The government has pledged £45 million to help unlock more than 2,000 private rented homes in Manchester, Leeds and Birmingham. Projects in the three cities will receive £45 million from the government’s new £3 billion Home Building Fund, which will help to construct 25,000 new homes over the next four
The government has announced that funding has been set aside for several more Northern Powerhouse projects. Chancellor Philip Hammond confirmed that the government is to provide £556 million to Local Enterprise Partnerships throughout the north through a third round of Growth Deals. The government has also backed four more major
BESA has released details of a raft of new Government’s measures to help employers take on more apprentices, including £60 million to be spent on helping young people from deprived backgrounds get into work. The association says that employers with less than 50 employees will receive 100% of the cost
Transport Secretary Chris Grayling has confirmed that the government is staying committed to the £50 billion High Speed 2 rail project despite the change in Downing Street occupants. HS2 was a key government scheme under former prime minister David Cameron and chancellor George Osborne, but since they have been replacement
Historically, the manufacturing and construction sectors have been considered as key economic indicators in the Western world. They also have a close and undeniable affinity, with residential and commercial construction representing the ultimate manufacturing process. These markets have experienced mixed fortunes in recent times, however, with manufacturing being increasingly maligned
The government will take a golden share in all future nuclear new build projects to stop them from falling into undesirable foreign ownership. After a review of the Hinkley Point C deal, in which EDF sold a significant stake to China General Nuclear Corporation, the government is now planning to
As previously reported, concerns have already been raised as to the division of governmental spending between SME and larger enterprises. And while governmental figures have highlighted a marked increase in the usage of SMEs on key contracts, further woes have been raised as to the skewing of such results where
In a recent report the government has been urged to consider a more considerable approach on the procurement of services from SMEs. The report, which was produced by the National Audit Office, has highlighted growing concerns as to whether the government will be able to hit increased SME spending targets
On 1st April 2016 the National Minimum Wage (Amendment) Regulations 2016 will come into force, introducing the national living wage. This highly anticipated change in law, announced by the Government last year, aims to help Britain’s lowest paid workers improve their standard of living, bringing direct benefits to 2.7 million
Towards the end of last year, the Solar Trade Association (STA) launched an emergency rescue scheme to prevent the solar industry going into turmoil. Despite the government promising a vote by 2016, STA’s “£1 solar rescue plan” remains up in the air. Within its proposal, STA promised a rise of
The government has pledged £45 million to help unlock more than 2,000 private rented homes in Manchester, Leeds and Birmingham. Projects in the three cities will receive £45 million from the government’s new £3 billion Home Building Fund, which will help to construct 25,000 new homes over the next four years The funding will support a £400 million PRS development pipeline throughout the three regions, with 995 new homes in Manchester, 744 in Leeds and 323 in Birmingham. Developer Dandara Group is leading the project with backing from the Homes and Communities Agency and HSBC. Dandara will manage the letting and management of all the developments built using the funding. Work is set to commence in January 2017 and is due to be completed in December 2019. The government estimates the work will help to create a further 1,500 construction jobs across the three cities. Hugh Taylor, HSBC head of housing in the UK, commented: “We are really pleased to be supporting Dandara alongside the HCA with development finance on this multi-site roll-out of their PRS programme. “It is a significant contribution to the housing challenge and is further evidence of PRS beginning to emerge as a distinct asset class.” Communities secretary Sajid Javid launched the Home Building Fund at the Conservative Party conference and is designed to provide loans for small and medium enterprise builders, custom builders, offsite construction and essential infrastructure. The measures form part of the government’s £7.2 billion investment in housing announced in last week’s Autumn Statement. Housing minister Gavin Barwell has reiterated the government’s commitment to the build-to-rent sector, and confirmed last week that a package supporting the sector would be included in a housing white paper due to be published next year.
The government has announced that funding has been set aside for several more Northern Powerhouse projects. Chancellor Philip Hammond confirmed that the government is to provide £556 million to Local Enterprise Partnerships throughout the north through a third round of Growth Deals. The government has also backed four more major schemes through its Local Majors Fund: the Warrington Waterfront Western Link, the Sheffield Supertram renewal, the Tees Valley east-west connection project and the A1079/A164 Jocks Lodge Junction in East Riding. All four of these projects have successfully bid for business case development funding. Along with these, the M6 North West quadrant of Manchester and the Pennines A66 improvement works will also be included as part of the government’s latest Roads Investment Strategy, while two junctions of the A69 will be improved using pinch-point funding. The government is also set to carry on developing options for Northern Powerhouse Rail along with Transport for the North, with the next steps for the scheme set to be revealed in 2017. Plans were also confirmed for the £400 million Northern Powerhouse Investment Fund, which will invest in SMEs throughout the north and will make its first investments at the beginning of next year. Away from the transport sector, the chancellor backed the restoration of the Grade I listed Wentworth Woodhouse country house near Rotherham with £7.6 million of funding, subject to business case approval. Yorkshire and the North East are being “left behind” their Northern Powerhouse neighbours in the race to fund major projects, council leaders have warned. More than £41bn of infrastructure spending is planned in the North West over the next five years, compared to £15bn in Yorkshire and the North East. Council leaders want the Autumn Statement to tackle the imbalance. The Treasury said the figures are “not a fair reflection of the investment”. A spokesman said 550 infrastructure projects have been created in the North since 2010.
BESA has released details of a raft of new Government’s measures to help employers take on more apprentices, including £60 million to be spent on helping young people from deprived backgrounds get into work. The association says that employers with less than 50 employees will receive 100% of the cost of training apprentices aged between 16 and 18. This will also be the case if they take on 19 to 24-year-olds who were in care or 19 to 24-year-olds with an education and health care plan. The Government also confirmed that only 2% of employers will pay into the Apprenticeship Levy – those with payrolls of more than £3 million – and that the remaining 98% will receive 90% of apprenticeship training costs from May 2017. It claimed that by 2020, government spending on apprenticeships in England will be double the level they were at the start of the decade. Director of Training at the Building Engineering Services Association, Tony Howard, commented: “This is the news we have been waiting for. Employers need certainty about future funding provision so they can plan their recruitment strategies and this provides welcome reassurance.” He said the Association had lobbied for the start date to be brought forward from next May in order to start plugging the widening skills gap across the building engineering sector, however he did accept that it was now important to “get on with the job of creating the next generation of skilled workers”. Mr Howard also welcomed the fact that particular focus had been placed on STEM (Science, Technology, Engineering and Maths) apprenticeship frameworks. The funding available for these subjects has been increased to reflect their greater complexity and the need to improve quality. The government has also simplified the funding model and built in greater flexibility so employers will now have two years to access the funds in their digital training accounts.
Transport Secretary Chris Grayling has confirmed that the government is staying committed to the £50 billion High Speed 2 rail project despite the change in Downing Street occupants. HS2 was a key government scheme under former prime minister David Cameron and chancellor George Osborne, but since they have been replacement by Theresa May and Philip Hammond, uncertainty has crept into a number of policy areas, not least because the implications of the UK leaving the European Union are still not known. The many opponents of the scheme had hoped that HS2 could fall victim to budget cuts under the new regime. However, Mr Grayling has confirmed that construction work on HS2 will indeed begin in the first half of next year as planned. Grayling commented: “We need HS2 now more than ever. “We’re facing a rapidly approaching crunch-point. In the last 20 years alone, the number of people travelling on our railways has more than doubled and our rail network is the most intensively used of any in Europe. “We need HS2 for the capacity it will bring on the routes between London, the West Midlands, Crewe, Leeds and Manchester as well as the space it’ll create elsewhere on our transport network. “We need it for the boost it will give to our regional and national economies. And we need it for the jobs it will create, and for the way it will link our country together.” He also added that a decision on the HS2 Phase Two route to Manchester and Leeds will be taken before the end of this year. Last month, a number of MPs said that the HS2 rail link needs a “realistic timetable” and believe that the current schedule is “overly ambitious.” The Public Accounts Committee said “it is not convinced” that the first phase of the £56bn rail line – linking London and Birmingham – will open at the end of 2026 as planned.
Historically, the manufacturing and construction sectors have been considered as key economic indicators in the Western world. They also have a close and undeniable affinity, with residential and commercial construction representing the ultimate manufacturing process. These markets have experienced mixed fortunes in recent times, however, with manufacturing being increasingly maligned while the construction sector continues to benefit from huge investment on a national scale. So although manufacturing still accounts for 52% of the UK’s exports and employs in the region of 2.5 million people, construction has taken central stage in the private and public sector. This was reflected recently by the news that the UK government is planning to deliver a £2 billion stimulus package to the housing market, in a bid to initiate larger construction projects and optimise the number of new properties built over the course of the next 18 months. Why has the Government Made such a Pledge? In many ways, this sizeable commitment highlights the challenges facing the housing market in the UK. More specifically, a chronic housing shortage (which has helped to underpin disproportionate price growth nationwide) has forced the government to increase the pace and frequency of construction projects, in order to create an accessible and competitive market that appeals to first-time or low income buyers. Their efforts have also been accelerated by a recent committee report, which suggested that while the UK is required to build 300,000 homes each year to meet the current demand, it has not constructed more than 200,000 for more than a decade. In practical terms, the government is offering to incentivise property developers to increase the rate at which they build units, offering to purchase any that remain unsold. So rather than being conservative and adhering to the average build-out rate of 50 units per year, developers will be encouraged to construct all properties at once and list them for sale. It is hoped that this will create a swathe of affordable housing, while also empowering an ailing buy-to-let market that has created a vacuum in the rental market. The Bottom Line for the Construction Sector: Will the Stimulus Package Achieve its aims? It is easy to see the logic behind this initiative, even allowing for the slight decline in prices after the EU referendum vote. After all, it is the rising demand for property that has inspired recent growth in the residential and commercial property sectors, with market leader Bilfinger GVA recent reporting a 38% increase in operating profits in 2015. This level of demand has been compromised by the ever-increasing cost of buying and renting homes, however, forcing the government to take action and use stimulus measures to manipulate the market and make it more accessible to buyers and tenants alike. While it may be easy to comprehend the reasoning of the government and its private sector partners, the long-term viability of this initiative remains to be seen. After all, encouraging developers to increase their output beyond the build-out rate of 50 units per year will place a huge strain on them, potentially causing issues with quality and workmanship. These properties will also be incrementally smaller, posing challenges for those who want to invest in a family home. Such considerations are already associated with new-builds, which have historically drawn complaints relating to build quality and placed a far greater onus on residents to introduce the elements of comfort that make a house a home. Even when residents invest in homely features such as memory foam mattresses and luxury sofas, however, the compact nature and restricted size of new-builds makes it hard to envisage living there with a family of any size. Not only will the new stimulus package not help to resolve these issues, but it may even exacerbate them in some instances. So while it will help to ease problems relating to the availability and the accessibility of properties on the market, both private and public sector bodies must be prepared for others that emerge in their stead.
The government will take a golden share in all future nuclear new build projects to stop them from falling into undesirable foreign ownership. After a review of the Hinkley Point C deal, in which EDF sold a significant stake to China General Nuclear Corporation, the government is now planning to reform its approach to the ownership and control of all critical infrastructure “to ensure that the full implications of foreign ownership are scrutinised for the purposes of national security.” Included in this will be a review of the public interest regime in the Enterprise Act 2002 along with the introduction of a cross cutting national security requirement for continued government approval of the control and ownership of critical infrastructure. In terms of nuclear power stations, the Office for Nuclear Regulation will be directed to require notice from developers of operators of nuclear sites of any change of ownership or part-ownership. This will mean that the government can advise or direct the ONR to take action to protect national security as a result of any changing ownership. Business and energy secretary Greg Clark said: “Having thoroughly reviewed the proposal for Hinkley Point C, we will introduce a series of measures to enhance security and will ensure Hinkley cannot change hands without the Government’s agreement. Consequently, we have decided to proceed with the first new nuclear power station for a generation. “Britain needs to upgrade its supplies of energy, and we have always been clear that nuclear is an important part of ensuring our future low-carbon energy security.” For years, it has been doubtful when EDF would actually start building Hinkley in earnest, let alone complete it. But last Thursday, seven weeks after EDF’s planned go-ahead celebrations were kyboshed by a surprise government review, ministers finally gave it the green light.
As previously reported, concerns have already been raised as to the division of governmental spending between SME and larger enterprises. And while governmental figures have highlighted a marked increase in the usage of SMEs on key contracts, further woes have been raised as to the skewing of such results where subcontractor works are performed on behalf of the larger enterprises. As such, the National Audit Office has highlighted that it could not be certain as to whether there has actually been an increase in direct spending with SMEs, with the previous indirect spending figures being entirely incomparable with earlier statistics. A worrying notion, to be sure, with the NAO stressing the increased importance for more governmental focus on spending within the SME base of the supply chain. With concerns already having been raised as to the continuity of the government’s success in integrating SMEs into the supply chain more appropriately, the notion comes at a time whereby increased questions are being raised as to just how much extra is actually being spent with SMEs, both directly and indirectly. A positive sign can be seen in the increased accessibility of application for governmental works by SME practices as a bare minimum on the progress made thus far, however it is becoming increasingly evident that competing for such works and securing spending from the government may not yet be a great degree easier than has previously been seen. BIFM’s Chair of the Procurement Special Interest Group, Wendy Sutherland, commented: “The ability for SMEs to actively participate in this environment is challenging despite the best intentions of central government, as can be seen when reading the list of the successful suppliers.” Of course, as previously highlighted, the position is one whereby the government has been urged to reassess and identify further ways in which it can both engage with, and sped directly with the SME supplier base else, it is feared that targets for SME spending will not be met.
In a recent report the government has been urged to consider a more considerable approach on the procurement of services from SMEs. The report, which was produced by the National Audit Office, has highlighted growing concerns as to whether the government will be able to hit increased SME spending targets by 2020. Although, as reported by the National Audit Office, the government actually managed to reach its 2010 target of spending 25% of overall spending with smaller firms by 2015, a year earlier than the targeted end date, the report highlights concerns as to how the government will take its next step. The new target, set at 33% of overall spending,has been cited to take circa £3bn into SME businesses for central government spending alone; an ambitious target. One of the key measures which has been noted as a positive step forward is the Crown Commercial Service’s contract finder, allowing SMEs to more easily, and readily access governmental contracts worth more than £10,000. Yet, the report highlights that in certain areas of service, such as facilities management, it may still yet be too challenging for SMEs to compete for contracts against larger enterprises. With the list of successful applicants to the government contracts on the contract finder thus far highlighting a lack of success for SMEs, it is hoped that the government will assist in opening up further contracts and elements of the main contracts for subcontracting where SMEs will be able to enter the fray on a more competitive stage. As such, the National Audit Office has suggested for the Crown Commercial Service to alter its approach to procurement, by working directly with key departments to best assess where SMEs can bring the greatest amount of benefit; not solely for SME benefit, but also for the government as a whole. Additionally, suggestions have been made as to the need for oversight of key contractor to subcontractor relationships.
On 1st April 2016 the National Minimum Wage (Amendment) Regulations 2016 will come into force, introducing the national living wage. This highly anticipated change in law, announced by the Government last year, aims to help Britain’s lowest paid workers improve their standard of living, bringing direct benefits to 2.7 million workers over the age of 25. The Government also predicts that the NMW will facilitate the granting of National insurance discounts and help small employers to guarantee their workers a minimum living wage. However, the scheme has come under fire recently, with critics arguing that it is nothing more than a tweak to the minimum wage regulations. From April 1st the new minimum wages will be: Age 25 and over – 7.20ph (now called National Living Wage) Age 21 to 25 – £6.70ph Age 18 to 21 – £5.30ph People younger than 18 – £3.87ph Apprentices – £3.30ph By comparison the Living Wage Foundation (LWF) set the national living wage at £8.25 per hour nationally and at £9.40 for the London area. The Living Wage Foundation base their figures on the public perception of the minimum income required and on detailed budgets. New research every two years enables their living wage to reflect changing social norms and there is an annual update which takes into consideration inflation. Employers who pay the Living Wage Foundation’s wage to all their employees can apply for their accreditation and there are currently more than 700 accredited living wage employers in London. Perhaps the real success story of the Government’s policy is the raised awareness of what constitutes a living wage and this is reflected in the fact that last year alone, 429 employers obtained accreditation from the LWF. The Greater London Authority’s report entitled “A Fairer London: The 2015 Living Wage in London”, showed the encouraging news that 85.5% of full time workers in the capital currently earn more than £9.40 per hour, although 50% of part time workers earn less. Employers whose margins are too tight to permit them to pay the living wage, will no doubt welcome this outcome, as should their employees. Certainly, it is preferable that a company remains operative and its workers in employment than for it to be pushed to breaking point by payments it cannot afford. On the other hand, those employers who are already accredited for paying the living wage, in sectors with broader profit margins, may well continue to reap the benefits of doing so, especially with regard to employee retention. As women still make up the majority of the part-time workforce, the pay discrepancy between part-time and full-time workers is likely to be reconsidered in the future, as part of the gender pay gap work by Government. It is unlikely that the issue of pay will recede as we all try to strike a balance between preventing employee exploitation and maintaining viable businesses. By Jacqueline Kendal, Head of Employment Law, RK LLP
Towards the end of last year, the Solar Trade Association (STA) launched an emergency rescue scheme to prevent the solar industry going into turmoil. Despite the government promising a vote by 2016, STA’s “£1 solar rescue plan” remains up in the air. Within its proposal, STA promised a rise of just £1 on household annual fuel bills as of 2019, thus supporting solar businesses and the government simultaneously. The scheme was geared toward finding a way forward for the renewables industry in light of government cuts to the Feed-in-Tariff which are widely reported to have discouraged stakeholders and clients from investing in solar energy. In its place, STA submitted a four strand procedure hoped to protect business while safeguarding the cost control measures required by the government. The organisation vowed to make solar energy more attractive by setting higher initial tariffs that lead to bigger returns (8p domestic to 4p stand-alone). Under its advisement, the market would also benefit from more relaxed caps while the government would retain the power to control investment and tariff rates. It would add just £1 per year on average household energy bills from 2019 while generating enough electricity to power the equivalent of 875,000 homes. A number of MPs across all of the UK’s major political parties emerged to express support for the scheme though talks, it appears, failed to yield any real consequences. The future of the renewables sector thus remains uncertain despite the government’s increasing emphasis on sustainability. At the publication of STA’s proposed “£1 solar rescue rescue plan”, Leonie Greene, Head of External Affairs at the Solar Trade Association was keen to stress that the market was in “crisis” and that the plan was an “affordable solution”. The association suggested it would need £95m over the next three years to realise the scheme, a somewhat inflated figure compared with the government’s pledge of £7m. In view of the sector’s current struggles, STA’s warnings and failed bid for investment is a look at what could have, perhaps should have, been.
