One way or another

With the first signs of spring starting to appear, the construction industry will be looking ahead to warmer and more productive months off the back of a challenging winter period. ?

The number of new projects breaking ground has fallen by almost half in the past three months, according to new research from Glenigan. The drop in work commencing was particularly large for projects worth ￡100m or more, which fell by almost two-thirds, with sustained external pressures including rising interest rates, material prices and energy costs cited as the primary reasons. And while there are indications that inflation rate may be much closer to the Bank of England’s target by the autumn, industry forecasts have warned of further price hikes before then.

For many developers and contractors, public sector investment will be crucial in providing confidence around the industry’s pipeline of work over the next 12 months. News this week that public sector borrowing is significantly less than predicted by the Office for Budget Responsibility presents a slighter rosier picture given the current climate. However, reports that the Department for Levelling Up, Housing and Communities has had its capital spending powers put on hold will concern firms who are looking to support local authorities’ regeneration plans.

At SCAPE, I am continuing to have conversations with our partners and public sector colleagues about how they can maximise their budgets this year to ensure their regeneration projects – and the social value these projects deliver – are not compromised by the external pressures councils continue to face. Targeting existing sources of government funding is an avenue they should look to explore.

Last month, over 100 projects were awarded a share of ￡2.1 billion from the second round of the government’s Levelling Up Fund to help boost local economies and enrich the lives of people within those communities.

Sherwood Observatory is one such project. Procured through our Beyond the Public Sector Framework for?construction, the project received a ￡3.1million contribution that will enable the science discovery centre, planetarium and?STEM?education centre to be built.

The observatory will turn a disused underground Victorian reservoir into a state-of-the-art tourist attraction, with the potential to attract at least 20,000 visitors a year. Our partner?G F Tomlinson?is currently supporting the Sherwood Observatory.

As the Sherwood Observatory project shows, the Levelling Up Fund is one of a number of ways to secure funding at a time when public spending is contracting. But successful bid places are limited, and local authorities need to be efficient in their applications – in many cases, working with contractors and partners to develop a business case that is both ambitious and achievable.

For those successful bids, the clock is already ticking. Local authorities have until just March 2025 to complete their winning projects, so those of scale will need to start in earnest. The design, planning and delivery stages should be worked through as quickly as possible and it’s vital to mobilise a team that can help achieve this as quickly as possible.

This is where direct-awards framework can inject speed, confidence and certainty. By reducing the time spent on the procurement process, local authorities can engage early with a delivery team comprised of the very best talent that the industry has to offer that will get to work immediately.

As local government representatives, compliance, taxpayer value, sustainable delivery and local economic impact are just as important to us as time, cost and quality. All of these measures sit at the heart of all of our frameworks to ensure that projects are delivered to the highest possible standard.

As we start to see the early parts of 2023 take shape, there’s a fine balance to be struck between the UK’s commitments to levelling up and regeneration, and the government’s immediate priority to get inflation under control.?