backwards & forwards
Karen Fletcher reviews the news of 2018 and considers what might be heading our way in 2019 and beyond.
The ancient curse ‘may you live in interesting times’ has never been truer for the construction sector. Brexit, a Construction Sector Deal, the collapse of Carillion, and calls to shift to modern modular methods – all of these have made the past year very interesting indeed.
Our review of the year is therefore intended to be a patch of calm water as we head towards the end of 2018. It’s a look back at some of the main news stories and features that have been included in the pages of MBS, with some of the other main stories * in the news, to give some perspective on our hectic times and set them in the context of wider events; some rather unsettled weather; not to mention a couple of earthquakes.
The Construction Sector Deal takes shape, announced by Greg Clark MP (pictured) with government committing over £400 millions of investment from the public and private sectors. In return, government expects construction to deliver efficient and effective buildings in half the time and with a 33% reduction in costs. In the same month, CIBSE launches a new HVAC Group, which is open to all, including non-members, with the intention of sharing best practice. The ECA notes that take-up of its ECS registered electrician card has started to ramp up.
2–4 January Storm Eleanor causes widespread disruption across the UK, with flooding and gusts of wind reaching 100 mph.
8 January Theresa May announces a Cabinet reshuffle.
15 January Carillion, the UK’s second-largest construction company, goes into liquidation with debts of £1.5 billion.
Following the collapse of Carillion, the impact on sub-contractors is really hitting home. Around £75 millions are owed to around 80 engineering services firms who have been providing works such as electrical, plumbing, gas, fire safety, security and HVAC installation. Accountants PWC warn that it’s unlikely they will see that money. BESA and ECA predict that losses will probably amount to a lot more. The news gives more momentum to the campaign to change the law on retentions – the Aldous Bill (Peter Aldous MP with BESA’s David Frise pictured outside Number 10).
17 February An earthquake of magnitude 4.4 and depth of 7.4 km hits South Wales, the biggest in the UK since the 2008 Lincolnshire earthquake. The effects are felt as far away as Liverpool, Birmingham and Cornwall.
27 February – 4 March Heavy snow causes disruption across much of the UK. The Met Office issues the first ever red snow warning for Scotland, South-West England and South Wales, because the weather poses a potential risk to life. The Army helps rescue hundreds of stranded motorists
28 February Toys “R” Us, goes into administration with a £15,000,000 VAT bill it is unable to pay. On the same day, electronics retailer, Maplin, goes into administration after talks with potential buyers fail to secure a sale.
And on the same day An earthquake of magnitude 3.2 and depth of 4 km hits Mosser, Cumbria. It was felt in Grasmere, Kendal, Cockermouth and Keswick.
The focus this month is on the imminent introduction of Minimum Energy Efficiency Standards (MEES) and their potential impact on commercial property values. Energy consultants predict that over £100 billions in commercial property are at risk of being unlettable due to low EPC ratings. The London Energy Transformation Initiative (LETI - pictured at work), an independent group of engineers, architects, contractors and FMs, say that London needs to set tougher targets for a faster move to low carbon buildings.
4 March Former Russian double agent Sergei Skripal and daughter Yulia are poisoned with an unidentified nerve agent in Salisbury.
7 March Carbon emissions in the UK fall to the level last seen in 1890.
14 March Stephen Hawking dies at his home in Cambridge, aged 76.
17–19 March Heavy snow affects much of the UK.
David Frise is appointed chief executive of BESA and says that he is determined to raise the profile of engineers in the sector. The Federation of Environmental Trade Associations (FETA) warns that mishandling of refrigerants in air conditioning is becoming a problem, reporting instances of R410A being removed from systems and simply replaced with R32. With the advent of MEES, some are saying that EPCs are not a good indicator of building performance – though not all agree, saying that EPCs are a useful and understandable measure.
1 April All privately rented properties in England and Wales are required to have a minimum energy performance rating of “E”
11 April A £70,000,000 plan to extend Birmingham’s Alexander Stadium is announced for the 2022 Commonwealth Games and confirmed by Theresa May on a visit to the city.
18 April Theresa May suffers two defeats in the House of Lords on her flagship Brexit legislation.
19 April The UK experiences its hottest day in April since 1949, with temperatures of 28.5 °C recorded in Central London.
Over 100 MPs now support the Aldous Bill to change the law on retentions practice in construction. Chancellor Philip Hammond vows to crack down on ‘the continuing scourge of late payments.” The MBS round table panel highlights the growing importance of wellbeing in buildings but says that legislation would be required to drive it into practice. At the FETA annual lunch, the Federation’s chairman John Smith (pictured) predicts challenging times ahead for the industry, particularly regarding how EU regulations in areas such as refrigerants will be carried into the UK after Brexit.
2 May Cambridge Analytica files for bankruptcy, following a data privacy scandal.
7 May The UK experiences its hottest early May bank holiday (since its introduction in 1978) with a temperature of 28.7 °C
11 May Theresa May agrees to appoint a panel to help oversee the Grenfell fire inquiry, following pressure from campaigners.
There are harsh words for the industry from the Hackitt Review of the Grenfell Tower fire: “Ignorant, indifferent, inadequate” are terms that appear in Dame Judith Hackitt’s report. The biggest impact of the report is that it exposes the worst aspects of a cost-first culture. David Frise says the report: “Spotted right at the start that it was not the building regulations themselves but how they were applied and enforced that allowed a culture to develop which led to the Grenfell tragedy.”
1 June The Met Office confirms that May 2018 was the warmest May since records began in 1910 and was also likely to be the sunniest since 1929.
5 June The government approves a controversial plan for a third runway at Heathrow Airport.
15th June The Macintosh building at the Glasgow School of Art is gutted by fire, four years after part of the same building was destroyed by fire.
24 June A series of record-breaking wildfires begin burning across the United Kingdom.
The Aldous Bill 2nd Reading is shifted back to October – as government concentrates on managing Brexit. But at this point, a quarter of all MPs and half-a-million businesses support the Bill, as well as the Association of Accounting Technicians (AAT) and British Chambers of Commerce. An updated Renewable Heat Incentive (RHI) scheme focuses on Metering and Monitoring Service Packages (MMSPs). The British Council for Offices (BCO) provides guidance on wellness in buildings which will be included in its 2019 updated BCO Guide to Specification. BSRIA’s chief executive Julia Evans is awarded an OBE in the Queen’s Birthday Honours.
3 July England’s World Cup penalty shootout win over Colombia is watched by 23.6 million viewers.
6 July Theresa May secures approval from the cabinet to negotiate a soft Brexit.
23 July In the heatwave, the Met Office urges people to “stay out of the sun” and issues a level 3 amber alert for the east and southeast of England. The hottest day of the year is recorded in Santon Downham in Suffolk, reaching 33.3 °C.
The Construction Sector Deal is finalised. Along with an offer of public and private sector funding, government is demanding that the construction industry embraces new technology to deliver cheaper, better buildings much faster. Training is a key part of the Deal, and the ageing sector workforce is highlighted as reducing access to skilled professionals. The Heat Pump Association (HPA) welcomed new data from government on emission conversion factors for electricity – reflecting a greater use of renewables for generation. Vodafone and Dell team up with Utilitywise to deliver IoT-based energy management services. (Utilitywise managing director Brin Sheridan pictured)
10 August Sports Direct owner Mike Ashley steps in to buy department store House of Fraser for £90m, after the chain calls in administrators.
23 August The government publishes the first in a series of guidelines for businesses and the public on how to prepare in the event of a “no deal” Brexit scenario
31 August Transport officials announce that the opening of London’s £15bn Crossrail line – Europe’s largest infrastructure project – will be delayed by nine months “to ensure a safe and reliable railway”.
The House of Lords Science and Technology Committee launches a report that says ‘outdated and unsustainable’ construction must change. Adoption of offsite, modular methods are vital to the future of the industry, says the Committee. The draft London Plan includes a requirement for buildings to report on long-term energy performance. FETA warns again that post-Brexit rules on F-Gas must not be overlooked. There are now 10,000 ECS Registered Electricians. The Competition and Markets Authority recommends regulation of the heat network market – a move welcomed by the industry’s own Heat Network Taskforce.
1 September As part of the phase-out of incandescent light bulbs, it becomes illegal to import non-directional halogen light bulbs into the United Kingdom.
2 September A huge fire destroys part of the Littlewoods Pools building, one of the most famous landmarks in Liverpool.
6 September The 659-megawatt Walney Extension, the world’s largest offshore wind farm, opens off the coast of Cumbria.
21 September Theresa May demands new proposals from the EU to break the “impasse” after her Chequers plan was rejected by EU leaders
BESA president Tim Hopkinson (pictured) predicts that the industry will transform over the next five years, with greater use of technology and a new image for the sector. NG Bailey creates a new division for IT and power services. SPIE UK secures am £8 million M&E framework agreement with Gatwick Airport over four years. BESA, SELECT and SNIPEF form BSE Skills to oversee vocational training in the electrical, plumbing and HVAC sectors.
13 October Storm Callum: Parts of Wales experience their worst flooding in 30 years.
18 October Theresa May suggests the post-Brexit transition period could be extended, after a summit of EU leaders in Brussels failed to make decisive progress
19th October Facebook hires former deputy prime minister Sir Nick Clegg as head of its global affairs and communications team.
29 October Chancellor Philip Hammond says the era of austerity “is finally coming to an end” as he delivers his third budget
Claire Perry MP (pictured) highlights the Heat Network Investment Project. Thirteen companies in the sector join forces to form the Heat Network Industry Council, which is led by the Association for Decentralised Energy (ADE). GE controls arm Current is working with Vodafone on delivering smart controls that also help to manage staff productivity. BESA welcomes a boost to the Apprenticeship Levy that now allows larger firms to allocate 25% of their funds to smaller sub-contractors.
6 November Renewable energy capacity overtakes that of fossil fuels in the UK for the first time, at 41.9 gigawatts. *
You can search the MBS archive from our website. Our other stories are taken from Wikipedia’s summary of top news items for 2018. See link below.
The biggest impact on UK building services in 2019 will be Brexit. The MBS annual survey recorded it as the key reason businesses have held back from investment. And at the BESA Annual Conference, delegates agreed that uncertainty over Brexit was holding back growth. We have also seen that while Parliament dealt with the process of taking the UK out of the EU, other legislation has taken a back seat, the proposed Aldous Bill on retentions included.
What the exact outcomes will be is anyone’s guess at this stage, so MBS isn’t going to make one. However, in other areas of building services, MBS is prepared to make some predictions about where we might find ourselves in the next 2 to 5 years.
TECHNOLOGY IN BUILDINGS
In 2018, we saw IT and mobile phone companies such as Dell, GE and Vodafone entering the building controls market. Sales of mobile phones to consumers have reached saturation point, so the search for new markets by the main operators is on. The Internet of Things in buildings offers a new way to apply mobile internet technology, so MBS predicts that we will see more newcomers like this in the market.
It’s unlikely that these corporates will tackle the existing building management systems’ suppliers head-on. Instead it seems that they are developing technology that overlays the existing BEMS and allows users to interact with it via familiar and flexible interfaces such as their smart phones. A good example of this is Bubbl, developed by Econowise (See MBS, May 2018).
Companies such as GE and Dell have strong business-to-business marketing skills, so they know how to appeal to finance directors at board level. Linking room booking systems to the BEMS may seem a small step, but it can be sold as a boost to productivity and better space management – something that spells money to building owners and corporate occupiers. (See MBS News, November 2018).
TECHNIQUES: MODULAR, PREFABRICATION AND OFFSITE
None of these techniques is new. But there is now a push from government to adopt these ways of working. Reports from the House of Lords, Mark Farmer and Homes England view it as necessary for construction to deliver what’s required of it – more housing and infrastructure at lower cost and with better quality. And years of under-investment in training have effectively left the industry with little choice but to find alternative methods to get projects finished with fewer on-site skills.
Building services equipment can also be prefabricated and delivered as plug-andplay. Again, not a new approach but one which MBS believes will be increasingly common in the commercial and domestic arenas as clients recognise the benefits of factory-built plant rooms.
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This is an important environmental driver for the UK, and one which MBS sees as likely to result in development of more heat networks in the domestic, commercial and mixed project arenas. Heat networks have the benefit of being able to use a range of heat sources, making them future proof – as long as they are well designed from the start.
They also have the benefit of helping to alleviate fuel poverty – a big political win. There are of course other heating systems that reduce reliance on gas, such as heat pumps. The switch away from the wellknown technology of the gas boiler won’t be overnight, and consumers will have to be educated, but we expect to see a change of direction over the next few years.
ON-SITE ENERGY STORAGE
Along with decarbonising heat, the UK is moving towards more use of renewables for generating electricity. We are also seeing changes in the price of electricity for commercial customers which is encouraging adoption of Automated Demand Response (ADR) to reduce use of electricity at certain times. On-site energy storage, coupled with on-site generation, enables building owners to switch power usage from grid to on-site automatically – saving energy costs while also receiving payments from the Grid for reducing usage.
Battery storage is a growing area of R&D, with prices falling and technology becoming more practical for businesses to adopt. Be prepared to see more on-site storage in commercial buildings and even in our homes, particularly as government drives us all towards use of electric cars.
PEOPLE: COMPETENCE, SKILLS AND DIVERSITY
The building services and construction sectors are facing pressure to change how things are done. Companies in these areas will have to attract new employees and train existing staff in order to move forward. Changes to the Apprenticeship Levy should support more training in new methods for current staff and help to attract more young people to the industry.
However, the Construction Sector Deal points out that ‘86% of construction workers are male and 94% are white’. And in a recent interview with MBStv, former cabinet minister and MP Caroline Flint highlighted the need for greater diversity in our sector – and the benefits that it will bring to the industry in terms of better performance. It is an issue that governments of all political types will support. MBS predicts that the sector is going to have to change this reality and offer a better image of itself to young people looking for fulfilling careers.