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Construction Parliamentary Update - 25 March 2011

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


The 2011 Budget saw Chancellor George Osbourne pledge £300m to new infrastructure projects. This will include £200 million being spent on railway improvements, primarily in Manchester and Swindon, and £100million going to local councils to repair potholes. Alasdair Reisner, director of external affairs at the Civil Engineering Contractors Association, said this “represents a huge victory for the industry, which has long campaigned for greater clarity over future opportunities.” (23 March)


Communities secretary Eric Pickles has said that the changes in planning and housing laid out in the Budget will boost local growth. Following plans to cut the amount of red tape for councils and businesses, schemes will be put in place to attract new investment to the housebuilding industry and boost planning and building. Mr Pickles said: “Instead of fighting against development imposed from Whitehall, local people will have a far greater influence over what is built in their area. Every new home built will create jobs in the UK building industry. Together, these measures to support local jobs and local firms will play a crucial part in the government’s wider work to get the economy back on its feet.” (23 March)

A committee of MPs has found that the New Homes Bonus will not be enough to outweigh the abolition of the regional spatial strategies. A report by the communities select committee said the abolition would hold back development and delay economic growth. The committee found no evidence that the New Homes Bonus, which gives financial incentives to councils for building houses, would boost plans for housing development, as minsters predict. Committee chair Clive Betts said that the government needed to decide whether promoting localism in planning is more important than building more houses than the preceding government. (18 March)


The government has announced that it will cut construction costs by 20 per cent. Laid out in the Plan for Growth that accompanied the Budget, it revealed plans to standardise design of buildings in the public sector in order to reduce procurement costs. The plan said: “[We will] enable building contractors to respond more effectively to emerging market opportunities by publishing quarterly from autumn 2011, a rolling two-year forward programme of infrastructure and construction projects where public funding has been agreed.” (23 March)

Construction firms are waiting for appeal decisions from the Office of Fair Trading that could see the bulk of their bid-rigging fines wiped out. Kier, Ballast Nedam, Bowmer & Kirkland, Corringway Conclusions, Thomas Vale and Sisk Group all received reductions of up to 94 per cent from the Competition Appeals Tribunal, with Kier having its fine reduced from £17.9m to £1.7m. Construction lawyers said that the decision highlighted a commonality across the cases and were positive that other firms would receive similar reductions. (18 March)

Business secretary Vince Cable has announced that workers at SMEs will lose the right to take time off to train. The plan, which is aimed at companies with fewer than 250 employees, is part of a bid to free small companies from red tape. Construction union Ucatt has voiced its fears over the decision. “The announcement has very serious implications for the construction industry. As the industry recovers from recession there are genuine concerns that fatalities and injuries will increase. [If] high levels of safety training are not provided to new entrants, those dangers will increase,” a Ucatt spokesperson said. (18 March)


George Osbourne has unveiled a £250million housing plan in the 2011 Budget. The shared equity scheme will help first-time buyers and should help with the construction of 100,000 new homes. Similar to Homebuy Direct launched by the Labour government, the new plan will offer 10 per cent of the cost of the house, which will be matched by the housebuilder, as an equity loan. (23 March)


The House of Commons Committee for Transport will make an enquiry into the High Speed Rail programme. A large focus will be on the business scheme of case for the rail line, which will initially run from London to Birmingham, and the committee will look for proof of assumptions of economic benefit. The committee will also consider the environmental impact of the HSR and the plans to extend it north of Birmingham. (18 March)


Boris Johnson has announced a £70 million green investment fund that will finance low-carbon waste and recycling infrastructure. The Foresight Group will manage the waste and recycling as part of the London Green Fund, which is the first fund to combine public and private finance to invest in environmental infrastructure. (21 March)


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