrate, it means that as an industry we only managed to deliver just over half of projects on time.

Another major concern for the industry came in the customer satisfaction scores, with customers rating their finished products an 8 out of 10 or higher on only 81 per cent of surveyed projects. It’s not much of a change from last year, just one per cent lower, but it now means that satisfaction scores have fallen for three years in a row.

This brings us back to the on-going issue of skills shortages and training. The industry must increase training provisions to address productivity levels. An increase in productivity is always a good thing, but we’re never going to get there if contractors can’t deliver work to both a high standard and on time.

And it wasn’t just customer satisfaction that fell. Contractors also rated satisfaction with the performance from the client, and figures show that only 69 per cent of client performance was rated 8 out of 10 or higher, showing that work needs to be done from both ends in order for us to see an improvement.

However, there is light at the end of the tunnel in terms of cost predictability. Last year, projects coming in on budget or better hit an all-time high with 69 per cent, and the industry has managed to hold on to the same score this year. It would have been nice to see a little increase, but looking at the rest of the figures, it’s the least of our worries.

In terms of meeting the government’s Construction 2025 performance target, the results show that the industry is making very limited progress.

Sticking to agreed project timings is still a big problem for a lot of contractors, but they have managed to complete many projects within budget. This is a far cry away from the 50 per cent reduction in the time it takes to get a project from concept to completion and reduction in costs by a third that we are aiming for. 2025 might seem a lifetime away, but with some figures only changing by a marginal one per cent each year, more effort needs to be made to ensure we reach the targets the government are expecting from us.