Former Clancy chief Commercial Officer to lead Government Infrastructure Delivery

Former Clancy chief commercial officer Jon Loveday has been appointed new Director of Infrastructure, Enterprise and Growth at the Infrastructure and Projects Authority (IPA).
He will oversee project delivery on major projects like HS2 and Northern Powerhouse Rail.

Loveday’s previous role was at Clancy where he led a tw0-year turnaround project to create a new strategy and operating model.

He will start his new government job next month leading the team that supports the delivery of government’s major projects by “helping to set them up for success and building delivery capability in departments”.

Nick Smallwood, IPA Chief Executive and Head of the Project Delivery Function, said: “We must consistently deliver our major projects successfully to help rebuild our economy and transform our infrastructure.

“I’m pleased to welcome Jon to the IPA, who brings with him a wealth of experience from the infrastructure sector. I’m sure Jon will play a major role as we move forward supporting the government’s ambitious agenda.”

Loveday said: “I am delighted to be joining the IPA at such an important time. Our ability to deliver world leading infrastructure is at the heart of the UK government’s planned infrastructure revolution and we have a lead role to play in kick starting the economy.”

£3bn green boost as construction leads Covid recovery

Chancellor Rishi Sunak continued to put construction at the heart of the coronavirus recovery with a £3bn green investment package to support around 140,000 jobs.

A £1 billion programme will improve the energy efficiency of public sector buildings while £2bn will go towards Green Homes Grants for homeowners and landlords to insulate properties.

Sunak also raised the Stamp Duty threshold on house sales to £500,000 from £125,000 until next March to boost the housing market.

He said: “One of the most important sectors for job creation is housing.

“The construction sector adds £39 billion a year to the UK economy.

“House building alone supports nearly three quarter of a million jobs, with millions more relying on the availability of housing to find work.

“But property transactions fell by 50% in May. House prices have fallen for the first time in eight years.

“And uncertainty abounds in the market – a market we need to be thriving.

“We need people feeling confident – confident to buy, sell, renovate, move and improve.

“That will drive growth. That will create jobs.

“So to catalyse the housing market and boost confidence, I have decided today to cut stamp duty.”

Construction Products Association’s Economics Director, Professor Noble Francis said: “The £2 billion funding towards energy-efficient retrofit of the existing housing stock is potentially very promising; but the devil is in the detail, as government has previously demonstrated on energy-efficient retrofit programmes, in particular given the very poor experience of the Green Deal policy.

“In addition, £1 billion for insulating public buildings sounds very good but given this is only for one year, it raises the key question of whether government departments and local authorities have the time or resource to spend this effectively.

“The main risks are that the majority of this money ends up not getting used or that it gets wasted in a rush to spend it. ”

Matthew Pratt, Chief Executive at Redrow, said: “We welcome today’s stamp duty holiday as a positive step to stimulate the housing market and wider economy.

“The measures will have a much-needed domino effect, also supporting suppliers, subcontractors and consultants to the house building industry.”

More sites to restart as 73% of big jobs back

Major contractors are now working on 73% of sites as the government renewed its call for construction to restart across the country.

An update from trade body Build UK yesterday revealed the number of operational sites for its contractor members – up from 69% last week.

Build UK’s membership includes most of the industry’s biggest names like Balfour Beatty, Laing O’Rourke, Kier, McAlpine, Skanska, Bouygues, Bam, Vinci, Wates, Mace and Morgan Sindall.

Over 80% of member’s infrastructure and construction sites are now running with 55% of housing jobs working.

The latest numbers came as Secretary of State for Housing, Communities and Local Government Robert Jenrick restated the government’s position on construction as one of the sectors leading the economy out of lockdown.

He said: “We want infrastructure and construction work to begin again wherever it is safe to do so.

“We cannot, and will not, let this pandemic halt our work to improve connectivity, to provide vital social and cultural infrastructure and to boost economic growth across the regions.

“That’s is how we will begin to rebuild and recover from this national emergency.”

Build UK also reported that productivity is improving on reopened sites.

Productivity on infrastructure and construction sites is averaging 71%, up from 67% last week.

But sites in London remain a challenge although output has improved from 56% to 63% in the last week.

Article courtesy of ‘Construction Enquirer’

IR35 legislation deferred until 2021

The government has postponed the introduction of the planned changes to the controversial IR35 legislation, which implements heavier tax burdens on freelancers and the self-employed. The new rules will now come into force on 6 April 2021, as opposed to the same date in 2020.

Speaking to the House of Commons on the evening of 17 March, chief secretary to the Treasury Steve Barclay (pictured) said: “The government is postponing the reforms to the off-payroll working rules, IR35, from 6 April 2020 to 6 April 2021.”

Addressing the Commons, Barclay said the suspension is in response to the ongoing spread of Covid19 to help businesses and individuals. He said: “This is a deferral, not a cancellation, and the government remains committed to reintroducing this policy to ensure people working like employees but through their own limited company, pay broadly the same tax as those employed directly,” he added.

Andy Chamberlain, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE) said the government has done “the sensible thing” by delaying the changes to IR35 in the private sector.

In a statement released late Tuesday evening, Chamberlain said: “These changes have already undermined the incomes of many self-employed businesses across the UK. However, they would have done even more serious damage if they had gone ahead as planned.

“It is right and responsible to delay the changes to IR35 for at least a year during the coronavirus [Covid19] crisis, to reduce the strain and income loss for self-employed businesses.

However, Chamberlain has reaffirmed that more needs to be done to support self-employed businesses and has called for an emergency Income Protection Fund. He said: “This is a sensible step to limit the damage to self-employed businesses in this grave and unprecedented situation, but we also urge the government to do more. It must create an emergency Income Protection Fund to keep the UK’s crucial self-employed businesses afloat.”

Nuttall and Ferrovial to replace Carillion on HS2 work

BAM Nuttall and Ferrovial Agroman have been drafted in to strengthen the Kier and Eiffage joint venture preparing to start work on two civils packages worth nearly £2.5bn in the first phase of HS2.

C2 and C3 contracts will cover an 80km stretch of the central HS2 section
C2 and C3 contracts will cover an 80km stretch of the central HS2 section

The two firms will replace Carillion, which was the third partner in the original consortium to secure C2 and C3 contracts in the central section of the project.

Lot C2 will see the construction of the north portal Chiltern tunnels to Brackley, while Lot C3 is for the Brackley to Long Itchington Wood Green tunnel south portal.

Since the two contracts were let the combined value has soared from £1.34bn to £2.48bn.

The new team of contractors will deliver an 80km stretch of HS2 through the countryside, from Wendover in the Chilterns to Leamington Spa.

The route includes 42 km of cuttings up to 30m deep and 27 km of embankments up to 13m high. The firms will also build 70 over-bridges, 15 viaducts, 15 under-bridges and three Green Tunnels with a total length of about 6.5km.

Bam Nuttall and Ferrovial were previously part of the Fusion consortium with Morgan Sindall, which unsuccessfully bid for the northern and southern sections of HS2 phase one.

HS2 avoided going out to public tender again, because EU procurement rules allow for replacement to be appointed in the event of insolvency.

Chiefs at HS2 also argued that re-procurement would also be unfair to surviving partners Kier and Eiffage.

Skanska rail and highways maintenance for sale

Skanska is pulling out of the rail, highways and lighting maintenance markets to concentrate on core building and infrastructure construction.

It has now begun the process of marketing its infrastructure services operations to potential buyers.

Skanska said it would only consider bids that protect contract delivery and teams.

Gregor Craig, president and CEO of Skanska UK, said: “We have a strong platform for the future as a result of our financial resilience, selective work winning and disciplined management.

“We have decided to streamline our UK operations to focus more on our core infrastructure and building markets and create greater alignment between Skanska’s UK activities and its approach in global markets.”

Skanska said it would remain fully committed to the delivery of all current contracts throughout the sale process, and would do all it could to minimise any impact and ensure a seamless transition once a buyer is identified.

 

It is the second time the UK arm of the Swedish construction giant has sought to sell part of its business.

Nearly two years ago piling arm Skanska Cementation was marketed with a price tag north of £50m. But after failing to agree on a price with prospective buyer concrete contractor Morrisroe, the foundation firm was retained.

The government has launched a review of freelance tax rule changes due to come into force in April

Looming changes to IR35 rules are causing widespread concern in construction.

HMRC rules are due to change from April 6 making contractors liable for determining the tax status of off-payroll professionals.

Major contractors have been auditing freelancers employed via personal service companies as thousands of professionals are braced for a move back to PAYE.

The government is now calling for evidence from affected individuals and businesses to ensure “smooth implementation of the reforms.”

Financial Secretary to the Treasury Jesse Norman said: “We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules.

“The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.”

Current rules allow workers to be employed via a personal service company (PSC) which determines whether IR35 tax rules should apply.

That responsibility is due to shift from April to contractors who will determine employment status.

Freelance workers fear they will lose out through higher tax payments while contractors will also face bigger bills from direct employment.

The government is also reviewing its Check Employment Status for Tax (CEST) online tool which has attracted widespread criticism.

Chancellor Pledges Review of IR35 Changes

Chancellor Sajid Javid is promising to review looming freelance tax rule changes which are causing widespread concern in construction.

HMRC IR35 rules are due to change next April making contractors liable for determining the tax status of off-payroll professionals.

Major contractors have been auditing freelancers employed via personal service companies as thousands of professionals are braced for a move back to PAYE.

But Javid told the BBC Radio 4’s Money Box programme “We’ve already said that we’re on the side of self-employed people.

‘We will be having a review and I think it makes sense to include IR35 in that review.”

Current rules allow workers to be employed via a personal service company (PSC) which determines whether IR35 tax rules should apply.

That responsibility is due to shift from April to contractors who will determine employment status.

Freelance workers fear they will lose out through higher tax payments while contractors will also face bigger bills from direct employment.

One industry expert said: “They are desperate for any vote they can get so alienating a million freelancers is not a good idea.”

HS2 review ‘could axe part of northern route’

HS2-High-Speed-2-train-track-design-CGI-_660-620x330.jpg

The northern leg of HS2 could be scaled back, it has been reported.

The Financial Times said that the Oakervee review is examining the possibility of axing phase 2b of the route from the East Midlands to Leeds and Sheffield.

The review is assessing factors including whether the project should continue, what its cost will be and the route it should take.

Leeds City Council leader Judith Blake said: “There will be grave long-term consequences for the economy of the north and east of the UK if the eastern leg of HS2 isn’t delivered in full.”

The FT also reported that the panel is also looking at cutting the speed of the trains by 40mph in an attempt to save £10bn, and looking at starting the line at Old Oak Common rather than Euston.

Labour peer and former head of the National Infrastructure Commission Lord Andrew Adonis said he would try to ask about the reported change in the House of Lords this afternoon.

He said: “I’m hoping to ask in the House of Lords today about the front page suggesting that the eastern leg of HS2 to Leeds, Sheffield, Nottingham & Derby might be cancelled. This is a really terrible idea even by Johnson’s standards.”

A report by Midlands Connect last month said that 73 stations, including 54 with no direct HS2 service, are set to benefit from the project if it is completed in full.

At the time, Sir John Peace said: “It is the capacity released by the line, not just its speed, that will give the whole network a desperately needed overhaul.”

HS2 confirmed last week that it has halted the felling of 11 ancient woodland sites until the Oakervee-led review has concluded.

The panel is expected to conclude its report later this month.

A spokesperson for the Department for Transport said: “We are not going to pre-empt or prejudice this work with a running commentary on the review’s progress.”

HS2 has been contacted for comment.