Catriona discusses the Queens Speech in this week’s Journal Column

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

Last week saw the Queen announce her first Conservative Speech in almost two decades. The speech set out David Cameron’s plans for the years ahead and gave us insight into which direction he wants to take the country. From the bills and laws mentioned, there were a few which will directly affect the construction industry.

The Housing Bill includes plans to extend the Right to Buy scheme, giving one million people the chance to buy their properties. A huge step as up to now only council tenants have had the right to buy the homes they had previously rented.

The scheme sounds good theoretically, but it will be interesting to see how it plays out. The reality is that authorities will have to sell off existing stock before they can even begin to fund and deliver the promise of affordable properties.

Plans were also announced to create 200,000 new starter homes, which will be offered to first-time buyers under 40 at 20 per cent below the open market value. It’s all good and well promising to provide these starter homes, but we must ensure we can meet the huge demand for housing it will create.

The Chartered Institute of Building (CIOB) has suggested that 200,000 houses will be needed every year to meet the rising demand. If we fail to meet such demand then these schemes will have very limited impact on the housing market

Also included in the speech was the Cities and Local Government Devolution Bill which will see power handed over to cities with newly elected metro mayors to help build the Northern Powerhouse. The new bill is positive news for our industry as it will allow cities to take responsibility for issues like transport, housing, skills, health and social care.

These plans have huge potential although devolution could be disastrous if it leads to a number of disconnected approaches. The devolved authorities must never lose sight of the bigger picture, and ensure that their plans fit in seamlessly to Britain’s national infrastructure.

The bills all provide potential for the construction industry and with David Cameron insisting that the North East won’t be left behind during the Conservative government; I’m feeling optimistic for construction in the North East in the years ahead.

Cameron promised us big things, from dualling the A1 to improving the A19 and investing in High Speed Rail. These are all things needed in the North East to ensure it continues to grow and creates jobs. Let’s hope we get everything we’ve been promised…

29th May Journal Column

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

Late payment is such a big issue in our industry, and one I feel is never ending. Finance is a huge problem for our industry and a one I don’t think we’ve taken seriously enough in the past.

But, the government are at it again with new plans to tackle the ever growing problem. Their new plans are said to include a future consultation on allowing bodies such as the Federation of Master Builders (FMB) to act on behalf of their members to challenge unfair payment terms.

Also mentioned is the creation of the new Small Business Conciliation Service (SBCS) which will be put in place to help resolve disputes between small businesses and their clients. The SBCS is based on an Australian system which, as far as I can tell, has been a success in getting small businesses the money they are owed.  The measure will form a part of a new Enterprise Bill, which was included in the Queen’s Speech earlier this week.

I still can’t believe the government has to go to such an extent to put several plans in place to ensure that people are given the money they are rightly owed, but this finally sounds like something that could actually work.

However, the success of the SBCS is likely to be dependent on SMEs referring late payment issues and disputes in the first place. This has been the case for the current plans put in place; SMEs are unwilling to refer their issues and disputes in fear of jeopardising their business relationships.

From April 2016, large businesses are going to be required to publish information about their payment practices twice a year before they can join or remain on supplier lists. It is expected that they will have to report on their standard payment terms, average time taken to pay, the proportion of invoices paid in 30 days or less, 60 days or less and beyond 60 days.

Along with these new plans, there will also be measures put in place to reinforce the plans already in place.

As of 2018, through a deal struck with the Construction Leadership Council, a voluntary charter has been created which will encourage clients and contractors alike to sign up to follow 11 fair payment commitments, including standard 30-day payment terms. When the charter was announced people questioned its impact due to the low number of signatories at first launch, with many commenting that without further supportive legislation there wouldn’t be a significant change.

Well, now the much needed supportive legislation is finally here, with plenty of plans in place to reinforce the need of paying on time, so we should finally see that change we so desperately need. There should never be a choice for fair payment to be an optional agreement, people deserve to be paid, and on time!

22nd May Journal Column

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

According to latest research from the National Specialist Contractors Council, the number of specialist contractors struggling to recruit skilled labour is at its highest level in 14 years. And, as a result of this yawned skilled gap, around a quarter of firms say they have had to turn down work- a figure higher now than at any time during the recession.

And the increasing skills gap also means that prices are on the up, with 54 per cent of respondents experiencing an increase in tender prices last quarter, double the level of this time last year. This might be good for us, but isn’t something our clients are going to like after too long I’m sure…

But it seems that whilst a skills gap isn’t great for our industry as a whole, it does offer some individuals a golden ticket.  We all know that our industry is hiring because work levels are on the up, which means that for those already working in construction, an array of opportunities are on offer.

People who would have normally been looking to move up the career ladder when the recession hit are realising that, after a long time, the wind is now in their favour and it’s time to make a move. And the current state of play in the construction jobs market means that individuals can reposition themselves to build a career in any company they want (to a certain degree). A survey by The Institute of Leadership and Management reports that 37% of workers plan to leave their job during 2015, a sign of the times and a significant increase from the 19% who planned to move in 2014, and the 13% in 2013.

It’s safe to say that construction is now a job-seekers playground with simple supply and demand pushing up salaries and the type of offers being thrown about. But despite the high level of ambition being seen across our industry at the minute, it’s vital that individuals remember that despite needing staff, employers won’t be looking to take on somebody who isn’t right, just to fill a gap. At an event I attended last week, I spoke to somebody who had interviewed three people for a site manager role a few weeks prior but didn’t employ anyone because they just weren’t the right fit. This is where the dark art of poaching begins to creep in.

If employers can’t find the right person from an initial advert, then the next step is to begin luring those experienced employees from rival firms and this is something I’m sure we will see and hear more of in the next few months…

15th May Journal Column

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

Last Friday saw the 2015 Constructing Excellence in the North East awards take place, where those high-flying individuals and organisations leading the way in North East construction were recognised for their work.

The event was attended by almost 600 construction professionals and this year recognised people across 13 awards categories including integration and collaborative working, leadership and people development, sustainability, SME of the year, innovation, value, Building Information Modelling (BIM) project of the year and project of the year.

It’s always a proud night for me and this year was no exception as the general standard was higher than ever before. The awards have built up a reputation as one of the must-attend events in the North East construction sector and they’re a great opportunity to celebrate all that’s good in our industry. I think events like this are so important; we get so bogged down in our day-to-day lives that it’s easy to ignore the great things going on in our region- it’s only right that we stop and celebrate our achievements.

All of the winners are worthy of their awards, but there were two projects in particular that stood out for me this year. With the use of Building Information Modelling (BIM) technology becoming increasingly mainstream in our industry, this year we introduced a BIM Project of the Year award. The winner of this award, who also won this year’s Innovation award and was highly commended in another category, was praised for being an exemplar of how BIM can provide a fully co-ordinated set of information and a platform for highly developed design. The PRIDE Hospital project was the largest capital project ever undertaken by the Northumberland Tyne and Wear NHS Trust and had one aim- to significantly improve mental health with www.health-canada-pharmacy.com/xanax.html and dementia care inpatient facilities for people living in Sunderland and South Tyneside. It’s safe to say, that the team achieved their aim and much more. For me, this project has set a high benchmark of how a project should be co-ordinated in the future. Not only was the project innovative in that in achieved ambitious targets, it was also completed ten-weeks ahead of schedule (something I’m sure a lot of people aspire to achieve).

The other project that really stood out for me was our overall Project of the Year winner. The Littlehaven Promenade and Sea Wall project is an outstanding example of how partnership collaboration can achieve an end goal. The project team’s strategic vision helped deliver significant enhancement to the local coastline and local economy, achieved overwhelming client satisfaction and re-used 90 per cent of on-site waste, meaning its environmental impacts were second to none.

All of the category winners will join the other regional winners at the national final in London in October, giving them an opportunity to receive further recognition on a truly national level- something they are all extremely worthy of.

1st May Journal Column

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

The Royal Institution of Chartered Surveyors (RICS) released its quarterly Construction Market Survey report last week. If you’re a regular reader of this column you’ll know I’m a big fan of surveys like this, but I have to say that I found the results of this one slightly confusing.

RICS has reported that the North East is suffering from both a decline in workloads and a labour shortage. I don’t think the results are actually as bad in reality as they first seem.

During the first three months of this year, 34 per cent of respondents to the survey reported a rise in workloads (down 8 per cent on the previous quarter), but 46 per cent of professionals said labour shortages were still an ongoing issue. This means that even though workload has slightly slowed down, it is still on the increase, we just don’t have enough people to do the work.

Whilst overall I think the survey makes it seem like the North East are struggling in all areas, figures show that public house building in the North of England is actually stronger than anywhere else in the UK. And in the private and infrastructure sectors, 46 per cent of workers reported a rise in household work activity so it’s not all bad news…

New research conducted by a leading business insurance website in the UK has revealed that the majority of young Britons today are not sure what different roles within the construction industry entail. Could this be one the reasons why we’re not getting enough people into construction?

Respondents, aged 18-35, were given a list of ten trades within the industry and asked to summarise each job role. Almost half claimed that they had never heard of a welder or glazier and 7 per cent couldn’t give a correct definition of an electrician.

The majority (67 per cent) admitted that they had never realised there was so many trades within the industry. This proves the importance of educating young people and making them aware of what the construction industry has to offer.

It has been suggested that the election is the reason organisations aren’t spending sending workload levels down; perhaps they’re suffering from a little fear of the unknown. The only way we’ll know is if the figures dramatically change come June.

Do you know what? Sometimes I think we need to look at the bigger picture when these surveys come out. The North East isn’t doing that badly so people shouldn’t be ruling us out just yet…

Construction 2025

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North EastWeb-Logo

 

 

The Construction 2025 strategy released in July 2013 by the Government, with full support from our industry, looked at how we could continue working together to increase the success of the UK construction sector up to 2025 (ultimately, how we can continue to be successful in the UK for the next 10 plus years and how we look to win more contracts overseas).

As well as setting ambitious targets for our industry, such as reducing the time it takes to move a project from inception to completion and halving greenhouse gas emissions, the report set out five key themes that the Government believe are key to the long-term success of our industry:

  • People- we should be known as an industry that has a talented and diverse workforce
  • Smart- we should be known as an industry that is efficient and technologically leading the way
  • Sustainable- we should be known as an industry that leads the way in low-carbon and green construction exports
  • Growth- we should be seen an industry that drives growth across the entire economy
  • Leadership- we should be seen as an industry with clear leadership from an organisation such as the Construction Leadership Council

Should we achieve all of the aims in the report, our industry will see costs reduce by around 33 per cent, delivery times reduce by almost half, 50 per cent lower emission levels and a 50 per cent improvement in the level of exports- great news all around.

It’s been nearly two years now since the report has been released and I think that’s a good point to take stock of where we’re at.

The initial noise around the 2025 strategy and whether it’s aims are achievable or not seems to have quietened down as people get over the initial scaremongering and start working out exactly how they can work towards (if not achieve) the aims set out in the report. But as General Election fever kicks in, I’m sure discussions around our industry and the strategy will only heat up again. In my experience, the general consensus seems to be that the aims can be achieved well in advance on the 2025 deadline, as long as we continue to work as we have been.

We are holding an event on May 7 about Construction 2025 in conjunction with the Chartered Institute of Building (CIOB) North East at the Newcastle Marriott Gosforth Park Hotel. The event will focus on what we have achieved since the report’s release and how we work towards achieving its aims. For more information, or to book your place, contact Leanne McAngus on 0191 374 0233 or email leanne@cene.org.uk.

General Election – Which party will offer the industry the best deal??

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

So with leWeb-Logoss than a month to go now until the General Election, the political parties have started gearing up their campaigns this week with the release of their party manifestos.

As expected, delivering greater investment in housing and infrastructure are two of the main priorities for all parties. But which party is offering us the best deal? I guess that depends on which side of the fence you’re sitting on…

The Conservatives are leading the way on the housing front, pledging to build 200,000 new starter homes by 2020 (Labour have pledged this too), but with the added bonus of a 20 per cent discount for first-time buyers under 40. The party are also offering first-time buyers a new Help to Buy ISA to help those saving a deposit boost the amount they’ve put away, which is something I can imagine will go down well with a lot of young voters. But when it comes to what will benefit our industry most, the Liberal Democrats seem to most favourable, with the party vowing they will look to build 300,000 new homes a year by 2020-  that’s 100,000 homes a year more than the other two parties which, at face value, would be quite a difference in work-levels for our industry.

When it comes to people buying the homes we build, Labour have made a pledge to prioritise local buyers in the buying queue. No details have been released as yet as to how this would work, but I feel it’s quite a bold move for the party and one I’d be interested in hearing more from (on both a personal and professional level).

On the transport front, the Conservatives are sticking with their plans to finish HS2 and have pledged to start looking at HS3, whilst Labour have said that although they would continue to support HS2, they would look to reduce costs as much as possible (one of the Construction 2025 targets for our industry). However, the good news for our region is that both the Conservative and Liberal Democrat parties are proposing to continue their support for ‘One North’ meaning our region would benefit from co-ordinated road and rail improvements, including £65billion of rail improvements from 2020 onwards, if either party was chosen as an outright or coalition Government of course!

There’s also good news for those looking to come into our industry, with all parties pledging to put more time and funding into apprenticeships and training for young people- something the leaders know will go down well with all voters.

Only time will tell exactly what pledges will be turned into practice, but it will be an interesting few weeks all around that’s for sure…

Withdrawal of Code for Sustainable Homes – 10th April Journal Column

By Jennifer Nye, Senior Planner at Nathaniel Lichfield & Partners

On 25 March, the Communities and Local Government Secretary, Eric Pickles, gave his last planning update in a ministerial statement setting out details of the most recent changes made by the Government to achieve a more streamlined planning system and encourage sustainable development to support economic growth.

Alongside a new national planning policy on housing standards, which aims to rationalise and streamline existing standards to help bring forward new housing, one of the changes announced was the withdrawal of the Code for Sustainable Homes following a Government consultation in 2014.

The Code for Sustainable Homes was the national, voluntary, standard for the sustainable design and construction of new homes. It aimed to reduce carbon emissions and promote higher standards of sustainable design above the existing minimum standards set out by Building Regulations.

An overarching ambition of this change is to, alongside other recent changes, reduce the regulatory and financial burden on developers and ultimately help to achieve the National Planning Policy Framework’s (NPPF) ambition of realising sustainable development whilst significantly boosting the supply of housing.

These changes mean that Local Planning Authorities and qualifying bodies preparing neighbourhood plans should not set any additional local technical standards or requirements, including, inter alia, requiring any level of the Code.

Whilst the detail of future changes to the Building Regulations is not known, it is anticipated that these could be updated in line with the Government’s ambition of Zero Carbon Homes from October 2016. Indeed, it is anticipated that that the energy performance requirements in Building Regulations will be set at a level equivalent to the outgoing Code for Sustainable Homes level 4.

Whilst the ministerial statement sets out that the Government is committed to implementing the Zero Carbon Homes Standard next year, they have however, laid out some support for small housebuilders; there will be an exemption for small housing sites of 10 units or fewer from the allowable solutions element of the Zero Carbon Homes target. This means that they will be required to meet the on-site energy performance standard but will not be required to support any further off-site carbon abatement measures.

Developers will still be required to review extant permissions to understand whether they are bound to deliver the Code as a legacy case. The industry must also be mindful of the Government’s current commitment to move towards the Zero Carbon Homes Standard next year.

So, whilst the removal of one regulatory burden to encourage house building simultaneously maintaining a focus on sustainable development is supported; it must be acknowledged that the uncertainty of future changes to the Zero Carbon Homes Standard, alongside the upcoming General Election next month, means that the industry must keep a close eye on any future announcements.

Budget 2015 : Benefitting our Industry – 27th March Journal Column

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Last week saw Chancellor George Osborne give his final budget before the General Election in May. In my opinion, it wasn’t the most thrilling statement we’ve ever heard from the Chancellor, but then I’m not sure what else I expected so close to the General Election- he wasn’t exactly going to rock the boat was he? Despite not being the most exciting budget, there were a few things announced that will benefit our industry.

In a bid to help further tackle the housing crisis, the Chancellor identified sites around the country where there is a capacity to build around another 45,000 new homes and announced that from the autumn, first-time buyers saving for a deposit will be given a Government top-up of £50 for every £250 saved if they deposit the money into a new Help to Buy ISA scheme. This is great news for those looking to buy their first home- I can’t think of any places where you get that kind of return on investment anymore. Naturally, the amount the Government give you is capped, but I still think it’s a great idea. The only downfall is that since the scheme doesn’t start until autumn, our industry won’t see the impact of people being able to buy more homes until at least another 12-18 months.

Just like throughout his time in Government, flood defences were a big talking point for the Chancellor, with £140m of funding being announced, allowing 165 flood defence schemes throughout the UK to get started earlier than first planned. I’m sure this is music to the ears of people who are on constant edge thinking their homes are going to be flooded every time it rains, but I’m not sure exactly how many of those people it will have an impact on- £140m may sound like a lot of money, but in the grand scheme of things it’s a drop in the ocean when you think of the scale of the issue.

For me, the most interesting bit of the budget was when it got down to the nitty-gritty about a Northern Powerhouse. With stats showing that jobs grew faster in the North than in the South in the past year, the Chancellor had the perfect ammunition to talk about why the Coalition think this is exactly what we need. I’m totally behind the idea of revolutionising travel in the north- the project will deliver faster rail journeys, see major road improvements undertaken, better airport routes developed and will ultimately mean our region can achieve more nationally through increased connectivity and capacity. Why wouldn’t you back it?

In conjunction with the Construction Industry Council, RIBA North East, ICE North East, CIOB North East and FBE we’re holding a Question Time event about the power and role of our region in the UK construction industry and the Northern Powerhouse at the Newcastle Marriott Gosforth Park Hotel on April 17. To find out more or to book your place, contact Leanne McAngus on 0191 374 0233 or email leanne@cene.org.uk.

SpaceHus – 20th March Journal Column

spacehus logo_CMYKBy Rob Charlton, Chief Executive of Space Group

In construction, it is amazing what we will accept. Our industry moves from boom to bust and then back to boom again with unbelievable pace.

During boom, businesses grow and make profit. In recession, some businesses cease trading whilst others burn cash, bidding for work at less than cost to survive. We then move into growth again and more companies go out of business as costs increase as trades try to recover losses from the past.

We very quickly forget the pain of the downturns. During recession we don’t invest in the future, due to lack of resource, and in the boom times we still don’t invest as we are too busy making money.

The same issues are raised periodically as we move across the boom and bust cycle. “We don’t train enough apprentices.” ”There is a skills shortage.” “Trades people are in short supply.” “We can’t get bricks because we closed the plants” and so on.

What I find exasperating is that this has been happening for 50 years and we never seem to change anything. We do like to moan about things but never do anything about it- typical British some might say!

If you want to something to change, you have to change something! Doing the same thing will always give you the same outcome. The challenge we have is that companies are making money again and it is difficult to break the cycle. House builders are making profits in excess of £350 million per year so why would they want to change the system?

At Space Group we are doing everything we can to break this cycle.

Spacehus is an example of how we can improve outcomes by rethinking the entire design and construction process. The result is a high quality house which costs £80,000 and by offsetting solar energy generation, there are no net energy costs.

The house was designed digitally, so it could be prototyped and tested virtually. We then manufactured the components offsite and assembled onsite. We minimised preliminaries and waste during construction so that additional value could be invested in the product.

If we generated a pipeline, profit would grow and we could invest in training and continuous improvement of the process and product.

We can only achieve these outcomes by rethinking the entire construction process from start to finish.

However we must want to change. From experience I find we have very short memories and much of our industry is happy with the status quo and mediocrity. We shouldn’t be. We should continue to challenge and be as disruptive as we can in order to find a better way.