The government's involvement in Afghanistan and Iraq has upped its military spending and chancellor Gordon Brown has admitted that next year he will be forced to borrow an extra £10bn to support his public spending plans for new schools and hospitals. In the pre-budget statement Brown confirmed the government's commitment to increased capital expenditure in funding key public services. However, the government has fallen behind its construction spending targets in social housing, healthcare buildings and railways, and only comes close to its spending targets on schools and roads. However, there are concerns that unless the rate of government spending is increased now, the industry will not have sufficient capacity to meet demand if a flood of new projects is introduced prior to the next general election.
The War on Terror
OK, so we got Saddam, but it remains to be seen whether the long-term security threat to US and British forces in Iraq will subside significantly. In any event, there'll be plenty of work this year for those British construction firms who decide to brave working in Iraq. The reconstruction process has been slow to take off but Blair's loyalty to the Bush administration has bought British construction firms a privileged second place in the contracts queue, and several are already getting stuck in. Meanwhile, the threat of terrorist attacks in the UK will need to be addressed by developers and designers in the construction of buildings – driven, in part at least, by the possibility of lower insurance premiums.
With harsh new immigration legislation coming before parliament and the unions calling for the government to put a stop to European contractors bringing in cheap overseas labour, immigration is going to be top of the industry's agenda this year. Meanwhile, the Home Office is considering setting up its own foreign workers' employment agency for PFI projects to address the shortage of skilled workers to push through the government's spending plans for schools, hospitals and housing before the next general election. However, many British workers aren't happy being undercut by an influx of cheap overseas workers – many of them eastern European – and have held demonstrations outside the House of Commons. They'd like to see more government investment in training the younger generation and promoting the industry to school leavers.
London's Olympic bid
It could be the nation's biggest construction spending spree for a long time – the government's 2012 Olympic ambitions will cost £3.6bn according to consultant Arup and will transform east London. If the government's bid is successful, the capital will gain an 80,000-seater stadium complex in Stratford and an Olympic village for 16,000 athletes. However, many claim that without Crossrail – the proposed east–west rail link – transport infrastructure to and from the games will not be able to cope with the huge numbers of visitors.
A consortium led by masterplanner EDAW and architect HOK Sport has already picked up the masterplanning contract – but can it design a bid that will outshine New York, Paris, Budapest and São Paulo?
04 Buildings due for completion
Both the design and construction teams struggling to complete the controversial £400m Scottish parliament building must be counting down the days until the project finishes. The Enric Miralles-designed building is currently the subject of a public inquiry because of the dramatic cost hikes and delays. It was originally slated for completion by the end of 2003; parliament says that it will not be finished until July. The construction team reckons August, at the earliest …
Phallic towers are big this year. In Barcelona, the Spanish have proved they are no prudes when it comes to the construction of towering innuendos. The 142 m high Torre Agbar – Barcelona's very own version of the Swiss Re tower – will open early 2004. The form of the Jean Nouvel-designed building is said to be based on the "fusion of two opposing ideas: the lightness of glass and the massiveness of concrete". And in London this year, Swiss Re financial services workers should finally be ensconced in the Foster-designed icon at 30 St Mary Axe.
Gateshead Music Centre
The city of Newcastle too will be gaining a Lord Foster landmark with this summer's opening of the Sage Gateshead on the banks of the River Tyne. The music centre will be home to three performance spaces – the largest of which is a 1650-seat auditorium – all housed beneath the spectacular crashing wave roof.
Wales Millennium Centre
Last of the quartet of big openings in 2004 is the £104m Wales Millennium Centre. The theatre, which includes drama and dance studios and a 150-bedroom hotel has been diversely described by Richard Morrison in The Times as "looking immense: an imposing mound of Welsh slate, Welsh spruce wood, Welsh glass and Welsh steel" and by Rowan Moore in the London Evening Standard as "a giant shell-less mollusc crawling over a pile of slate". Make up your mind when the centre opens its doors in November.
04 Cities to watch
It is the government's most high-profile regeneration project and involves a city the size of Leeds materialising east of London. The Thames Gateway is deputy prime minister John Prescott's baby, and JP has earmarked £330m under his sustainable communities plan to drive the development of this rundown Thames-side corridor.
An urban development corporation will be set up this spring to sidestep local authorities. And to streamline the process Prescott is hoping to grant planning approval to masterplanned areas – provided developers meet strict design standards. If all goes well, more than 120,000 homes will be delivered in five regions by 2016. But with a quarter of the London Development Agency's funding being siphoned off for the Olympic bid, this year will be crucial in determining whether Prescott's ambitions be achieved.
The Greek capital should be a top tourist draw in 2004 as the Olympics makes its homecoming. However, construction of the centrepiece Olympic Stadium – which is basically Athen's old athletics stadium with a new roof designed by Spanish architect Santiago Calatrava – has been slow to get under way. With a year to go until the start of the games, structural experts warned time was running out for those tasked with building this ambitious project. For now though, it's all systems go. Another 235 projects, ranging from state-of-the-art stadiums to the New Acropolis Museum and two underground lines, are also being built for the games. Will they be ready on time? Like the best Olympic events, it should be a nail-biting finish.
Over the next 15 years, 42% of Russia's capital will be under construction, if the general development plan for the city goes ahead. New buildings will include shops, restaurants, offices, fitness centres, cinemas and elite housing. The city's mayor, Yuri Luzhkov, has reportedly endorsed plans for 60 skyscrapers to be built in the capital to help eradicate its dreary communist legacy and generate a 21st-century shrine to capitalism. Who knows, perhaps Moscow could even give Dubai a run for its money.
With its new-found status as European Capital of Culture 2008, this vibrant city is set to become a construction and regeneration hotspot. Architect Will Alsop's waterfront Fourth Grace will set the pace, with other projects including a £700,000 steel and aluminium sculpture with 12 fins called the Mersey Wave. Early this year the city will select the architect for an £85m arena and conference centre in the King's Dock. And plans are under way for a festival of architecture as part of the city of culture celebrations, with pavilions being commissioned from internationally acclaimed practices.
04 Technology–driven changes
Gadget freaks will be delighted by the shiny new wireless-enabled PDA, smartphone or laptop that will be pressed into their hands sometime during the year. Wireless technology has finally come of age and is now cheap and reliable. Smart contractors such as Laing O'Rourke have realised it offers savings, and equipped managers with wireless laptops. Wireless means anyone on site can access information direct from head office without having to trudge to the site office and find it on a drawing buried under a paper mountain. Now the technology is so accessible construction will embrace it with the same enthusiasm embraced mobile phones back in the late 1980s.
Forget roads and the congestion charge; forget rail and its interminable delays, if you want to get materials to site quickly and without hassle then teleportation is the way ahead in '04 … That is, in 2104. Dr George Forster from the Think Tank Discovery Centre in Birmingham has claimed that the technology used in Star Trek could be available within 100 years. Scientists have reportedly already transported electrons across a laboratory – so how much longer before they are teleporting bricks and even workers to sites around the world. The chant "beam me up" could soon be taking on a whole new meaning for steel erectors.
Reverse auction bidding
With everybody online these days, the big technology news for 2004 will be reverse auction bidding. The Office of Government Commerce sees it as a way to save taxpayers' cash and help Gordon Brown meet his spending targets. The government has piloted reverse auction bidding for products and has been astonished by the savings.
For example, 29% was saved on the cost of tea for the NHS and MoD. The OGC has signed a framework deal with five e-auction service providers and will roll out reverse auction bidding across central government departments, and is likely to extend it to construction procurement. So expect to see a reverse auction near you soon.
Domestic power generation
A potentially huge market for home-generated electricity is set to explode in 2004. We're not talking wind and solar power, but domestic combined heat and power plants called micro-CHP. A micro-CHP plant is the size of a washing machine, produces hot water and also generates electricity. Powergen and Microgen, part of the BG Group, have trialled the units. According to the firms, consumers should save an average of £150 a year on energy bills and also reduce carbon dioxide emissions by 20%. Expect the government to offer grants as the product will help the UK meet its carbon emission reduction targets. Powergen is set to launch it this winter with Microgen hard on its heels.
Ken Shuttleworth, Norman Foster's right-hand man and one of the UK's most influential architects, is leaving Foster and Partners after 29 years. Shuttleworth was the architect behind the Swiss Re tower and the Greater London Authority's City Hall. The rumour is that Shuttleworth will be setting up his own practice in the new year. Watch this space.
Quantity surveyors are to have a new campaigner to raise their profile at the RICS and to promote their services to the rest of the industry – none other than Davis Langdon & Everest's Paul Morrell. Morrell has been parachuted in to head off a revolt by 30,000 quantity surveyors at the institution. His role will be to champion the interests of these reactionaries, who have felt unloved since the RICS replaced its dedicated QS division with the amorphous construction faculty.
Australian contractor Multiplex, known for its work on the national stadium at Wembley has floated on the Sydney stock exchange. The move raised £598m, which the firm says will be used to fund construction projects.
As managing director of the contractor's UK arm, Paul Gandy will be looking to capitalise on this initiative. The firm has won the contract to build the Ian Ritchie-designed White City retail scheme in west London, and is on the shortlist for a £250m PFI hospital in Peterborough, Cambridgeshire.
This is the year that Ray O'Rourke, chief executive of contractor Laing O'Rourke, will pursue plans for world domination. He wants to make Laing O'Rourke the "worldwide contractor of choice and position it at the forefront of best practice".
O'Rourke's strategy is to make the contractor the most efficient in the business: the firm is already the leader in prefabricated reinforcement and is investing in IT. The contractor is currently heading up the £3.5bn Heathrow Terminal 5, where the firm has struck a £55,000 pay deal for its skilled workforce.
04 Industry Bodies
We asked four major construction bodies what they have in store for 2004. Here's what they told us …
Federation of Master Builders
The FMB will press on with its campaign for a VAT cut on repair work. Another objective is reform of the CIS scheme. In health and safety, FMB expects to be involved in developing the Worker Safety Adviser scheme and an occupational health scheme. We'll be working with the HSE to bring health and safety awareness days to smaller builders.
The second stage of our consumer marketing initiative will be rolled out. FMB's Find A Builder website is already helping homeowners to find builders.
Members' confidence in the overall economy remains positive, and in that light, the chancellor's prediction of 3% growth next year seems realistic.
Ian Davis, director general, Federation of Master Builders
House Builders Federation
The Barker review has confirmed what we have long believed: that undersupply is having a damaging impact on house prices, the economy and society. Given that the review has pinpointed failures in the planning system as the principal cause and that finalised planning legislation is only months away, the start of 2004 looks busy.
Will the promised "biggest shake-up of the planning system in 50 years" materialise? Or will it be a damp squib?
The challenge will be to convince government there is only a small window of opportunity left to turn its dream of sustainable communities into reality.
Spokesperson for the HBF
Construction Products Association
At the top of the CPA's 2004 agenda is chancellor Gordon Brown's summer spending review. In February the CPA will meet Treasury officials to ensure it remains committed to its capital investment plans.
We will work with Kate Barker's team to ensure her final report includes recommendations to increase housing supply and lower VAT rates on maintenance.
We will also focus on environmental issues, such as ensuring that all government and the European Commission policies on waste are compatible.
In March, the Industry Advisory Groups will report back to ODPM on the next set of revisions to Part L. The revisions will have implications for many parts of our industry and much will need to be done if the 2005 target date is to be achieved.
Jean Emblin, external affairs director, CPA
Construction Industry Council
Last year was an important one in terms of preparing the ground for some essential initiatives. I am thinking particularly of the strategic forum and its targets of integrated teams, increased recruitment and retention and better product value. The forum is now backed up by an alliance of CITB–ConstructionSkills, Constructing Excellence and the CIC, together with the other industry umbrella bodies and unions.
The biggest threats to the construction industry in 2004 are the inability to maintain steady growth in the economy and undue, heavy-handed political intervention, the potential for which is enhanced by the dilution of responsibilities for planning, designing, building, managing and maintaining the built environment across many diverse bits of government.
Graham Watts, chief executive, CIC
2004 New Year’s ResolutionsTime for a fresh start? Building asked some industry figures what their new year’s resolutions will be …
Peter Rogers, director, Stanhope, strategic forum chairman:
“Not to compromise, and not to let others compromise. It’s time we stood by what we thought, and did it.”
George Brumwell, general secretary, UCATT: “To secure sufficient funding from the Department of Work and Pensions to get a much-needed occupational health pilot scheme up and running.”
Harry Handelsman, CEO, Manhattan Loft Corporation: “To change the perspective of people knowing us as just loft developers – we’ve been working on office projects and mixed-use developments in the past couple of years and we want people to know us for that.”
Nigel Griffiths, construction minister:
“To support the strategic forum for construction and drive forward the industry improvement agenda. One of my key personal priorities will continue to be client leadership, especially within government. I want to see faster progress in this area so that efficiencies and expertise within the supply chain can be released to add value to clients, and business benefits to the industry.”
Paul Warner, director of research, Reid Architecture:
“To get a proper job!”
Dermot Gleeson, executive chairman, MJ Gleeson: “To stop calling my PR by my wife’s name, and vice versa.”
Ian Wall, chief executive, EDI Group “Too many buildings still lack the quality of design that will stand the test of time. It’s my ambition in 2004 to create a building worthy of listing for architectural importance in 2040.”
Stephen Atkinson, director, Fitzroy Robinson Architects:
“Worry less – play more. Practice makes perfect!”
Sir Michael Latham, chairman, CITB: “Not to have any new year’s resolutions – because I never keep them anyway.”
Wally Kumar, director, Development Securities: “To put things where I can find them again.”
Jon Rouse, chief executive, CABE: “To lie in front of the bulldozers and oppose backtracking from the current planning restrictions on out-of-town development. I can’t believe that the government will weaken what has been one of the most successful planning policies since 1947 in helping regenerate towns and cities, but I also know never to underestimate the lobbying power of the likes of Ikea and Wal-Mart. There may be a lot spare land in Sweden and the US, but there ain’t here boys, so back off.”