The week that was - 9 February 2024

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

Building Magazine sets out its long-term plan for construction

To celebrate its 180th anniversary, Building magazine has published its long-term plan for construction.  The Plan sets out recommendations to the Government and the construction industry and aims to "help the built environment and the wider economy in the UK to reach their full potential". 

The headline recommendations of the report include: 

• Structural changes within Government, such as reinstating the position of chief construction adviser and simplifying building safety by introducing a single authoritative body;
• Introducing whole-life carbon regulation into the Building Regulations;
• Reforms to the planning system and its funding, and to public sector procurement;
• Attracting more people to the industry through the introduction of a long-term vocational education strategy, and through collaboratively promoting flexible routes into construction; and
• Acting to increase the output of affordable housing. 

To read the full report, please click here.

Government publishes £775 Billion infrastructure pipeline

The Government has announced in the National Infrastructure and Construction Pipeline 2023 that an estimated £775 billion will be spent on construction and infrastructure in the next decade.  This includes £164 billion of planned investment across the public and private sectors in the 2023-2024 and 2024-2025 financial years.

The energy sector is projected to receive the most investment, with £315 billion allocated to funding schemes such as Hinkley Point C, Sizewell C and nuclear decommissioning work.  The transport sector is set to receive £233 billion, which will fund commitments to expand Northern Powerhouse Rail, to resurface roads in England, and to deliver a mass-transit system in West Yorkshire. 

Having been anticipated by the construction industry throughout 2023, this publication comes following recent criticism that the Pipeline had not been included in the Autumn Statement in November.

To read more, please click here.

Barratt-Redrow merger set to propel supply chain innovation

Two major players in the construction industry, Barratt and Redrow, have announced their intention to merge.  This should allow the combined business to make £90m in cost savings.

By joining forces, Barratt and Redrow's new firm is set to become the biggest housebuilder in the UK.

David Thomas, group chief executive of Barratt, has said: “This is an exciting opportunity to bring together two highly complementary companies, creating an exceptional homebuilder in terms of quality, service and sustainability, able to build more of the high-quality homes this country needs.”

Julie Palmer, partner at Begbies Traynor, sees the deal as evidence of the current downturn in the housing market.  She noted: “Across the board, housebuilders have had to slash forecasts and cut costs but the inevitable evolution of this was always going to be more consolidation."

Click here to read more.

Gove greenlights Lendlease for £700m ITV Studios redevelopment

Michael Gove has granted full approval for Lendlease to commence the £700 million transformation of ITV Studios. This exciting redevelopment project promises to breathe new life into London's iconic television district.

The ambitious plans include state-of-the-art studio facilities, modern workspaces, and leisure amenities, setting the stage for a dynamic cultural hub. With construction set to begin imminently, anticipation is high among industry insiders and the local community alike.

Click here to read more.

Approved inspectors are to be replaced with registered building control approvers by 6 April 2024

The Building (Registered Building Control Approvers etc) (England) Regulations 2024, part of a suite of regulations coming into force on 6 April 2024, will further the Government's "more stringent regime for the design and construction of higher-risk buildings and building works". 

From April, the role of an Approved Inspector will be replaced with that of a Registered Building Control Approver (RBCA). These regulations establish the procedures that will apply when a RBCA oversees work subject to the Building Regulations. They incorporate a large number of duties currently owed under the 2010 Regulations, allowing some familiarity and an easier transition. 

Any business carrying out building control work must register to operate as a RBCA by 6 April 2024, or risk committing a criminal offence. There is an exception for "transitional" works where the business has notified a building control body of their plans before 1 October 2023 and the works are active and "sufficiently progressed".

For more information on the new regulations click here, and for a specific breakdown of the modifications to the 2010 Regulations, click here. 

Optimism in the construction industry

UK construction companies are showing a 2-year high level of optimism in the future of the construction market, with 51% expecting a rise in business. Tim Moore of S&P Global, has said that companies are "optimistic that the worst could be behind them as recession risks fade and interest rate cuts appear close on the horizon."

S&P Global produce the Purchasing Manager's Index ("PMI") - an indicator of growth and activity in the construction market. It awards each sector with a score: above 50 represents a safe growth, and below 50 is considered below a safe threshold. 

The latest figures show that construction activity is still below the safe level scores with civil engineering being the best-performer (49.8) and housing at the lowest (44.2). 

However, Tim Moore suggests that customer demand is close to turning a corner, vendor delivery times have shortened since January 2024, and sub-contractor availability is increasing at a robust pace. 

For more information see here. 

Authors for this week's edition: Sam Holloway, Sikander Azam, Chris Wilkie

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.