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Construction Parliamentary Update - 2 December 2011

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


Forecasts set to tumble despite Chancellor’s construction commitment

Industry forecasts look set to be downgraded on the back of the autumn statement despite a “huge commitment to infrastructure” announced by the Chancellor George Osborne. Turmoil in the eurozone and an “inflation shock” caused by rising commodity prices saw the Office for Budget Responsibility revise the country’s output figures down from 1.7 per cent to 0.9 per cent this year and from 2.5 per cent to 0.7 per cent in 2012. (29 November)

Cities encouraged to embrace TIF

Cities will be encouraged to borrow against future revenue streams under the tax increment financing (TIF) model to raise money to fund infrastructure. George Osborne said in his full autumn statement, that the government will consider allowing city mayors and partner local authorities to borrow against the income they receive through the Community Infrastructure Levy (CIL), which allows local authorities to charge on new developments, such as safer road schemes, park improvements or a new health centre. (29 November)

Cutting VAT on repair work to 5% could create 100,000 jobs, says FMB

Cutting VAT on repair and maintenance work to just 5% could create over 100,000 jobs by 2020, the Federation of Master Builders has claimed. Research by Experian for the FMB concluded the cut on would create a total stimulus of £20.1bn in the UK economy by 2020. It would also result in 44,100 jobs in construction and 56,500 jobs in the wider UK economy, the research said. (28 November)


Treasury publishes pipeline of hundreds of infrastructure projects

The publication of hundreds of public and private projects by the Treasury has satisfied a construction industry campaign spanning decades. A list of the projects, which includes a funded construction pipeline of more than £36 billion, was published alongside the Chancellor’s autumn statement. Two pipelines, one for infrastructure and another for other construction work, include details of the timing and value of the projects to help contractors plan their focus and resources. (1 December)

Welsh Assembly £90 million infrastructure boost

The Welsh Assembly has committed almost £90 million to infrastructure projects over the next three years. The centrally retained capital fund for 2012-13 and 2013-14 will fund 16 projects, mostly construction related. The Assembly has committed £31 million to Education projects, £16.6m to health projects, £11.7 million to transport projects and £15 million to Housing. (25 November)


Housebuilder activity ‘returning’

Housebuilder demand for land is increasing in the South-east, according to a regeneration specialist involved in a £5 million deal this week. Inland Homes this week announced the sale of 88 plots with planning consent for apartments at Drayton Garden Village in West London to a major house-builder for at least £5.75 million. (30 November)

House prices fall as sellers seek to move by Christmas

House prices dropped for the sixteenth consecutive month in November, falling by 0.2% on the previous month as buyers retreated from the market. According to housing data firm Hometrack, demand fell for the fourth month in a row, shrinking by 2.2% with Hometrack expecting the trend to continue in the month up to Christmas, as sellers’ keenness to move before the festive period throws the supply and demand balance into negative territory. (28 November)


£150m green power station gets the go-ahead

A £150m green power plant in Newport, Wales, is to be built after Welsh Power sold half of the project to banking group Santander. The Nevis biomass power station will be run using renewable fuel, and will be capable of supplying electricity to around 50,000 homes in the Newport area. It will be built on a 10-acre brownfield site in Newport docks. Preferred contractor Doosan Power Systems is now expected to start building work next April or May, creating around 200 construction jobs. The plant’s commercial operations will begin in June 2014, creating 30 more jobs. (1 December)


Regional growth fund gets extra £1bn

The government has increased the Regional Growth Fund for England by £1 billion in order to support the private sector in areas currently dependent on public sector spending. The fund is designed to support projects and programmes that lever private sector investment to create economic growth and sustainable employment. (29 November)


Health and safety regs to be cut in half within three years

The government has announced plans to begin a wide ranging cut back of health and safety regulations which could see rules removed from the statute book within months. It will begin an immediate consultation of the abolition of which rules to scrap. And from 1 January a new challenge panel will allow businesses to get the decisions of health and safety inspectors overturned immediately if they have got it wrong. The move comes as the long awaited Löfstedt Review into health and safety legislation was published. The report, commissioned by employment minister Chris Grayling in March, recommends that health and safety law should not apply to the self-employed whose work poses no potential risk of harm to others. (28 November)


Autumn Statement: Road and rail schemes highlighted by the Chancellor

The Chancellor has set out plans to progress 35 rail and road schemes as part of the Autumn Statement, emphasising there will be benefits in the north of England as well as the south. As well as progressing new crossings on the Lower Thames and Silvertown, a new link between Oxford, Milton Keynes and Bedford will be progressed while the Tyne Wear Metro was also announced to move forward. (29 November)

Network Rail announces £46m funding for station upgrades

Network Rail has announced more than 20 projects will receive £46 million of funding as station upgrades take place across the UK. The schemes form the second tranche of successful bids for a £100m station improvement fund, launched earlier this year by Network Rail, the Department for Transport and the Association of Train Operating Companies. (29 November)


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