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.

19th March Newsletter

Web-LogoTo view this week’s newsletter please follow the link – March 19th 

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.