Construction Activity Slows in September

The latest Economic & Construction Market Review from Barbour ABI highlights a slowing in construction activity in September this year.

Figures from the ONS, quoted in the Review, indicate that the construction sector in the UK expanded by 2.9% in the three months to August 2018. This followed growth of 3.3% in the three months to July 2018.

These figures show that the construction industry continued to bounce back from its poor performance in the first quarter of the year. However, much like the UK economy, this consisted of growth in June and July, while output in fact declined during August. This was perhaps a warm weather boost during the first two months, while activity reduced after that.

Growth in the three months to August was driven both by new work and repair and maintenance. One of the notable increases in the period was for new infrastructure work which increased by 4.7% on the previous three month period and by 4.9% compared to the same period last year. New public housing was also strong over the period with growth of 9.5% in the three months to August compared to the previous three month period. Meanwhile new private housing output continued to post strong results. Output in new housing increased by 5% compared with the previous three month period and was 8.2% higher than the same period in 2017. Other figures to note are the strength of the non housing repair and maintenance sector, which increased by 3.8% in the three months to August, compared to the previous three months. This was 5.8% higher than the same period in 2017.

While the latest figures for construction output were positive, the longer term deterioration in the performance of construction output has led to lower forecasts for the industry in the coming years. According to the Construction Products Association (CPA) total growth in the construction industry is forecast to be -0.6% in 2018, down from 5.7% in 2017. This is largely attributable to the slowing of economic growth in Quarter 1 and the uncertain environment for business investment and specifically uncertainty surrounding Brexit. The level of growth is forecast to increase to 2.3% in 2019 with the expectation that there is more clarity on the UK’s new trading environment post-Brexit. However, given the lack of progress thus far on the Brexit talks there is significant variability implied in the forecasts.

More information on Barbour economic reports is available at


Important changes to BS 5385-1 Wall and Floor Tiling

As part of the five-year review of British Standards and reflecting changes within the tiling industry since 2009 – BS 5385 Part 1: 2018 has now been published.

One significant change made was to exclude the use of plywood as a background material for the direct fixing of ceramic wall and natural stone tiles.

Clause Other sheets and boards (see also now states:
“The use of sheets or boards that are subject to movement from changes in moisture content should be avoided. Plywood and other wood-based sheets or boards should not be used for direct tiling”.

A significant uplift in the use of tile backer boards – such as BAL Board – and a wide variation in quality of plywood available on the market has provided a solid case for the removal of plywood from the standards.

David Wilson, UK Head of Technical Services at BAL and member of the TTA Technical Committee said: “Previously it was recognised in BS5385 Part 1: 2009 that tiling direct to plywood was possible, providing this was restricted to small areas and be “installed in such a way that they provide a dimensionally stable and rigid background” the quality of plywood for tiling purposes has decreased significantly with cheaper imports flooding the market.

“While higher quality external grade plywood is still available – it is significantly more expensive.

“It is important to consider though that that wood is a hygroscopic material which means that its moisture content will change dependent upon any changes in the environmental conditions on site. Therefore, dimensionally stability of wood-based boards cannot be assured there is always a risk to installing ceramic or natural stone tiles onto plywood or other wood-based sheets,

Another technical consideration for wall tiling is weight restrictions. Plywood is deemed to have a maximum weight of tiling per m² of 30 kg compared to proprietary tile backing boards which generally are capable of supporting heavier weights per m² of tiling (As per table 3 of BS 5385-1: 2018 and the TTA Internal Ceramic Tiling to Sheets and Board Substrates document 2016).

“A competitive tile backing board market means that prices are more attractive to tile fixers and contractors. This combined with the additional features and benefits of providing background for tiling which are dimensionally stable and resistant to moisture and thermal movement. “

However, while plywood is not recommended as a background for direct wall tiling, it can still be used as a structural board when overlaid with a suitable tile backing board, particularly where installation of mechanical fixings is required e.g. for mesh backed natural stone where it is not possible to remove 75% or of the mesh backing.

 Other changes to BS standards.

Previously in internal dry wall areas it was recommended that tile adhesive should cover a minimum of 50% coverage spread evenly over the back of the tile. However, driven by necessity, with the increase in the size and types of tiles i.e. larger formats and thin ceramic panels, now available of the market, BS 5385-1: 2018 advises: “Tiles with a surface area of less than 0.1 m², but which weigh more per square metre than 70% of the background’s capacity to carry the weight, should be solidly bedded e.g. the maximum weight of tile that can be supported by Gypsum plaster = 20 kg; whereas 9 mm thick porcelain tiles, which weigh approximately 18 kg/m², weigh more than 70% of 20 kg (14 kg) therefore, they should be solidly bedded regardless of their size”

Included within the scope of BS 5385-1: 2018 are large format ceramic tiles, ceramic panels i.e. tiles with a surface area >1m² (any edge length >1200 mm) and thin tiles i.e. ceramic tiles and panels with a panel thickness of ≤ 5.5 mm. To reflect this, additional changes have also been made in the minimum recommended grout joint width, dependent on the tile/panel size, e.g. the minimum grout widths vary by tile facial area – an example as follows:

  • For tiles with a facial area of less than 0.1m² with no side > 600mm long, a minimum joint width of 2mm is required.
  • Tiles with a facial area 0.1m² to 1m² with no side>1200mm long, a minimum joint width of 3 mm is required.


  • Joints between ceramic panels should be increased pro-rata to panel size (e.g. for a 3m long ceramic panels the minimum required joint width between these panels is 5mm.

Not included in the scope of BS 5385-1: 2018 are:

  • Natural Stone Slabs i.e. stone which is more than 12mm thick,
  • Agglomerate stone,
  • Metal, plastic resin, mirror or glass tiles of a similar construction

For these products it is recommended to always refer to the manufacturer of these products for further advice.

For more information please contact BAL Technical Advisory Service on 03330 030160.

Construction industry faces post-Brexit “double whammy”

Official data shows the construction industry is highly susceptible to a potential “double whammy” fallout from Brexit.

Data from the Office for National Statistics (ONS) highlights two particular areas of concern for the UK – the ageing British construction workforce and a reliance on EU workers in the capital.

According to ONS figures 7% of the construction workforce was made up of people from the other 27 EU countries, with 3% from non-EU countries.

Although the industry average is similar to the national average of 6% EU workers and 4% non-EU workers, the industry could be set for a workforce crisis.

The ONS found a 13% increase in the number of workers aged 45 years and over in the construction industry between 1991 and 2011, but non-UK nationals are generally younger.

Indeed, just 18% of non-UK construction workers were aged 45 years and older, compared to 47% of UK nationals.

Meanwhile, in London, 28% of construction workers are EU nationals and 7% are non-EU nationals.

This compares to 13% who are EU27 nationals and 10% non-EU nationals for all other industries in London.

Manny Aparicio, national head of project management at property consultancy and surveyors, Naismiths warned the report made it clear the UK housing crisis could soon be facing a recruitment crisis of its own.

“The youngest blood in UK construction is currently the non-UK nationals but if Brexit makes the UK a less attractive place to work then that demographic could disappear at the same time as the older UK hands retire,” he said.

“It’s a double whammy. If Brexit does make it harder for overseas workers to take up jobs in construction, due to increased red tape and potential costs, the construction industry will suffer.

“Also, we have an ageing workforce of UK construction workers that is simply not being replenished at the required rate. Once a significant percentage of UK construction workers retire, and that day is fast approaching, the sector will struggle,” he said.

Aparicio also noted that the industry was seen as “far less sexy” than other sectors such as technology and this was reflected in the declining number of apprenticeships.

“Anyone in the construction sector needs to understand the potential cost increase of workers during the decade ahead. Failure to factor this in could be disastrous,” he added.


UK construction industry growth falters

The UK’s Construction sector had an underwhelming Q4 2017 with only a 2.26% growth in sales and a 2.28% rise in failed businesses, according to the Creditsafe Watchdog Report. The report tracks quarterly economic developments across construction and 11 other sectors.

The report showed that the number of high risk businesses had increased by 12.15% on the previous quarter, and the number of very low risk firms had seen a drop from 58,261 to 55,734 (4.34%). In addition, companies’ bad debt, the volume owed to the sector, had risen from £9,136,325 to £12,735,137, a 39.39% increase on Q3, despite a fall of 40.41% compared to Q4 2016. However, the number of companies affected by bad debt fell by 14.94%, meaning the average amount owed to each business in the construction sector saw 63.87% increase. Total employment rose by 14.40% from Q3 to Q4, and by 32.21% compared to the start of 2017.

Rachel Mainwaring, Operations Director at Creditsafe, commented: “Figures in today’s Creditsafe Watchdog Report show a worrying future for the Construction sector. Bad debt owed to the sector has significantly increased, which has likely impacted the number of businesses considered high risk and the higher number of failed firms in Q4.”

“These figures are disappointing, as we hoped the sector was on the road to recovery with the previous quarter’s figures indicating a step in the right direction. The construction industry is notorious for suffering with late payments and this report is evidence that more needs to be done to help this sector survive in difficult industry conditions.”


TTA seeks Carillion information

As the political furore about the collapse of the UK’s second-biggest construction company continues, suppliers and sub-contractors to Carillion have been assured that they will be paid for work carried out after the appointment of the official liquidator on 15 January.

Things look less certain for those already owed money at the time of the collapse. It was reported by The Financial Times that the company had just £29m in the bank when it went bust and some sub-contractors are owed multi-million pound sums and have had to lay off considerable numbers of staff.

The Insolvency Service has said that 90 per cent of the private sector companies currently employing Carillion on projects want the work to continue, although it has confirmed that work has paused on all Carillion construction sites, pending decisions as to how and if they will be restarted.

The TTA is a trade association member of Build UK, an industry body that represents a number of construction related trade associations and major contractor groups. Build UK is currently in discussions with the Government, providing information to support its decision making. To assist in understanding the impact of the collapse across the supply chain, the TTA is working with the CPA (Construction Products Association) and Build UK to ensure that members’ views are fed back to the Secretary of State at future meetings and discussions.

In order to inform these discussions, TTA members are invited to provide the following information – which, please be assured, will be held by the TTA in strictest confidence, and used only for the purpose of feeding back to CPA and Build UK on this issue.

What the Secretary of State would like to know is…

Q1. What % of your turnover do your contracts with Carillion account for?

Q2. Would you be willing to disclose the total value of those contracts (£m)?

Q3. What other issues have you encountered or do you expect to encounter with Carillion projects you are involved with (including what hit do you expect to take)?

Build UK believes that the Carillion debacle raises serious questions about the construction industry’s business model and it is working with the industry, its clients and investors to learn lessons and embed change through the supply chain.

There are also now questions about why the Government granted Carillion more than £1 billion in new contracts even after a profits warning in 2017. Recent developments have also reignited debate about the stability and longterm financial wisdom of  privately funded public contracts.

For the time being, the the priority of all involved is to ensure the continuity of public services while securing the best outcome for creditors. Unless told otherwise, all employees, agents and subcontractors are being asked to continue to work as normal and they will be paid for the work they do during the liquidation. Employees, customers, suppliers and other interested parties affected by the collapse of Carillion should visit or call 0800 063 9282.

Secretary of State Greg Clarke, with support from the small business minister Andrew Griffiths, is chairing a taskforce to monitor and advise on mitigating the impacts of Carillion’s liquidation on construction firms, particularly SMEs and those working in the sector. The taskforce’s attendees include representatives from leading business bodies, the construction trade sector, unions, banks and government.

Meanwhile the CITB has confirmed that in partnership with the Government and employers it is establishing a project team that will prioritise the retention and redeployment of the 1,400 apprentices employed by Carillion.

[SOURCE – TileZine]

Firms will struggle to get Carillion payments

Firms working with Carillion have been urged to ‘continue as normal’ despite a warning that they might struggle to get hold of money owed by the stricken giant.

Yesterday (15 January) six experts from accountancy firm PWC were appointed as ‘special managers’ with court-handed powers to support the liquidator of the £4 billion-turnover contracting, development and support services conglomerate.

PWC, which said it would be writing to Carillion’s suppliers shortly, added in a statement: ‘Unless advised otherwise, all agents, subcontractors and suppliers should continue to work and provide goods and services as normal, under their existing contracts, terms and conditions.

‘You will get paid for goods and services you supply from the date of the official receiver’s appointment onwards. Over the coming days we will review supplier contracts and we’ll contact you concerning these soon. Goods and services you supply during the liquidation will be paid for.’

But Construction Products Association economics director Noble Francis said there could be a bumpy road ahead for anyone already owed by Wolverhampton-based Carillion.

He said: ‘The media will understandably focus on the 20,000 Carillion employees, but an even bigger issue is likely to be the smaller firms in the supply chain, whether they are architects, sub-contractors or suppliers, as they are more reliant on cash flow and won’t get bailed out by the government.

‘The rest of the supply chain may struggle to get payment from Carillion now, particularly smaller firms. It’s difficult to measure the extent of the issue at this stage.’

David Birne, insolvency partner at accountancy firm HW Fisher & Company, said it was ‘extremely rare’ for a company Carillion’s size to opt for a liquidation – where a company’s assets are sold and it is then closed down – rather than an administration.

‘It suggests there is little, if anything, of value within the company to be saved,’ he warned. ’There will undoubtedly be a knock-on effect for companies that supply Carillion that will go all the way down the supply chain to the smallest firms.’

(SOURCE: Architects Journal)

Anti-dumping tarrifs renewed

The European Commission has decided to extend the duties levied on Chinese ceramic tile imports for a further five years to November 2022. The tariff will be at the same level as previously since 2011 (ranging between 30.6% and 69.7% depending on whether the Chinese exporters cooperated with the investigations or not.)

The review has taken more than a year and found in favour of the European ceramics industry represented by the European Ceramic Tile Manufacturers’ Federation CET. There was a focus on the continued practice of dumping by Chinese exporters, as well as the level of China’s overcapacity, equivalent to four times the EU’s entire tile output.

In view of Brexit, the UK will now have an option of whether to follow the EU tariff, or to set its own in individual discussions with China. So the industry needs good transitional arrangements in place during the process of exiting the EU, to ensure that the interests of the few remaining UK manufacturers are protected as far as possible.

TTA secures CSCS card funding

The Tile Association has secured funding from the CITB for the provision of assessor infrastructure for the wall and floor tiling sector across the UK to support quality assured assessment of experience operatives to NVQ L2.

Part funding is also available for NVQ EWPAR/OSAT training, which will help fixers obtain their CSCS cards.

Having independent NVQ assessors will help the TTA strengthen its training activities and make it easier for companies and independent fixers to access the training support they need, and the aim is that eight new NVQ assessors will be trained over the next 18 months.

This initiative will benefit the industry by promoting and supporting a skilled and qualified workforce, which will stimulate the market by providing a route to qualification for experienced operatives via on-site assessment.

The training comprises a one-day course which can be carried out at either of BAL’s Training Centres, which are located in Trentham and Bristol. Assessors can also visit customers on-site, although there would be an additional charge for this.

The training costs £500 for TTA members and £600 for non-TTA members. Both are subject to a £68 registration fee. On successful completion of the course, candidates will receive a refund of £210 of their fee. Independent fixers are entitled to claim a £100 refund if they join the TTA.

Dates for the first sessions have been agreed. These will take place at the BAL Innovation & Technology Centre in Trentham on 21 November, 28 November, 30 November, 12 December and 14 December. Anyone interested should contact Elaine Proctor at the TTA on or by telephoning 0300 365 8453.

Parties lay out their Manifesto plans for construction

Labour has vowed to create a new Department of Housing aimed at tackling the UK’s housing crisis, extend High Speed 2 to Scotland and ensure Crossrail 2 is built.

polling station

In its 128-page fully-costed general election manifesto, launched in Bradford, Labour said it would increase spending by £48.6bn a year but raise an extra £48.6bn in tax.

Among the pledges, the party said it will build at least 100,000 council homes a year and double the number of apprenticeships at NVQ level 3 by 2022.

FMB chief executive Brian Berry welcomed Labour’s joined up approach on housing and skills.

But he added: ”While Labour’s ambitious targets on housebuilding…are welcome, there is little to address the fundamental issue of industry capacity.”

Labour also vowed to invest £250bn in infrastructure over 10 years, if elected. Other costed manifesto pledges include creating a National Education Service for England to close the skills gaps, supporting UK supply chains by targeting government support where there are gaps, committing extra investment in research and by capping energy costs and investing in new publically owned energy provision.

RICS’ parliamentary affairs manager Lewis Johnston said: “This is the kind of ambition for infrastructure we have called for…and we’re glad to see it given such prominence.”

Meanwhile the Conservatives have dropped Crossrail 2 from their manifesto, while the Party has also come under fire for raising the cost of hiring foreign workers and sticking to its pledge to cut immigration to the 10s of thousands.

A report by the employer-backed Global Future says a net inward migration flow of 200,000 people a year is required to avoid the “catastrophic economic consequences” linked to Brexit.

The Global Future report says the UK’s low productivity, ageing population and shortage of labour in key areas, such as construction, show that net migration of 200,000 will be needed annually.

Meanwhile, Theresa May has pledged to build new homes to help bring the cost of buying and renting down to a more affordable level.

Other construction commitments include pushing forward with HS2, a Northern Powerhouse Rail and expansion of Heathrow Airport.

Marie-Claude Hemming, director of external affairs for the Civil Engineering Contractors Association (CECA) commented:

“Should she remain in Number 10, Theresa May must ensure that there is no major change to the anticipated pipeline of work which could unsettle the markets or deter investors.

“CECA is particularly pleased that the Conservative manifesto includes a commitment to existing strategic investments such as High Speed 2, Northern Powerhouse Rail, and expanding Heathrow Airport.

“At the same time, we believe there is scope for the Prime Minister to do more to provide clarity on major projects that are not named in the manifesto, such as Crossrail 2, the Swansea Bay Tidal Lagoon, and new nuclear power stations.

“The Prime Minister is right to be candid about the challenges facing the UK. However, if she is to deliver a strong and stable economy, she must ensure the infrastructure sector is prioritised as a primary driver of growth by providing greater clarity on these issues.”

Sarah McMonagle, director of external affairs at the Federation of Master Builders said:

“A revised house building target of 1.5 million homes from 2015 to 2022 ups the ante on housing delivery again, but these ambitions can only be delivered with an accompanying focus on creating a more diverse and innovative house building sector.

“The decline in the number and output of smaller local house builders over the past few decades has led to the industry’s capacity haemorrhaging. To deliver the PM’s vision we will need to reverse this.”

Launching their manifesto, The Liberal Democrats have committed to a £100 billion package of additional infrastructure investment. This will prioritise:

  • New direct spending on house-building to help build 300,000 homes a year by 2022.
  • A programme of installing hyper-fast, fibre optic broadband across the UK.
  • Capital investment in schools and hospitals to support capacity increases and modernisation.
  • Significant investment in road and rail infrastructure, including a continued commitment to HS2, Crossrail 2 and rail electrification.
  • Additional funding to bring more private investment into renewable energy.

Funding policy finalised for Apprenticeship Levy

The Government has published its final apprenticeship funding policy, which includes additional funding for young persons and apprentices from disadvantaged areas, and an extended period for large employers to use their apprenticeship funds.


Under the new funding policy, employers will receive £1,000 when they train young apprentices aged 16 to 18, or apprentices aged 19 to 24 who have previously been in care or who have a local authority education, health and care plan.

The increased funding is meant to offset the cost of training for this group.

The Government will also pay 100% of the training costs for apprentices from this group of young persons, where an employer is not required to pay the apprenticeship levy and has less than 50 employees.

The new funding policy allows training providers to receive a number of additional payments, including additional funding for training apprentices from disadvantaged areas in England, and higher funding bands for apprenticeship frameworks in science, technology, engineering and mathematics (STEM) fields.

Under the final funding policy, employers that pay the apprenticeship levy  will have 24 months (up from 18) to spend their apprenticeship funds and, beginning in 2018, increased flexibility to transfer a portion of apprenticeship funds to other employers.

The apprenticeship levy will be set at 0.5% of an employer’s paybill. Each employer will have an annual allowance of £15,000, which will be offset against the levy. In effect, only employers with a paybill of more than £3 million will be liable to pay the levy.

Robert Halfon, skills minister, said: “Our apprenticeship levy will boost our economic productivity, increase our skills base and give millions a leg up on the ladder of opportunity – over 90% of apprentices currently go into work or further training. Making Britain a world leader on apprenticeships is essential if we truly want a country that works for everyone.”

The changes to apprenticeship funding are the result of feedback received on an initial funding policy published in August 2016. The new system will take effect in England beginning May 2017.



Construction output falls in August

New figures have revealed the UK’s construction output decreased by 1.5% in August.

According to the latest statistics from the Office of National Statistics (ONS), all new work, and repair and maintenance fell by 1.4% and 1.5% respectively.

The largest contribution in the downwards trend came from infrastructure, which fell 5.1% in August compared to a 6.1% rise in July.

Compared to last year, infrastructure activity has fallen by 9.3%, the sixth consecutive month of year-on-year decreases.

Rod Domeney, the head of RSK Group’s Manchester office, said it is evident Brexit is “still having a degree of impact” due to the likelihood projects and investments are on hold because of uncertainty surrounding the UK’s decision to leave the European Union.

“What the industry is really looking for is a sign of the Government’s clear commitment to the Northern Powerhouse, on which there have been mixed messages recently,” he said.

“A commitment to projects like HS2 and HS3 would spark renewed investment in the region, having a real impact on the construction sector and the wider economy.”

Michael Thirkettle, Chief Executive of industry consultants McBains Cooper, added the real concerns lies with what a ‘hard brexit’ will do to the UK construction industry’s labour supply.

“Because of skills shortages in the UK, skilled EU trades are a vital source that will be cut off once we leave the EU,” he said.

“Demonising skilled migrant workers and imposing regressive immigration policies will demolish any hopes of meeting housebuilding targets and solving the housing crisis.  The Government should send a signal that migrants will be welcome in the industry, and add skilled construction workers to its Shortage Occupations List.”



Job cuts would be “first nail in coffin” for construction

Cutting thousands of construction and housebuilding jobs would be the ‘first nail in the coffin’ for the industry, according to One Way.

Construction on the rise

An analysis by the construction and rail recruitment specialist outlined that a further loss of jobs would prove critical for the construction sector.

 This comes at a time when the National Housing Federation has said any slowdown in housebuilding would result in the loss of nearly 120,000 construction jobs over the next decade.

The UK’s construction sector has also slipped into recession for the first time in four years, with many commentators suggesting the industry is in turmoil and that the government must do more to support housebuilding.

Paul Payne, Managing Director of One Way, agrees: “The news that the construction industry has slipped back into recession after four years isn’t particularly optimistic and a loss of jobs on the scale that has been suggested would almost certainly be the first nail in the coffin for the sector.

“We simply can’t afford to lose any more professionals from both construction and housebuilding and the government needs to do considerably more to support these industries before it’s too late.”

“We all saw the potential impact of job losses in the steel industry and the scale of this for construction would be far greater. We need more professionals operating in the sector if we want it to recover, not less, and the potential impact of these cuts could be devastating if something isn’t done soon.

“We’ve been very vocal about how the government, employers and trade bodies need to do more to engage with youngsters and promote greater interest in construction, because at the current rate there will barely be an industry left in a few years’ time.

“Confidence is the only way to get through this difficult period and we need more investment and more projects to be given the green light. If we take a step back and allow programmes to be put on hold and jobs to be cut it could have a hugely damaging effect on the economy and on thousands of peoples’ lives. As Winston Churchill once said, ‘If you’re going through hell, keep going.’”


Construction industry reacts to Budget 2016

When George Osborne, delivered his Budget for 2016, he described it as a “budget for small businesses” and promised the government would adhere to its “long term economic plan”.

Whilst Mr Osborne didn’t deliver any real surprises for business and the construction industry, the big measures took the shape of a reduction in business rates that will see 250,000 will see their rates reduced from April next year and 600,000 small companies will pay no rates at all.

The threshold for small business rate relief will be permanently increased from £6,000 to a maximum of £15,000 and higher rate relief will rise from £18,000 to £51,000.

The Chancellor also announced major new commitments to infrastructure projects by giving the go ahead to the HS3 rail scheme between Manchester and Leeds, the widening of the M62 and improved road links in the North Pennines, as he promised to make the Northern Powerhouse a “reality”.

Carolyn Fairbairn, Director-general, CBI welcomed the news: “After a year of surprises, this was a stable Budget for business facing global stormy waters. The Chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.

“Businesses will welcome the Chancellor’s permanent reforms to business rates – taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI, which the CBI has long been calling for. The reduction in the headline Corporation Tax rate sends out a strong signal that the UK is open for global business investment.”

Mike Cherry, Policy Director at the Federation of Small Businesses, commented: “The chancellor has listened to our calls for the tax system to be made simpler for small businesses and the self-employed and taken important action on business rates.”

Peter Vinden, Managing Director of The Vinden Partnership – a leading multi-disciplinary consultant company to the built environment – said: “The Chancellor has talked of uncertain economic times ahead and it would seem that with this budget he doesn’t intend on rocking the boat too much. We certainly didn’t see the kind of surprises the Chancellor has sprung on us in the past.
“Small businesses will welcome the changes to business rates and the government’s commitment to major investment in infrastructure projects will go some way to easing some of the jitters that the construction industry has been suffering recently.

“Finding people to work on these projects will remain a challenge, however, as the big push on apprenticeships will obviously take time to deliver the key skills needed.”

Patricia Moore, UK Head of Infrastructure for Turner & Townsend, expressed “relief” that the Chancellor was prioritising infrastructure. She said: “Future spending on transport projects such as HS3, a new tunnel between Manchester and Sheffield, and upgrades to the M62 and main A66 and A69 roads, will all help stimulate and reinvigorate the economy in the North providing a much-needed boost to jobs and trade.

“This budget is a clear sign that George Osborne means business for the Northern Powerhouse. For far too long, people living and working in the North have played second fiddle to the South, suffering from unacceptable travel delays particularly on the M62, which costs time and money. This long-term investment in vital infrastructure is clear recognition that we need to catch up with continental Europe and be globally competitive.

Mark Perkins, Managing Director at Ses Engineering Services commented: “We welcome the large scale infrastructure improvements announced by the Chancellor today including a £140m plus investment into Crossrail 2 and High Speed 3 along with proposals for a TransPennine tunnel linking Manchester and Sheffield.

“As a UK-wide business, enhanced regional connectivity is key and this major initiative should be the foundation of real economic growth and development in the north; something our sector will be a key enabler of.”

(SOURCE: UK Construction Online)

House building pushes UK construction sector growth to seven-month high

The fastest rise in residential house building for 12 months has pushed growth in the UK construction sector to a seven-month high.

The Markit/CIPS UK Construction Purchasing Managers’ Index hit 59.9 in September, up on 57.3 in August, and against a no-change reading of 50.House building was the best performing category, which some survey respondents attributed to the launch of projects that had been delayed earlier in 2015, while both the commercial and civil engineering categories expanded.

However, the increase in new work was the slowest for five months, though construction companies remained upbeat about their prospects for the next year.

Subcontractor charges continued to rise sharply, though the rate of inflation eased slightly from the record highs earlier in the year.

There was the least marked deterioration in supplier performance for almost five years, which some firms linked to greater stocks at vendors, and the rate of input price inflation eased to a five-month low.

David Noble, group CEO, CIPS, said: “Issues around skills shortages continued to be a drag on the sector with the resultant demand for higher salaries from the smaller pool of skilled staff. Companies reported higher staffing levels but it was a continuing challenge to find specialist skills as they struggled to rely less on subcontractors to fill the gaps.

“Lower fuel and raw material costs helped margins even in a landscape of strong competition. Levels of output were robust and increased at the fastest pace for over six months.”

Tim Moore, senior economist at Markit, said: “While the latest survey provides positive news on construction output, jobs and supply chains, there was a warning light flashing in terms of total new orders. Construction companies have recorded a steady slowdown in new business growth from June’s post-election peak and the latest upturn was the second slowest since mid 2013.”


For exclusive content and business tools, including our Find an Apprentice Tool, register for MyBAL today.

Think-tank calls for £500m FE funding boost

A think-tank report funded by the construction industry is calling for the government to shift £500m of funding from universities to further education colleges to promote technical education.

The authors recommend that further education get the same treatment as higher education, with the same student loan regime.

The report – Higher, Further, Faster, More: Improving higher level professional and technical education  – is written by Policy Exchange and funded by the Construction Industry Training Board (CITB) and Wates Construction.

It says that funding for higher education institutions (universities) has increased markedly since the introduction of tuition fees, with a rise in overall income of 26% since 2009/10. As a result, universities are sitting on £12.3bn of unrestricted reserves – worth around 48% of the entire annual budget for the HE sector. By contrast, further education colleges have seen a significant drop in their revenue, with the adult skills budget having been cut by 24% since 2009-10. According to the National Audit Office, more than one in four of the entire FE college network could go bankrupt within a year.

The report calls for the Department for Business, Innovation & Skills (BIS) to redirect up to £532m of the Higher Education Funding Council (HEFCE) grant to improve the quality of higher level technical qualification on offer at FE colleges, national colleges and institutes of technology. Any remaining grant funding should be directed towards universities with the smallest financial reserves.

The report also proposes an expansion of the university student loan system, as well as the introduction of maintenance support, to FE students. This would mean that for the first time all young people will have equal access to finance to support further study, whether they choose a university or a high quality technical pathway

Other recommendations include:

•          The ability for the new institutes of technology, announced in the government’s recent productivity plan, to award their own technical degrees rather than have to partner with a university

•          The expansion of industrial partnership bodies – groups of employers in specific sectors – to be the main route to design and approve all new technical qualifications, including higher level apprenticeships

Jonathan Simons, head of education at Policy Exchange, said: “The UK is home to world beating universities that we should all be proud of. But as well as degrees, we also need many more people with high class technical and professional skills – and that means a flourishing further education system. It is clear that higher education is significantly better funded than its further education counterpart. Universities have substantial cash reserves which could be much better utilised than sitting in banks. That is why we think a proportion of the government grant to universities should be reallocated towards offering more students higher level technical qualifications at further education institutions, and why the student loan system should be expanded so that young people have access to finance to support their higher level study whichever route they choose.”

CITB policy director Steve Radley said: “This report offers a radical rethink of the way education funding is allocated. The UK lags behind the rest of the world in terms of how many of us undertake vocational education after secondary school. Just 10% of 25-40 year olds in the UK have a post-secondary vocational qualification, which pales in comparison to the US where 22% of the labour force has similar qualifications. Industry needs a reformed FE sector to provide the skills needed for productivity and growth. It is vital that we find the most effective way for FE to deliver this.”

Wates strategy director Steve Beechey said: “Without substantial investment many of the FE colleges will, and in some cases already are, failing to offer the education that the construction industry requires in order to continue to thrive and support the UK economy.  We need to invest in people and training to ensure the future labour pool, without doing so, we run the risk of derailing our countries recovery and future success.”


If you’re interested in becoming a tiler or developing your skills, visit our Training Page.