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Construction Parliamentary Update - 21/01/11

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


The House of Commons Public Accounts Select Committee has called on ministers to do more to ensure they get good value from homes and hospitals built under private finance initiatives. The committee found that councils and health trusts have been forced to use PFI contracts as there was “no realistic funding alternative”. But there was no evidence they offered better value for money than other types of funding for large projects, it said. Writing in the Daily Telegraph, Jesse Norman MP criticised the “unholy alliance” between the Treasury and PFI contractors and called for “an entirely new approach to using private sector finances” (17 January).


The latest figures from Glenigan show that UK construction projects starts will be 7 per cent lower this year than in 2010. The Index for December also fell by 29 per cent on a year earlier, with extreme weather conditions and the slowdown in government investment ensuring that December was one of the lowest monthly totals of projects starts in years (20 January).

Construction work has begun on the £500 million new skyscraper at 20 Fenchurch Street, better known as the Walkie Talkie. The building will be 37 storeys high when completed and topped with a public sky garden. Ground floor completion is scheduled for February next year, while final completion is due for early 2014 (19 January).

According to the latest data from the Office for National Statistics, the construction industry did £2.6 billion more work in the three months to November compared with the same period a year earlier (14 January).


The Scottish Government has announced that funding had doubled for affordable homes, with £5 million put forward to provide support for Scotland’s housebuilders. The New Supply Shared Equity with Developers scheme involves participating housebuilders taking equity stakes jointly with the Scottish Government in unsold or partially built new homes. Buyers will pay 60-80 per cent of the purchase price, with the remainder of the cost split equally between the Scottish Government and the developer (19 January).

The latest Housing Market Survey from the Royal Institute for Chartered Surveyors shows that activity in the housing market continued to slow during November, with 44 per cent more chartered surveyors reporting a fall in prices rather than a rise in November (14 January).


Hertfordshire County Council has reached financial close with their preferred bidder for the £80 million school building scheme in Stevenage. The scheme involves the design and construction of two mainstream secondary schools and a special educational needs school. Work is expected to start on site in February 2011 (17 January).

Oldham Council has announced the preferred bidder for the £26.3 million contract on the second of three academy schools. The new Waterhead Academy, sponsored by The Oldham College, will be delivered by Willmott Dixon and is scheduled to open in November 2012 (14 January).


The Royal National Orthopaedic Hospital (RNOH) has announced that it is going ahead with plans for a £70 million redevelopment of its north London site. The RNOH has invited bids for a consortium that can design, build, service and fund the redevelopment (18 January).


The London Assembly has questioned Mayor of London Boris Johnson in his capacity as chairman of Transport for London (TfL) and transport commissioner Peter Hendy on topics including increasing transparency within Transport for London, the New Bus for London scheme and plans for generating one million additional cycle journeys by 2026 (19 January).

The Department for Transport has published the Local Transport White Paper, setting out the government’s vision for a sustainable local transport system. The paper outlines government plans to make travelling on foot, by bike or on public transport more attractive and making those journeys that are made by car as sustainable as possible. However, the Civil Engineering Contractors Association criticised the paper for its lack of focus on infrastructure-related investment (19 January).

Deputy chairman of Transport for London Daniel Moylan has published a new report putting forward the economic and business case for building a new hub airport in London to cope with increased passenger demand. A new airport for London calls on the government to review London’s airport capacity in light of advances made by European competitors at the expense of Heathrow airport (18 January).

The tender process for all new Crossrail central London stations is now under way as Crossrail begins the procurement process for work at four central London stations including Bond Street, Liverpool Street, Tottenham Court Road and Whitechapel worth £950 million. The procurement process for Farringdon and Paddington Crossrail stations commenced last year and Crossrail intends to award the main construction contracts for all central London stations by the end of 2011 (17 January).

Essex County Council has announced the shortlist of three bidders for the council’s 10-year highways maintenance and service contract worth £3 billion, with the preferred bidder to be selected by September 2011 (14 January).


The latest employment and skills figures published by the Olympic Delivery Authority (ODA) show that the combined construction workforce on the Olympic Parks and Athletes’ Village has reached 12,112. Nearly a quarter (24 per cent) of the current ‘big build’ workforce are resident in the five Host Boroughs and six out of 10 (60 per cent) live in London. The ODA’s ‘Jobs, Skills, Futures’ targets include delivering an Olympic Park construction workforce made up of at least 15 per cent of residents of the five Host Boroughs (20 January).

The London Assembly has called for public funding to ensure that the Olympic Park does not become an ‘island of prosperity surrounded by areas of deprivation’. The Assembly warned that local people would miss out if private developers took over the site and suggested that public investment should be used to guarantee a legacy of mixed communities, new schools and local facilities. The Olympic Delivery Authority has put aside £350 million for clearing the temporary buildings and making the land ready for development after the Olympics. The Assembly said a further £500m had been earmarked by the government (19 January).


The Scottish Government has announced that it is inviting bids to build a £100 million prison to replace existing prisons at Peterhead and Aberdeen. HMP Grampian will accommodate 500 cells and be built on a site next to the present Peterhead prison (18 January).


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