CITB cuts grants as income falls and claims rise

CITB-ConstructionSkills is cutting training grant payments by 10% as a result of a fall in the levy payments due to the recession. The 10% across-the board cut takes effect next month but will not apply to apprenticeship and undergraduate grants, where rates remain unaffected.

While the organisation said it remained committed to paying ВЈ1 in grant for every ВЈ1 received in levy, but last year grants claimed amounted to ВЈ176m – some ВЈ20m more than planned - which is unsustainable. New forecasts have also indicated Levy income will fall significantly more than expected in 2010 and will not recover to current levels until at least 2014.

In addition to cutting grants, the CITB is reducing the Supplementary payments (made to firms which pay the Levy on or before the due date) from 20% to 10%. This follows an earlier cut from 25% when grants for the Health & Safety Test, Investors in People and OSAT profiling were also removed. ADVERTISEMENT

 
 
BAM’s Chris Jones who chairs the Grants Scheme Working Party said: “In an ideal world, we wouldn’t reduce grant rates, but the recession is forcing businesses to make tough decisions and unfortunately, we are no different. This has been a very tough decision – regrettable but essential in the current climate.”

Miss Scotland opens trade supplies store - PHOTO

Current Miss Scotland Katharine Brown has opened a new trade supplies store in Stirling.

The Fasco Extra store claims to offer all trade supplies "from 50p for a drill bit to ВЈ2,000 for high-end pressure washer".

John Scott, managing director of Fasco of the firm, which also has branches in Grangemouth and Shetland, said; “We are taking a positive and bold step forward in what is a difficult economic climate:  we felt it was important to demonstrate our confidence in the company, products and staff with this new venture.

 вЂњSince taking over Fasco in 2007, the company has experienced continual growth thanks to the strength of our staff expertise, product knowledge and superior service enabling us to retain existing customers and expand our client base. With its central location and great transport links, Stirling is the ideal location for the first Fasco Extra and we hope this will be the first of many that will open across the country.”

£100m Erith Western Gateway to be packaged up

Bexley Council is unlikely to re-tender for a development partner for the ВЈ100m Erith Western Gateway scheme in south-east London, which stalled in February after the appointed partner Crest Nicholson pulled out of the job.

The council is now reconsidering its options, and a source told CJ the work is likely to be divided up into a number of smaller packages.

"Procuring a single development partner has not worked, so we need to see if it would be right to try to re-tender or whether it would be better to split the project into smaller phases. We are thinking creatively about it," the source said.

The job, which is worth at least ВЈ100m, had attracted bids from Barratt Homes, Generator, Gleeson Homes and a Bouygues/Moat Homes joint venture.

Proposals include at least 500 new homes, a hotel, offices, shops, leisure uses and open space.

Bexley Council expects to announce how it will take the project forward towards the end of the year.

Rok extends payment terms to 60 days

Rok is the latest contractor to extend its standard payment terms from 30 to 60 days for new contracts with sub-contractors and consultants.

It joins Carillion, which also takes 60 days to pay.

The Forum of Private Businesses (FPB) published details of a letter sent to subcontractors and consultants on 22 June, informing them of the change “which if not refuted in writing within seven days of its receipt will be deemed effected.” a
 
Rok confirmed that it had changed its standard terms to 60 days for all new agreements but claimed that the letter had been sent out in error and was not part of the "usual Rok language" and did not reflect the "true situation".

One FPB member, who wished to remain anonymous, said: “The company has said that these new terms and conditions will apply unless there are objections to them, but, in reality, how can you stand up to a business of Rok’s size? There’s no doubt that many smaller sub-contractors and their suppliers will struggle as a result of this move, but speaking out will simply result in Rok refusing to work with them again. It’s a no-win situation.”

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Nick Palin, the FPB’s director of finance and administration said: "Small businesses are bearing the brunt of the slump in the construction sector. It is not reasonable for big businesses to pass on costs incurred via changes to payment terms and conditions further down the supply chain.
 
"In the current economic climate, this behaviour can force small firms to cease trading altogether. The FPB is campaigning to change the culture of poor payment in the UK and is urging to Rok plc to sign up to the Prompt Payment Code."

If you know of any other contractors or clients which have recently extended the time it takes them to pay, email: neil.gerrard@rbi.co.uk

Balfour Beatty 'making progress' in 2009

Balfour Beatty expects its orderbook is "broadly in line" with the ВЈ12.8bn it reported for 31 December 2008.

The company made the prediction as part of a trading update ahead of its half-year results announcement on 12 August.

It added that it expects to "make progress" in 2009, and its cash position remains "strong" with average net cash in excess of ВЈ200m for the first six months of 2009.

The company said that it expected to reach financial close on the ВЈ147m Carlisle Northern Development route, which has been dogged by delays since Balfour was appointed last year.

Dawnus Construction's pre-tax profit falls 57%

Dawnus Construction has seen its pre-tax profit plummet by 57% in 2008, despite turnover increasing 9% to ВЈ69.2m.

The Swansea-based firm is a building and civil engineering group with a subsidiary, Dawnus Plant, that provides plant hire services.

It generated ВЈ0.9m in pre-tax profit for the year ended 31 December 2008, compared to ВЈ2.1m in 2007.

Despite this, a directors' report for Dawnus Holdings, Dawnus Construction's parent company offered a bullish outlook for 2009.

It said: "During 2009 and future years, the group is well-positioned to maintain real growth. The thrust of future business development will be focussed on securing larger civil engineering contracts and leveraging our experience labour force to win new building contracts.

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"Secured turnover at the end of 2008 was once again at a record level, which, together with a strong pipeline of potential contracts, should ensure continued substantial growth in 2009."

Over the year the company said its labout costs increased by 30% as it boosted its direct labour force.

Dawnus Construction's highest-paid director took home ВЈ178,268 in 2008, with ВЈ21,208 going into the pension pot.

Construction college put on hold

Plans to revamp the National Construction College have become the latest victim of the funding-crisis engulfing the Learning and Skills Council.

Redevelopment plans costing ВЈ26m for construction's main training college failed to make it onto the LSC's shortlist of 13 schemes as part of the Further Education capital funding programme.

Backers of the NCC will have to resume their fight for cash in the autumn when the LSC will start drawing up funding plans for the next spending review period starting in 2011-12.

The NCC is one of 79 projects which had already received approval in principle from the LSC before a huge hole was discovered in its finances.

Andy Walder, NCC Director, said: "If we can not find funding for this project it means a huge loss for both industry and the region. The NCC is of major national and regional significance, delivering unique training that is not available, and can not be delivered anywhere else in the UK.

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"Our project met all the LSC’s вЂreadiness to start building’ criteria – with full planning permission, a strong design team, detailed build designs and all other funding sources in place for a planned start on site of Autumn 2009. We had already stripped away aspects of the project that were not essential. The remainder of funding – outside the LSC’s contribution – is already in place, including funds already set aside by the College and grant money from the East of England Development Agency.

"The National Construction College trains 30,000 adults and 800 apprentices every year, across the UK - the majority trained at NCC East. The College’s facilities are over 70 years old and in urgent need of redevelopment. Without this funding the college cannot continue to provide the training support the construction industry urgently needs. We are now actively seeking talks with the LSC to ensure they understand the unique nature of this project and to discuss how we can secure the redevelopment."