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DEBATE CONSTRUCTION


IN ASSOCIATION WITH:


THE PRESSURE IS BUILDING Volatile construction costs are having a major impact on Lancashire levelling-up projects and building


development across the county. We brought sector leaders to law firm Brabners’ Walton Summit offices to discuss ‘the big squeeze’ and the strain it is putting on them


Zowi Whittaker


Andrew Cross


Chris Everett


Ian Parkinson


Jennie Jones


Jess Barrow


Nick Gerrard


What kind of decisions in construction have been affected by price rises and how is that impacting ambitions?


NG: It’s a challenging time. We’ve got a £2bn growth and prosperity programme underway in Blackpool which is looking to transform the place with a vast array of projects across town centre, leisure, and the enterprise zone.


We’ve secured a huge amount of support from the government for our plans through the levelling-up agenda. All those grants are on the basis of a business case that justifies why x number of pounds is needed to support this scheme and to deliver the benefits.


Norman Tenray


The challenge is, if the environment changes, the business case doesn’t. Once the grant is announced there is absolutely no flexibility. As well as the grant there may be borrowing to support various developments. Interest rates have challenged that as well, so there is a big squeeze.


We all know about the rises in construction costs. We use frameworks for quite a lot of activity, one has recently recalibrated its rates and it has gone up 26 per cent.


Developing recent business cases, we’ve known how much we have to factor in for what might happen. With the stuff that is underway we’re doing things like value engineering, dropping


Zoe Pond


elements, using different materials. In certain projects we’ve had the advantage of fixed price contracts. That has given us security, but it puts the contractors under a huge amount of pressure.


AC: There has been a big squeeze in construction and that’s been on materials and labour. We’re finding with local authorities that the budget has been put in place and there’s been a delay over the last 12 months in decision making and projects coming live.


So, we’ve been on the back foot on many projects. We’ve priced several that have been shelved because there weren’t sufficient funds.


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