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EP_19.jpg July/August 2005
Cover Story
Up to Speed
A Better Future
Bovis Homes

London is hosting the 2012 Olympic Games and Paralympic Games, but can the construction industry cope with the added workload? Libbie Hammond looks at some of the opportunities and challenges.


index.jpg The 6th July 2005 was a momentous day. The hard work of the Olympic bid team was rewarded when international Olympic Committee President Jacques Rogge announced that London would host the 2012 Olympic Games and Paralympic Games. Speaking soon after the news, London 2012 Chairman Sebastian Coe said: “This is the most fantastic opportunity to do everything we ever dreamed of in British sport.”

Of course, sport is the primary focus of any Olympics, but the events can’t be performed without the right facilities, and with today’s global audience, their quality will be judged around the world. It is imperative that the UK construction industry creates a range of state-of-the-art Olympic amenities, in just seven years.

On the plus side, Andrew Symms, a construction expert at DLA Piper believes London 2012 will give the UK’s construction industry the biggest boost it has ever seen. He said: “Regeneration and re-development will provide a lasting legacy well beyond the last javelin being thrown and keep players at all levels of the supply chain occupied for many years to come. It is not just London and the South East that will reap the rewards: contractors, manufacturers and suppliers across the country stand to gain and the knock on effect of the main development planning will be a host of other related and unrelated projects which will boost the UK economy as a whole.

“After the Games, the Olympic Stadium will be transformed into a 25,000 seat athletics stadium, the Aquatics Centre (which has already been started) will be reconfigured to a capacity of 3000 seats and the Olympic Village will help deliver 9000 new homes after the Games, many of which will be in the form of affordable housing.”

Michael Brown, the deputy chief executive of the Chartered Institute of Building (CIOB) agreed that this is a momentous opportunity: “The UK construction industry has the perfect occasion to showcase all its quality and produce an inspirational platform for those athletes and spectators taking part in 2012 London Olympics. We can make it not only the best Games the world has seen, but also leave behind a legacy that will improve the lives of not just those in London but of many people up and down the country,” he said.

“There will be two kinds of stars at the Olympics 2012, those from the sport side, and those who make it a reality and literally build the dream. We have the perfect vehicle to promote a career in construction, if we can harness the imagination that the Olympics create then we have an excellent chance of recruiting new entrants into the industry.”

Michael raised an important challenge surrounding the Olympics – finding the staff to work on the projects. There is already a big demand for construction workers in Britain - with the most recent Skills Foresight Report from CITB-ConstructionSkills estimating that over 86,000 new entrants to the industry are needed each year to fulfil current commitments alone. Winning the Olympic bid could significantly impact on that number. David Boyden, director of The National Construction College (NCC) said: “The Olympic projects represent a great opportunity to train and engage people from the local community and help to create a sustainable workforce. However, everyone involved in the Olympics needs to work together from the early stages to ensure that a fully trained and qualified workforce is provided to ensure a timely delivery of this project.”

Trevor Rees, the Recruitment and Employment Confederation’s technical, engineering and construction sector commented: “The current demand for quantity surveyors, estimators and good quality trades people will affect our ability to meet the Olympic challenge if we fail to address it now.

“The skills will come from a diverse range of European workers, including many from the UK. As they did with Athens and Barcelona, these countries will make 2012 construction projects a target for generating good income.

“Construction workers from across Europe will be willing to travel to gain long-term, well-paid employment. This will be utilised by full time employers and recruitment agencies alike. However, to see the legacy that Lord Coe promoted to win the Games, the UK must make investment for the future beyond 2012.

“Recruitment agencies should begin working on ‘kickstart’ programmes to up-skill their local, younger workforce in the key demand areas and feeding them in at ground level early in the projects to allow them to grow into construction professionals. This will help allow us to meet the demand that the estimated £8bn worth of construction, civils and infrastructure work will create.

“The UK does not have seven years to train these people up. The next seven months have to be the focus. We really have to make the effort now to avoid failure. Otherwise, we will risk losing the great opportunity of attaining the legacy of long term skills and high-employment levels as a result of such a wonderful Olympic bid victory.”

Danny Gowan, executive partner at Davies Arnold Cooper concurred that European labour would be critical to the project. He said: “This is a huge boost for the industry, not just here but in Europe generally. It will however suck up much of the available resource in terms of labour and materials. Lack of investment in recent years in training will create openings for skilled labour from across Europe to realise the various projects. Major sporting projects in the UK have all suffered from significant problems of delay and cost overrun, which have adversely affected the contracting organisations involved, and we must learn from these.”

Echoing the concerns of Trevor Rees, The Learning and Skills Council raises the question as to whether the skills level of the current construction workforce is adequate to deliver the goods. Currently fewer than 60 per cent of electricians and plumbers have the crucial technical qualifications needed, and this figure is under 50 per cent for construction. The lack of technicians, advanced craft, skilled trade and associate professional skilled people must be addressed as a matter of priority, but Chris Banks, chairman of the Learning and Skills Council is confident that the UK can provide what is needed. He said: “This Government’s skills strategy will ensure that we will get the people we need with the right skills who are going to make the Olympics happen. The productivity and competitiveness of our nation is dependent on the skills of our workforce.”

However, as all eyes turn to London, other projects across the country could see their costs spiral, warned mixed-use specialist Henry Davidson Developments, part of the Fiducia Group. MD Scott Davidson says the period from now until 2012, when the games take place, will have a knock on effect on the businesses, local authorities and the healthcare trusts with whom they work.

“As soon as work begins on the new Olympic facilities we will move into a period of spiralling construction costs as the Games pull skills and materials resource from an already short supply of craftsmen and labour. This will be at its most intense in London with a ripple effect moving outwards,” he said.

Phil Jones, senior partner at Ridge agrees that costs will increase. “This scheme has already impacted upon the availability of certain skills in the region and pushed tender prices up, which are already typically more than double domestic inflation. There is no doubt that construction industry inflation will continue to rise more quickly as a result of our Olympic success,” he commented.

Charles Smailes, chair at the National Association of Estate Agents commercial division spoke about the need for long term thinking around any Olympic development and the lessons to be learned from previous host nations: “The construction sector needs to think beyond 2012 to get investors on side: they will want to take a cold hard look at the sustainability of the developments following the Olympics when seeking investment opportunities.

“Investors will be looking to learn from other countries, such as Greece, who did not look beyond the Olympics and are now burdened with barren developments.”

Despite these foreseen problems, many members of the Royal Institute of Chartered Surveyors believe the Olympics will leave a lasting improvement in a very deprived area of London and the fact some of the facilities can be relocated to other areas is a great benefit. For example, RICS member Stuart Pearce of Pearce & Associates in London said: “One only needs to look at Manchester to ascertain the potential benefits. Large-scale infrastructure improvements have benefited the City as a whole (as it did Glasgow in the decade or two before and hopefully Liverpool to come 2008). London seems to be missing out on the more radical public investment programmes that are benefiting other cities.” A hope shared by many is that London will also see improved public transport infrastructure.

Andrew Simpson, a partner at leading international consultancy EC Harris, looks at both sides of the argument as to whether or not work needed for the 2012 Olympics will cause the UK’s construction industry to overheat.

He said: “There are currently many contrasting views about how winning the Olympic bid will impact on the UK’s construction sector. Obviously it will help to fill order books for many companies and provide employment opportunities for thousands of people but as with most things, the overall effect will depend on levels of supply and demand in the run-up to the event.

“The main problem is that it’s extremely difficult to predict the future workload in both the private and public sectors. The commercial sector has been relatively buoyant for the last few years but this could change and the government’s substantial spending commitments look set to continue for the next few years at least. If these markets suddenly take-off it could result in a huge surge of construction work that would add to the skills shortage and cause prices for materials, labour and tenders to soar.”

Finally he concluded: “Overall there’s no doubt that winning the Olympic bid will have a positive impact on the construction industry as a whole but it’s the knock-on effect that it could have on other industries that may prove to be the hidden downside. Careful management from the Olympic Delivery Authority and the government will be essential to ensure the market can cope during peak construction periods.” CT-E

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