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Construction Parliamentary Update - 26 November 2010

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

REGENERATION

Communities and local government secretary Eric Pickles has granted government approval to a controversial £700 million Tithebarn regeneration proposal. Mr Pickles over-ruled an inspector’s recommendation to reject the shopping development following extensive opposition from Blackburn Council, Blackpool Council and English Heritage (23 November).

Plans for extensive redevelopments of the Vauxhall, Nine Elms and Battersea area have been announced by Sainsbury’s and Royal Mail Group. Plans by both companies will create a myriad of new construction jobs for local residents, boosting the local economy and potentially helping those affected by cuts to public sector jobs (23 November).

The Commission for Architecture and the Built Environment (CABE) has published a report claiming that supermarket-led developments in town centres will be a liability rather than an asset to the community if they are not well designed. The report, entitled Supermarket-led development: asset or liability, is based on review by CABE of 30 major schemes nationwide by retailers such as Tesco, Asda and Sainsbury’s (21 November).

CONSTRUCTION

The Civil Engineering Contractors Association (ECA) has welcomed the publication of Infrastructure UK’s cost review interim report. ECA was encouraged by the findings which stated that ‘stop-start investment’ and a lack of certainty surrounding programme investment reduces efficiency and has a negative impact on UK infrastructure investment (27 November).

McKinsey has published a report, entitled From Austerity to Prosperity, claiming that the UK needs more than £500 billion over the next 20 years to maintain existing transport and energy infrastructure. However, the report said that greater regulatory certainty and improved economic returns will be needed to attract the private capital necessary (24 November).

The Shard, currently under construction near London Bridge in Southwark, has replaced One Canada Square as the tallest building in Britain. The 210 m tall, 72-storey mixed-use tower, designed by Renzo Piano Building Workshop, will become the tallest building in the EU when completed in 2012 (24 November).

In a speech at Old Marylebone Town Hall, Westminster, the housing minister Grant Shapps outlined the changes that the new Localism Bill will entail. He described how increased transparency will improve accountability and encouraged councils to embrace the new freedoms after years of centralisation that had left some authorities in a “straight jacket” (24 November).

Driers Jonas Deloitte has released its latest Crane Survey research citing that construction in central London is at a 20-year low, with just 250,000 sq m under development. The figures suggest that overall development is down by almost 70 per cent on this time last year, while the report also indicates that 2010 and 2011 will see the lowest level of new commercial completions on record as the hangover from the recession continues (23 November).

The Department for Communities and Local Government has published a report entitled The Community Infrastructure Levy: Summary. The document is intended to provide an introduction to the new levy that local authorities in England and Wales can choose to charge on new developments in their area. The funding can be used to support development by funding infrastructure that the council, local community and neighbourhoods want (23 November).

The Home and Communities Agency (HCA) has announced changes to its senior structure. This marked the first steps in the plans confirmed by housing minister Grant Shapps to transform the HCA into a smaller enabling body working for local communities on their priorities. This follows the review of the role of the HCA in the Comprehensive Spending Review, which will lead to a reduction in its running costs by half over two years, saving the taxpayer over £100m by 2014-15 (23 November).

The Electrical Contractors Association (ECA) has warned that the construction industry is “to face troubles in 2011” following recent figures published by The Royal Institute of Chartered Surveyors (RICS) citing that a balance of 10 per cent of the group’s members saw construction workloads decline during the third quarter of this year (23 November).

The Housebuilding Federation has written a letter to Chancellor George Osbourne voicing its concerns that new lending rules currently under consideration will demolish the industry. This follows a speech at Bevin Hall, Local Government House, by the government’s chief construction advisor Paul Morrell urged the industry to use the recession to reflect, and begin the change needed in order to emerge from the recession “leaner and fighting fit” (22 November).

In a speech at Localis in London, the decentralisation minister Greg Clark outlined the government’s proposals to improve national policy and national processes for planning. He said: “Our aim is that these reforms should help Britain break out of the current housebuilding trough; enable commercial development so that businesses see the planning system not as a drawback but as an advantage; and lay the foundations for the beautiful, successful, thriving communities of the future.” This follows the announcement by Mr Clark of new reforms which will give more of the benefits of development to communities while providing more certainty for industry (18 November).

EDUCATION

The education secretary Michael Gove has outlined a radical reform programme in the schools White Paper, entitled The Importance of Teaching. It draws heavily on the evidence learnt from the world’s best education systems and will see heads and teachers driving school improvement and increased freedom from centralised bureaucracy and excessive government interference (24 November).

HOUSING

Speaking to the National House Building Council, housing minister Grant Shapps announced that the government will not introduce a new set of building standards that were proposed for many of the homes built with government funding or on public sector land, which would have cost developers an extra £8,000 for every home. Mr Shapps also pledged to end the ‘alphabet soup’ of local building standards and red tape that blight efforts to get developments started, and sweep away the bureaucratic assessment regimes that accompany them. He invited the industry to come forward and help develop a new system for local standards so new development meets the needs of local communities, without placing an unnecessary strain on developers (25 November).

In Prime Minister’s Question Time, David Cameron responded to a question by Mark Pawsey MP regarding the government’s recent publication of their new homes bonus by saying, “For years, we were spending lots of money on housing but not building any houses - why?” He continued: “We are changing that so that even though the resources are limited, a lot more housebuilding will go ahead” (24 November).

The Welsh Assembly Government has exceeded its target of delivering 6,500 new affordable homes during the term of government, one year ahead of schedule. This follows the announcement of a Draft Assembly Measure which will make changes to support the more effective delivery of affordable housing in Wales has been laid (24 November).

The Scottish Government has released official figures citing that the number of council houses started across Scotland in 2010 increased by over 100 per cent compared with 2009. This represents 866 local authority homes started, more than double the 379 started during the same period in a year ago (24 November).

Housing minister Grant Shapps and communities minister Andrew Stunell have announced plans for the most radical reform of social housing in a generation with a devolution of power from Whitehall to councils and local housing associations. The Department of Communities and Local Government published a consultation document entitled Local decisions: a fairer future for social housing, outlining plans to reform social housing in England. This includes the option of shorter tenancies, as well as allowing social landlords to charge a higher rent for shorter term tenancies, of up to 80 per cent of local market rents. The publication also confirmed the cancellation of all PFI credits for housing round six, which has prompted widespread doubts over the future of the procurement model for social housing. Experts warned that this could spell the end of PFI in the housing sector and beyond. However, the Home and Communities Agency (HCA) confirmed the continuation of funding by the Department for Communities and Local Government for the 13 housing schemes worth £1.2 billion currently in procurement (22 November).

TRANSPORT

Transport minister Philip Hammond has announced that Britain will invest £6 billion in the Thameslink railway linking the south coast of England and town north of London. The investment will occur over four years from 2015 and will be spent on station improvements, new track and 1,200 new train carriages. Mr Hammond also said the government would announce its preferred route for a high speed rail link between London and Birmingham before the end of the year (25 November).

The Isle of Wight Council has launched a transport strategy for the next 27 years following the approval granted for its highway PFI scheme in the government’s Comprehensive Spending Review. A 12-week consultation will begin on a draft Island Transport Plan in two separate parts. There will be an Island-wide strategy covering 2011 to 2038 and an implementation plan, to run from 2011 to 2013, pending the start of the highways PFI (22 November).

The Prime Minister David Cameron has insisted that the government’s proposed high speed rail link will go ahead, despite three ministers, including a member of the Cabinet, threating to resign rather than support the government’s HS2. HS2 has also been strongly opposed by backbenchers of all parties, including the speaker John Bercow. The government is preparing a formal consultation on the £17 billion London to Birmingham line, which would see up to 18 trains an hour travel at 250 mph through the heart of the Chilterns, Buckinghamshire and Warwickshire (20 November).

The National Audit Office (NAO) has published a report claiming that the M25 road widening PFI contract was so slowly procured it resulted in financing costs spiralling to nearly 25 per cent more than they should have been. The study criticised the Highways Agency for being slow to investigate potentially cheaper alternatives to the widening and claimed that up to £1.1 billion could have been saved if the agency had chosen to use hard shoulder running (19 November).

Mayor of London Boris Johnson and rail minister Theresa Villiers have unveiled the designs of Crossrail stations to be built across Central London and the Docklands. The work at Bond Street, Canary Wharf, Custom House, Farringdon, Liverpool Street, Paddington, Tottenham Court Road and Whitechapel will create thousands of jobs and potentially generate up to £50 billion for the UK’s GDP (18 November).

OLYMPICS AND 2012

The deputy chairman of London 2012 and director of Tottenham Hotspur FC Sir Keith Mills has admitted that West Ham is in pole position to take over the Olympic stadium, assuming that their bid “stacks up economically”. Controversially, Tottenham/AEG’s bid involved removing the running track from the stadium, whereas West Ham pledged to keep it. The Olympic Park Legacy Company (OPLC) is due to decide between the two bids before Christmas. This follows the announcement that a new bridge was successfully lifted into place connecting the Olympic Park to local areas in Hackney and Waltham Forest (24 November).

 

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