Six towns and cities to pilot clean heat networks
Six towns and cities have been chosen to develop the country’s first heat network zones, focusing on recycling excess heat from sources like data centers and factories to heat nearby buildings.
Leeds, Plymouth, Bristol, Stockport, Sheffield, and two locations in London will share nearly £6 million in government funding for pilot plans, with construction expected to start in 2026. This initiative aims to create tens of thousands of jobs in engineering, planning, manufacturing, and construction.
Excess heat from data centers will heat the Old Oak and Park Royal Development, while Leeds will use heat from a glass factory. Potentially connected buildings include hospitals, universities, hotels, supermarkets, and office blocks.
Caroline Bragg, CEO of the Association for Decentralised Energy, expressed enthusiasm for government support, emphasizing that heat network zones are vital for decarbonizing heat and attracting private investment, while also creating local jobs. She called for continued collaboration between the government and industry to maximize the potential of heat networks.
Gleeds to become an LLP under simplification plan
Gleeds is transitioning from a general partnership to a Limited Liability Partnership (LLP) structure in January 2025, aiming to simplify its operations. This change coincides with its move to a new global headquarters at 60 Berners Street, after 20 years at New Cavendish Street.
As part of the transition, Gleeds plans to reduce its number of legal entities in the UK, streamlining accounting and operations. Approximately 70 employees across UK offices will be asked to resign their statutory directorships voluntarily, but this will not affect their current roles.
Brian McArdle has been appointed as the new UK managing director, succeeding Anthony Cork, who is leaving after 27 years. McArdle, who joined Gleeds in 2007, was previously regional managing director for the North and will join the operations board.
Chief Operating Officer Salar Farzad highlighted the benefits of becoming an LLP, including greater transparency and simplified accounting, as the firm aims to thrive as an independent business. Gleeds anticipates a 15% rise in group turnover this year, projecting £267 million, with UK revenue increasing from £130 million to £145 million. The firm employs around 2,800 people globally.
Construction business confidence hits three-year high
Confidence among construction firms has hit its highest level in nearly three years, according to a survey by the Institute of Chartered Accountants in England and Wales (ICAEW). The construction sector’s business confidence index for Q3 2024 stands at 25.3, significantly above the national average of 14.4, marking the highest level since Q4 2021.
This increase in confidence is attributed to rising domestic sales and optimism about lower interest rates and supportive government policies. Firms anticipate sales growth of 6.6% over the next year, following a 2.8% rise in the last quarter. Notably, only 32% of businesses expressed concerns about customer demand, the lowest in two years.
However, high input costs remain a challenge, with inflation rising to 4.6% for the second consecutive quarter. Despite this, firms expect inflation to decrease to 1.8% in the coming year, lower than the UK economy’s average projection of 2.4%.
In terms of investment, the construction sector reported just 1.1% capital investment growth over the past year, the lowest among all UK sectors. One in five firms expressed growing concerns about accessing capital, yet they plan to increase capital investment by an average of 1.8% next year, slightly above the historical average of 1.6%.
Additionally, a recent NatWest survey of SME construction firms indicated the sharpest rise in new work in two and a half years, along with the highest output growth for smaller companies since January.
CLC slams ‘onerous’ contract amendments
The Construction Leadership Council (CLC) has criticized clients for making “onerous” amendments to standard contracts, expressing concern about their impact on contractors’ insurance coverage. The CLC’s Professional Indemnity Insurance (PII) working group urged clients to avoid unnecessary changes that could expose contractors to coverage exemptions.
The group highlighted that many amendments impose liabilities that are excessive for the nature of the work and often fall outside the scope of contractors’ PII. This can lead to situations where clients’ claims for loss and damage are not covered, potentially resulting in severe financial consequences for contractors.
The CLC emphasized that such amendments make contracts unviable, reduce competition, and increase legal costs associated with reviewing the new liabilities. They suggested that starting with an unamended template would clarify roles and responsibilities, particularly regarding fire safety, as recommended in the Grenfell Tower Inquiry report.
Chair Samantha Peat stated that a more sensible approach would simplify risk allocation and provide clarity for project teams and PII providers. This change could also help ensure contractors are not held responsible for more than their fair share in the event of a claim, especially involving those without adequate PII coverage.
Government should create cross-departmental housing delivery unit, says report
The Radix Big Tent Housing Commission, initially chaired by Kate Barker, has called on the government to establish a cross-departmental housing delivery unit to streamline policy efforts. The report, titled “Beyond the Permacrisis – Delivering 1,000 Homes a Day,” includes 15 recommendations aimed at improving housing delivery, including reforming developer contributions and securing a timely rent settlement for housing associations.
New chair Alex Notay emphasized that real change in delivering affordable housing requires not only new structures but also significant financial investment, stating, “Real change… will need to be matched… with hard, cold cash.” The report stresses the urgent need for more social rent housing, which will require government subsidies.
Notay noted that the housing market is currently in worse shape than two decades ago, highlighting failures in linking new housing with infrastructure and a decline in social rent home supply since the financial crisis. The commission’s recommendations aim to address various viability issues and improve strategic planning.
The report has garnered support from industry leaders, with Victoria Hills of the Royal Town Planning Institute praising its holistic approach to housing and planning. Melanie Leech of the British Property Federation acknowledged the lasting challenges identified in Barker’s previous review but noted the significant role of institutional investment in housing today. The report has been submitted to Matthew Pennycook, the Minister of State for Housing and Planning.
For weekly roundups on the UK construction & property sectors be sure to follow us on LinkedIn!
