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Construction Parliamentary Update - 15/10/10

A round-up of all the construction news from Westminster this week, brought to you by the Madano Partnership

GENERAL

The Cabinet Office has released the full list of quangos to be retained, merged or abolished. The bodies to be abolished include the London Thames Gateway Development Corporation, the National Housing and Planning Advice Unit and the Olympic Park Legacy Company. The bodies still under consideration include the Commission for Architecture and the Built Environment (CABE), the Engineering Construction Industry Training Board and the Construction Industry Training Board. Those to be retained and reformed include the Building Regulations Advisory Committee and the Home and Communities Agency (14 October).

The Federation of Master Builders’ latest State of Trade Survey provided a gloomy outlook for small to medium-sized firms in the construction sector. The survey showed 42 per cent of respondents to the federation’s Q3 2010 State of Trade Survey said that public new-build workloads had fallen and that a further 51 per cent expect them to do so again in the next three months (13 October).

CONSTRUCTION

The Institution of Civil Engineers has released its latest Salary Survey revealing that civil engineers pay increased during the last tax year which saw the average total salary increase by 4 per cent to £53,965. The basic income of civil engineers rose by 2.8 per cent to £48,588 in the 2009/10 tax year while the higher figure included secondary income and bonuses (14 October).

PricewaterhouseCoopers has published a report claiming the government decision to cut public spending by £83 billion will result in excess of 100,000 construction redundancies in the next four years. According to the report an output loss of around 5 per cent will prompt the losses, while in the wider private sector nearly 500,000 jobs are likely to be cut as the government continues to abolish capital projects. This follows a Joint Declaration from the Devolved Administrations signed by First Ministers for Wales, Scotland and Northern Ireland as well as deputy First Ministers calling for the UK government to scale back plans for spending cuts in the Comprehensive Spending Review (13 October).

The Construction Equipment Association (CEA) has joined the British Materials Handling Federation (BMHF), the representative UK organisation for all materials handling products. CEA director of member services Tim Faithfull has been appointed secretary general of the BMHF (12 October).

The Highlands and Islands Enterprise, the Scottish Government’s economic and community development agency, has announced the preferred bidder for its £32 million single operator framework contract. The four-year contract has been awarded to Rok, who will undertake every stage of the HIE’s building projects across the entire Highlands and Islands region, including design, construction and completion (11 October).

REGENERATION

Knowsley Metropolitan Borough Council has announced that the £18.5 million Merseyside regeneration project has been awarded to Morgan Sindall. The Stockbridge Village project involves a primary school, neighbourhood centre with leisure facilities and retail space as part of a wider £25m regeneration scheme. The regeneration will be delivered in five phases and is expected to be completed in spring 2012 (12 October).

A planning application is due to be submitted for a £30 million shopping centre in Peterborough to regenerate the former Royal Mail sorting office. The scheme will include a supermarket, 500 space underground car park and 50,000 sq ft of office space in Peterborough city centre. ING is hoping to start work on the mixed-use scheme in 2012 (11 October).

A delegation from Leeds City Council, led by Leeds North West MP Grey Mulholland, is to urge the chief secretary to the Treasury Danny Alexander not to abolish the Holt Park Wellbeing Centre. The centre had been awarded £30 million in PFI credits, but just two weeks before work was due to begin on the scheme, the government suspended the funding. The group of local councillors and officials are seeking assurance that the project will not be among the cuts to be outlined in the Comprehensive Spending Review on 20 October (13 October).

Barclays Infrastructure Funds has announced the final closure of its sixth infrastructure fund. The Barclays Integrated Infrastructure Fund raised £645m from a variety of investors, including corporate pension funds, local authority pension funds, insurance companies, asset managers and sovereign wealth funds. The fund will begin investing in brownfield projects before potentially moving to greenfield projects in later investments (12 October).

HOUSING

Housing minister Grant Shapps has pledged to reduce red tape and make it easier for builders and developers to get housing projects started. The minister pledged to tackle the ‘alphabet soup’ of standards and red tape that blight efforts to start new developments and encouraged industry leaders to work with the government in order to simplify the system. The Home Builders Federation welcomed the commitment but “demanded more detail on the policies behind the promises” (13 October).

Following the publication of the Knight Frank Green Homes 2010 study into the impact of zero-carbon requirements on the industry, housebuilders have claimed the government’s 2016 target will negatively affect the sector’s ability to increase volume. The study confirms a general disappointment with the lack of policy direction provided over recent years and a “more worrying concern” over the impact of the zero-carbon homes agenda on the ability of the sector to raise development volumes (11 October).

The Confederation of British Industry’s (CBI) has published a report calling for more competition in social housing in order to provide better quality housing for tenants and considerable savings for taxpayers. The CBI said that £1.5bn could be saved in England alone by allowing local councils and housing associations to choose the best provider of services, whether they are from the private, voluntary or charity sectors. The Improving homes, improving lives: using competition for better social housing report is being launched at the Inside Government Social Housing Conference in London (12 October).

EDUCATION

Education secretary Michael Gove has defended his abolition of the Building Schools for the Future scheme. Speaking during the House of Commons education debate, Mr Gove referred to the four local councils currently bringing legal challenges against the government, stating that the government would “vigorously contest the judicial review”. The newly appointed shadow education secretary Andy Burnham questioned Mr Gove on the issue and asked “how much [the education] department has set aside to cover the legal costs and possible compensation to local authorities caused by the mistakes” made (12 October).

Northamptonshire County Council has awarded a £25.7 million Kettering Science Academy contract to Willmott Dixon. The academy is part of Northamptonshire County Council’s £55 million academies building programme. Work will start on the site later this month to create a new 1,100 place school, sponsored by Brooke Weston Academy Trust (11 October).

The government’s free schools policy has been criticised because conversion and new-build projects are deemed too complex for 2011 completion. Some of the government’s first free schools may have to open in temporary buildings as time runs out to prepare permanent classrooms. Sixteen schools are due to open in September 2011 which have been approved in the first wave of proposals following the announcement of the free schools policy. The government has asked delivery agency Partnerships for Schools (PfS) to help groups with the commissioning of building work, but it is unclear how services will be procured (8 October).

TRANSPORT

Network Rail and Gatwick Airport have agreed to a £53 million funding package for the expansion of the airport’s rail station. Network Rail will contribute £44.9m while Gatwick Airport will provide £7.9m in funding for the scheme which will deliver a new platform, concourse refurbishment and signalling and track upgrades. Major construction work is scheduled to start on site in autumn 2012 after the London 2012 Olympic and Paralympics games have finished. The project is expected to be completed by the end of 2013 (13 October).

The much anticipated new UK high-speed rail network has progressed to the next stage of High Speed Two (HS2) planning. A key feasibility contract has been awarded to a consortium of Scott Wilson/Mott MacDonald. The consortium will conduct architectural, infrastructural and operational studies for the section of the line that runs from Birmingham to Manchester. Arup won a second contract for the line running from Birmingham to Leeds. Sources say that the combined value of the contracts would be around £2m. The sale of High Speed One could be delayed by a further four to six weeks as banks are yet to finalise funding with the bid deadline just over a fortnight away (13 October).

Speaking at the New Civil Engineer Rail Summit in London, transport minister Theresa Villiers announced plans to drastically reform Network Rail. Her speech included plans to split Network Rail into regions and increase private investment in order to improve efficiency in the railway network. The leader of the value-for-money national railway study, Sir Roy McNulty, confirmed his support for the proposed reforms (7 October)

OLYMPICS AND 2012

London Mayor Boris Johnson secretary of state for Culture, Olympics, Media and Sport Jeremy Hunt and the Olympic Park Legacy Company (OPLC)have unveiled plans for the new 500-acre Queen Elizabeth Olympic Park in east London. The OPLC had originally intended a high-density scheme with plans to create 11,000 new family homes and community facilities more in keeping with park. The revised plans include 8,000 homes, excluding the 2,800-home athletes’ village, a reduction from the original plan for 10,000-12,000 units. Mr Johnson said the OPLC would soon begin talking to developers around the world in a bid to find funding for the plans, which will be formally submitted within the next 12 months. Work should start on the site in 2014 (7 October).

The London 2012 construction workforce has grown to in excess of 10,000 employees currently working on the Olympic Park and athlete’s village. Olympic Delivery Authority chairman John Armitt said: “The Olympic Park and village ‘big build’ are on track thanks to the hard work of everyone on the site. In a tough time for the construction industry we are providing jobs for over 10,000 workers and meeting our commitments to safety, training and employing local people and apprentices” (12 October).

FLOODING

According to an independent review commissioned by the Regional Flood Defence Committee, the chances of flooding in the centre of Northampton have been reduced to a one in 200 chance after a three-year river defence project costing £7million. The Northampton Standards of Protection Review is the culmination of 10 months of detailed studies by international design and engineering consultants Scott Wilson. The review looked at the improved flood defences built by the Environment Agency in the centre of Northampton after the floods of Easter 1998 and confirmed that the defences continue to offer the 0.5 per cent standard of protection they were designed to provide (11 October).