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Construction Parliamentary Update - 4 February 2011

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


Hampshire County Council set out its plans for meeting the £55 million funding gap without assistance from the Regional Growth Fund (RGF) and Council Leader Ken Thornber said that if there was no capital funding the authority would consider using PFI for major projects (1 February).

In an interview with the Daily Telegraph, Cabinet Office Minister Francis Maude MP said that Government reforms to public services will take the country beyond PFI and create a “new world”. Maude argued proposals to set up public service mutuals and similar partnerships will leave some existing PFI contracts “outdated” and unnecessary. He also confirmed he is working, together with the Treasury, to work out where savings can be made in existing PFI contracts (29 January).


The Commission for Architecture and the Built Environment (CABE) will close with 20 of its remaining 70 staff being transferred to the Design Council. Cabe’s previous funding departments Communities and Local Government (CLG) and the Department for Culture, Media and Sport (DCMS) approved the merger which is formally expected to start operation from April 01st (3 February).


The latest construction Purchasing Managers Index from Markit/CIPS showed construction activity returned to growth in January. A rise in new business and better weather conditions helped the sector make a strong start in 2011, with the PMI construction activity index rising to 53.7 in January from December’s reading of 49.1, which had been the first fall in 10 months (2 February).


Leeds City Region announced the board for its Local Enterprise Partnership (LEP) with Neil McLean, managing partner of DLA Piper Leeds, appointed chair of the Leeds LEP. The LEP also outlined its funding requirements from Government requesting £100 million from the Regional Growth Fund (RGF) for 15 projects, largely made up of housing, regeneration and transport schemes (2 February).

The Communities and Local Government (CLG) Department published a Summary Impact Assessment and a number of individual impact assessments on the separate measures within the Localism Bill including major infrastructure projects and the abolition of regional planning tier (31 January).


The Scottish Government announced a new £50 million fund to be used to finance new affordable housing developments across the country. Housing Minister Alex Neil confirmed that the new Innovation and Investment Fund is expected to support the building of around 1,500 new affordable homes and release more than £100 million in additional investment (3 February).

Former government adviser and housing expert Kate Barker will join the board of housebuilder Taylor Wimpey from 21 April. She previously served on the Bank of England’s monetary policy committee and conducted the 2004 Review of housing supply, which informed the Labour Government’s housing policy. She is also a member of the board of the Homes and Communities Agency, a role she will leave before taking on her new role (3 February).

Nottingham City Homes (NCH) the body that manages the City Council’s housing estate applied for £26 million to refurbish those houses most in need in the area. The authority was originally set to receive £200 million in PFI credits but the money is no longer available so the council is hoping the smaller funding application will be approved (31 January).


The Secretary of State for Education Michael Gove MP attended the first national Free Schools conference and announced that the Department for Education have approved eight proposals to set up Free Schools, including Stour Valley Community School in Suffolk. The other seven are based in London, West Sussex, Norwich and Leicester (29 January).


Audit Scotland published a report on the Edinburgh Tram project calling for Transport Scotland to become more involved in the management of the scheme. The report warned that “public confidence in the project is extremely low” and the City of Edinburgh Council and the body set up by the council to deliver the tram system, Transport Initiatives Edinburgh (TIE) urgently needed to put in place a clear way ahead for the project (2 February).

The two bids in the running to build the new road bridge over the Firth of Forth have submitted their final proposals; Forthspan and Forth Crossing Bridge Constructors (FCBC) are competing for the contract to build the new bridge and connecting roads.
The submission of the final tenders for the contract, expected to cost between £0.9 billion and £1.2 billion, comes after a year-long competitive process between the two consortia and Transport Scotland (31 January).

During Prime Minister’s Question Time David Cameron MP was asked when improvements to the A11 in Norfolk and Suffolk will start so that the economic benefits can be delivered as soon as possible. The Prime Minister confirmed that the Highways Agency is preparing a delivery programme, and construction work will start in the current spending review period (30 January).

The Welsh Assembly Government approved funding to assist in the extension of Llangollen Railway. Deputy minister for housing and regeneration Jocelyn Davies announced that £500,000 had been approved for the next financial year but because of the considerable progress made by the Llangollen Railway Trust, £370,000 of that funding will be available this year to allow work to begin (28 February).

Greenwich Council’s planning committee approved plans for a cable car scheme across the River Thames to link the 2012 Olympic venues. The cable car link is a Transport for London project, which will provide a river crossing between Greenwich Peninsula and the Royal Victoria Dock in Newham. It is now due to go before the Greater London Authority (GLA) for final consideration (27 January).


Defence Estates (DE) announced that future suppliers to the military estate will benefit from measures to ensure that all businesses are paid punctually, irrespective or size or specialisation. DE will introduce Project Bank Accounts to allow direct payment to supply chain members, sub-contractors, and main contractors, under future commercial arrangements on its estate, including those being developed across the UK under its’ Next Generation Estate Contracts (NGEC) programme (2 February).


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