us-business

This audio is auto-generated. Please let us know if you have feedback. In the first half of the year, one word continued to appear in headlines surrounding broad economic and political change: “uncertainty.” Construction Dive’s Uncertainty Series delves into how this lack of clarity is affecting contractors and what the future holds. Read the previous article here. In a construction market hungry for clarity, even a hint of positivity could unlock building momentum. That’s the hope among contractors who say the path forward in nonresidential construction has grown murky. Although planning activity ticked up in June, uncertainty around interest rates continues to hamstring the number of groundbreakings. “Many commercial builders have developed a wait-and-see approach to planning and starting new projects until borrowing costs come down,” said Brian Schmidt, senior director of economic policy and analytics at the American Cement Association, a Washington, D.C.-based trade group. “Going into 2025, most developers expected interest rates to continue to decline throughout the year. Now tariffs have introduced new uncertainty for both material price escalation concerns and the pace at which interest rates will come down.” Delayed expectations have already shaken the project pipeline. ConstructConnect, a Cincinnati-based construction data provider, noted a spike in on-hold and canceled projects, according to its Project Stress Index. “We have seen surges in the number of delayed, on-hold and abandoned projects when generally held interest rate expectations no longer align with reality,” said Michael Guckes, chief economist at ConstructConnect. “In both late 2023 and even more so in late 2024, the industry realized that elevated inflation would keep rates higher for longer than previously expected.” Even contractors with strong backlogs report growing concern about the future. Many fear for a drop-off once their current workload dries up, said Anirban Basu, chief economist at the Associated Builders and Contractors. “For the most part, people are pretty busy in construction, but they’re nervous in many cases about that backlog in 2026 or 2027,” said Basu. “Not as many new deals are being signed, and it’s become more difficult to win bids because they’re more competitors in every bid.” Waiting for a pivot As contractors continue to hope for a Federal Reserve pivot to cuts, most analysts now anticipate only modest action this year, if any at all. The most recent June inflation data posted higher than expected readings, adding doubt to a future slash. “We do not expect a meaningful turning point in 2025. The Federal Reserve has stated that they would likely have cut rates by now if it were not for the tariff uncertainty,” said Schmidt. “Even with one or two 25 basis point cuts, monetary policy will still be restrictive. It will matter more as a signal to builders that the Federal Reserve is willing to start reducing rates again.” The construction industry continues to absorb higher expenses on two fronts, namely construction costs and elevated borrowing costs. These dynamics compound delays, especially for revenue-dependent projects, said Guckes. “Higher rates are negatively impacting net operating income expectations for current and prospective developers and owners,” said Guckes. “Higher rates also elevate construction and operating costs all along the supply chain from building product manufacturers to general contractors and trade contractors when they are borrowing capital for their operating needs.” That pressure has forced developers to revisit the viability of certain work. Several projects in planning stages relied on expected rate cuts in the first half of 2025, said Schmidt. “Projects currently in the planning phase might have financial projections based on certain interest rate assumptions,” said Schmidt. “Those assumptions may no longer hold water, which could result in those projects to be put on hold or potentially scaled back.” Contractors want a sign Despite these headwinds, economists say just a tone shift could ignite construction activity. “If nonresidential builders knew there was light at the end of the tunnel, they could start planning projects in a more robust manner sooner,” said Schmidt. But uncertainty may not deserve all the blame, said Ken Simonson, chief economist at the Associated General Contractors of America. He said current interest rates, not the lack of clarity, were the core challenge. “The rate itself, not uncertainty about it, has held down construction of income-dependent projects,” said Simonson. “The higher cost of funds means owners must charge higher rents or room rates for a project to pencil out.” At the same time, inflation continues to weigh on expectations. Rising input costs for materials add another layer of uncertainty for contractors’ books. “We saw a lot of inflation facing contractors purchasing intermediate goods,” said Basu. “That ultimately can be an indication that eventually we’re going to see even more construction inflation going forward.” The result is a cautious outlook for the second half of 2025. Contractors still hold strong pipelines today, but many are increasingly indicating the math looks tougher the further out they go. “To move forward with a construction project requires a certain level of certainty on the part of the project owner,” said Basu. “We don’t have that right now.” Read More

Skip to main content An article from The Stockholm-based firm’s success in U.S. construction continues to anchor its success, according to a second quarter earnings report. Published July 21, 2025 A rendering of the planned Fazer chocolate factory in Lahti, Finland, to be constructed by Sweden-based contractor Skanska. Courtesy of Skanska/Sweco Fazer This audio is auto-generated. Please let us know if you have feedback. Remaining selective and planning for risk have been key to Skanska’s profitability. CEO Anders Danielsson said the firm has been more discerning about only taking on projects and clients in sectors where it has seen success in the past. “We took important strategic positions some years ago to be more selective,” Danielsson told Construction Dive. “We have the right team in place.” The chief of the Stockholm-based contractor spoke to analysts during a second quarter earnings call July 18, where the results showed that U.S. construction has continued to be the anchor of the firm’s success. However, continued changes around tariffs have raised questions on pricing for materials, and that uncertainty has impacted project timelines and the ability for contractors to break ground. Danielsson said Skanska has seen minimal impact from the tariff policy thus far, and remained bullish for the future. In part, that success is due to sourcing U.S. materials, he said, noting he hasn’t seen increased competition for those domestic products. Anders Danielsson Courtesy of Skanska “We haven’t seen a lot of [impact from tariffs], but we are careful to not to end up in a situation where we suffer from, like price increases,” Danielsson told Construction Dive after the call. “And so we are very careful before we bid for a project, we secure the prices from our suppliers.” When price hikes do arise, Danielsson said Skanska has had success passing the difference back onto the client. As an example, he cited the firm successfully doing so when construction costs spiked during the COVID-19 pandemic. Priority sectors Within construction, the U.S. civil market remains one of the major success areas for Skanska. Danielsson anticipates “strong demand for traditional infrastructure” in the states. He cited confidence for public funding to continue to flow to critical sectors such as schools, hospitals, airports and data centers.  In recent earnings reports, a sticking point for the firm has been commercial property development, especially as workers in the U.S. largely continued to work from home following the pandemic.  Though the firm’s outlook on commercial development for the next 12 months remains weak, Danielsson said a shift to quality, where companies target nicer offices in more attractive areas, continues to show promise. “I’m sure most companies want their employees back to office,” Danielsson said. “So that trend will continue.” By the numbers Skanska’s Q2 operating income was 1.8 billion Swedish crowns ($186 million USD), a roughly 30% decrease for the same period in 2024. Much of the firm’s income came from construction — 1.7 billion crowns — with nearly half of that number attributed to its U.S. business. Backlog remained high for the firm, though it was down slightly from a high point in Q4 of 2024. The firm had 268 billion crowns worth of work on its books at the end of the quarter, with 26.5 months of construction work in the U.S. alone. Read More

Skip to main content An article from High-profile criticism of some $700 million in cost overruns is said to be an effort to pressure Jerome Powell to quit. Published July 21, 2025 Chair of the Federal Reserve Jerome Powell testifies during a Senate Banking Committee hearing in 2024. Powell has come under criticism recently for his handling of renovations at the Fed’s Washington, D.C., offices. Bonnie Cash via Getty Images First published on This audio is auto-generated. Please let us know if you have feedback. Cost overruns incurred by the Federal Reserve on the renovation of its headquarters and two other buildings it owns in Washington, D.C., are the kind of thing building owners frequently deal with when undertaking complex construction projects but Trump administration officials are giving them a high-profile examination, The Wall Street Journal reports. The agency in 2019 said it was spending about $1.9 billion on the renovations but that cost ballooned almost 35% to $2.6 billion after the agency switched gears on aspects of the sprawling project, the Journal said.  Among other things, the agency added high-cost below-ground square footage to its office building adjacent to its historic headquarters to offset space it lost after the U.S. Commission of Fine Arts asked it to nix plans for a five-story tower addition. That commission and the National Capital Planning Commission share jurisdiction for reviewing building plans in Washington.  The Fed building under construction Michael M. Santiago via Getty Images Once construction began, the general contractor came across unexpected asbestos in the building, toxic soil contamination and a higher-than-expected water table, the Journal said.   Inflation was a problem, too. Budget documents released at the end of last year showed “significant increases” in the cost of steel, cement, wood and other materials that “far exceed standard cost escalations,” the Journal reported.  There was also a costly disruption when the agency fired the original architectural and engineering firm it had hired to work on one of the buildings after the Fed’s inspector general called out the firm’s performance.  Academics and others are concerned the Trump administration is using the cost overruns to shine an unflattering spotlight on the Fed chair, Jerome Powell, whom President Trump has said he’d like to replace for his unwillingness to lower interest rates. Powell was appointed by Trump in his first term and is slated to serve until his appointment as chair ends in May 2026.   “We are in a high-stakes moment in the history of the Federal Reserve,” Peter Conti-Brown, a Fed scholar at the University of Pennsylvania, said in a July 11 Journal report. “It seems clear to me that the Trump administration, using various mechanisms, [has] now cooked up a post-hoc explanation for Powell’s removal.” The White House budget director Russ Vought blasted the overruns in a social media post earlier this month, calling them double the cost for renovating an ordinary historic federal building, at $1,923 per square foot. He reproduced a letter he had sent Powell questioning the veracity of testimony the Fed chief had given earlier in June in a Senate hearing. Among other things, Vought questioned why the Fed chief didn’t notify the National Capital Planning Commission when it decided to replace the five-story addition with the below-ground space.  Powell responded with a letter saying the commission had no financial oversight over the project so the Fed wasn’t required to give it notice.  A Fed official later told the Journal the Fed’s external building manager hadn’t advised the agency that any of the planned changes needed to be submitted to the commission.  At the time of the exchange between Vought and Powell, the administration appointed to the planning commission several Trump advisors, including White House Deputy Chief of Staff Michael James Blair, who in mid-July likened Powell to Marie Antoinette on social media for what he called design excesses in its plans.   “Let them eat basis points,” Blair posted.  “At a time when the Fed is running an operating deficit, maintains high interest rates, and is receiving significant public scrutiny, one has to wonder whether the so-called ‘Taj Mahal near the National Mall’ project is in the best interests of the board & the public it serves,” Blair said in another post.  The excesses Blair and other critics were looking at included a “high-gloss finish” on the five-story addition that was later abandoned, according to the Journal.   Looked at in its most negative light, the public grilling and criticism could be a “dangerous step toward manufacturing a legal justification for Powell’s removal,” said the Journal, paraphrasing Conti-Brown.  Lawmakers have warned against firing the Fed chair. “The consequences of firing a Fed chair … will be to undermine the credibility of the United States going forward,” Sen. Thom Tillis (R-N.C.) said on the Senate floor earlier this month. “If it happens, you are going to see a pretty immediate response, and we’ve got to avoid that.” The U.S. Supreme Court in May indicated in a ruling the president can only fire the Fed chair for cause – typically dereliction of duty or malfeasance in office, according to academics – and Trump has said, although he’s unhappy with Powell’s performance, he’s unlikely to seek his dismissal. The ruling concerned the president’s authority to fire other officials but singled out the Fed chair as an exception.   “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States,” the ruling said.   But given their high profile criticism directed at the renovation project, Trump officials appear to be trying other means to coax Powell out, according to the Journal.  “The building brouhaha echoes an effort by President Richard Nixon ahead of the 1972 election to put pressure on his Fed chair, Arthur Burns, to keep interest rates low by planting a false story in the press that Burns was seeking a pay raise at the same time he was proposing national wage and price controls,” the Journal

This audio is auto-generated. Please let us know if you have feedback. The Trump administration laid out its infrastructure priorities last week — key among them permitting overhaul and speeding up construction.  “We want to streamline the rules and regulations around what you do as much as possible,” Transportation Secretary Sean Duffy said Thursday during an infrastructure conference, ahead of Congress’s Surface Transportation Reauthorization process later this fall.  At the conference, Duffy signed an agreement with the Texas DOT that allows it to take more ownership of environmental permitting requirements, in an effort to help the state build infrastructure projects faster and to serve as a model for other states. Duffy also said he will work with Congress to adequately fund the country’s highway system and spoke on the removal of Biden-era DEI initiatives. Duffy’s “America is Building Again” agenda includes, according to the Thursday DOT release: Enhancing transportation safety. Accelerating project delivery for transportation projects, by “reforming the National Environmental Policy Act and permitting, enhancing One Federal Decision and increasing the use of technology.” Investment in transportation infrastructure that promotes economic growth, including more private sector investment. Strengthening partnerships with states and other stakeholders. The DOT also announced $488 million in funding through the BUILD program for 30 infrastructure projects across the country, ranging from bridge replacements to flood resiliency efforts.   NEPA changes ahead In a letter that same day, Duffy urged governors nationwide to assume NEPA responsibilities and take the lead on project delivery. Historically, federal agencies have been responsible for conducting environmental reviews and preparing documentation. “Driving project delivery efficiencies through regulatory streamlining is one of the top priorities [of the DOT],” the letter reads. “That is why I am writing to encourage your State to take advantage of unique statutory authority and assume the Federal environmental review process under the National Environmental Policy Act.” Duffy also cited NEPA authority when asked about the Trump administration’s priorities at the surface transportation reauthorization hearing July 16, saying that the bedrock law is “costing too much and taking too long.”  “We’re actually using our unique authority for procurement that’s not been used in the past. We are getting CEO engagement with us on this,” Duffy said in the hearing. Rep. Daniel Webster (R-Fla.) testified that most rail projects take place under existing right-of-ways and asked if routine maintenance and replacement infrastructure projects could be eligible for categorical exclusion under NEPA.  “That’s a broad question, but with balance, yes, I do think they should fall under categorical exclusion,” Duffy said. Infrastructure changes The most recent surface transportation reauthorization was included in the broader Infrastructure Investments and Jobs Act, which expires in September 2026. Congress is hashing out replacement legislation. At the reauthorization hearing, Duffy said the DOT wants to focus on innovation and “the efficiency with which we can deliver these projects.” When Rep. David Rouzer (R-N.C.) asked about potentially consolidating newer, smaller IIJA programs, Duffy was in agreement and said he wants to simplify the department’s grant process altogether. “We have like 12 different programs in regard to grants, and then tech and programming and computers. Everything’s different, all under DOT. We want to consolidate, and so we can have a dashboard where all of you can see where your grants are, your constituents can see, ‘where’s my grant, how fast is it moving?’” Duffy said. Webster also asked Duffy whether the creation of a federal infrastructure bank, that would levy only private investment, could supplement current federal funding tools. “I do think there is a role for private capital to play, I would agree with that,” Duffy said. “A lot of the private capital I do see coming in is foreign private capital, and it would be nice to see more American private capital because some of these returns are pretty good.” Rep. Chris Pappas (D-N.H.) asked about the mass layoffs at the DOT and other transportation agencies, noting that the Federal Highway Administration has seen a 26% reduction in force since May, according to Reuters. Pappas noted many DOT offices were already understaffed, and expressed concern that they don’t “have enough staff to fulfill their critical mission to our state DOTs providing front line assistance and transportation project development and delivery.” Duffy responded that the agency “preserved all of the critical safety positions,” adding, “We’re trying to do more with less, and if we’re ineffective and we need more people on board to make sure we accomplish the mission, I’ll bring them in.” Other takeaways Rep. Jesus Garcia (D-Ill.) requested support of the Disadvantaged Business Enterprise program, which increases the participation of certain small businesses in federally funded transportation projects, and asked Duffy not to defund Small Business Transportation Resource Centers, which provide DBEs with technical assistance and advice. “If you want preferences for race and sex, I think that’s not constitutional,” Duffy responded. Duffy also indicated conditional support for rail projects, noting that numerous rules and permits drive up the cost of building them in the U.S. versus elsewhere. The agency said Thursday that it was pulling $4 billion in unspent grants for the California High-Speed Rail and may seek to claw back previously awarded funds, according to Smart Cities Dive. “I’m open — you give good money to invest in high-speed rail, I want to see a project that we can do it,” Duffy said. “I’ve been tentatively supportive of LA to Las Vegas, and want to see how they do. There were conversations about Dallas to Houston.” Rep. Dusty Johnson (R-S.D.) said he planned to introduce a bill that would ban federal transportation dollars for states that don’t comply with Immigration and Customs Enforcement agents — something a judge in June ruled illegal, according to CBS News. “I couldn’t agree with you more, if you allow your city to be burned, or even in LA when we’re allowing riders to destroy our streets, the federal taxpayer should not come back and then rebuild that when they allow it to be destroyed,” Duffy said.

Succeeding in the construction industry takes hard work. Construction business owners often need to overcome obstacles such as over-budget projects, difficult client demands and cash flow issues. The companies that survive aren’t just lucky. They’re strategic about how to grow their construction businesses and their banking choices. In this article, we’ll cover 6 ways you can level up your business strategy for growth. 1. Optimize project management and efficiency Inefficiencies on a construction job can eat away at your profit margin. This includes hours wasted, miscommunications, delayed deliveries and incorrect estimates for materials and supplies. The construction companies winning today know the value of good project management. Modern project management software and Building Information Modeling (BIM) tools help eliminate project hiccups. Use them to understand projects, schedule resources, track progress and identify bottlenecks before they become expensive problems. 2. Diversify your service offerings Construction companies focusing on a single service can lose revenue if that service is no longer in demand. Diversifying your offering can help you avoid slowdowns when the market shifts. Smart construction companies expand into complementary areas, like light commercial work, HVAC, or electrical work. This can be done by hiring specialists or engaging subcontractors. 3. Strengthen your subcontractor and supplier relationships Building subcontractor relationships can facilitate faster growth and help you scale. You can strengthen those bonds by paying your invoices on time, treating workers fairly and ensuring your needs are communicated clearly. The same rules apply to your suppliers. Like employees and subcontractors, they are essential to your success. Mistreating subcontractors can cause project delays. Paying suppliers late can bring work to a standstill. In construction, better relationships translate into better pricing, on-time or early project completion and higher quality work—which will improve your business’s reputation. 4. Invest in equipment and technology Modern construction equipment is faster, more efficient and can deliver a positive return on investment by increasing the amount of work that can get done, even if the price is high. How you invest can separate your company from its competitors. Using capital reserves to pay cash for new equipment is okay if you have a large surplus, but most companies are better off taking a construction loan for long-term project planning. This preserves cash on hand and allows you to fund a project that will make back the money. 5. Master your marketing and build a business development plan Marketing and business development shouldn’t be add-on tasks for your business. They must be a regular part of your operations. Effective marketing starts with targeting your ideal customer. If your specialty is residential construction and renovations, don’t waste your efforts on commercial contracts. Many companies create customer profiles to get a better understanding of who to target. Other firms rely heavily on referrals from existing customers. You can download an in-depth free guide with digital marketing tips to help you market your business, or check out some marketing strategies for construction businesses. 6. Prioritize employee training and retention Skilled workers have rarely had the same job opportunities they do now. Prioritizing employee retention saves you money and ensures high quality employees will stay. Competitive compensation can’t hurt either. And remember: every time a worker leaves, you need to recruit and train a new person to cover their job. By investing in employee training and creating retention programs, you can build a better company culture and take on more complex projects. What could be holding your construction business back? Most of the obstacles that hold you back are the result of poor business decisions. Bad project management creates delays, using outdated technology and equipment makes you less competitive and insufficient marketing makes it difficult to maintain steady revenue streams. While proper financial planning can make obstacles easier to overcome, it needs to be consistent to preserve the long-term health of your company. Limited access to lending and inefficient cash flow are also common obstacles construction companies face. If you’re looking for a flexible, reliable banking solution, we recommend checking out Bluevine, the largest small business banking platform in the U.S. 1 With Bluevine, you can access a high-yield checking account, powerful bill pay and flexible business lines of credit all in one place. 1 As compared to publicly available data on the number of lifetime customer accounts held by other U.S. banking platforms dedicated to small business, as of March 2025. Read More

Guidance agreed by the Building Safety Regulator (BSR) gives new details on how developers can submit partial designs at gateway two if they can still prove their buildings will comply with Building Regulations. The guidance, released today by the Construction Leadership Council (CLC), provides wording describing the Approval with Requirements route for building control applications for higher-risk buildings. This little-known route has been available for some time, although awareness among developers and housebuilders is understood to have been patchy until now, with no written guidance on the matter until today. The guidance says: “The baseline to any Approval with Requirements approach is that the initial building control application needs to show sufficient information to allow the BSR to be satisfied that the finished building can and will comply with the Building Regulations even though certain aspects remain outstanding at that time.” Designs need to be taken to a point where the requirements of Building Regulations are met, “without having to have a particular product specified or absolute final detailed drawings/documents provided”, according to the guidance. “Approaching design in this way also aims to ease the regulatory burden on both the applicant and BSR by reducing the need for multiple change records and approvals that would be otherwise required during the construction phase,” it adds. It remains illegal for any work to commence before a full design is submitted for each specific element of work and approved by the BSR, the guidance says. The document stresses that although Approval with Requirements provides “some flexibility”, it should only be used: on applications containing a minor error or omission where “BSR is satisfied that it can be dealt with by a simple agreement with the applicant” where the applicant provides a clear and comprehensive application that demonstrates that the building will comply with Building Regulations and includes a plan for submission of further Approval with Requirements design, including a timeline for delivery “Approval with Requirements cannot be used to obtain approval to proceed with inadequate design,” the guidance says. “Such applications will be rejected.” One fire safety expert told Construction News: “Approval with Requirements is potentially a very useful approach that could really help the Gateway 2 process. “Until now, there has been very little awareness of it – it hasn’t really been publicised very much and there has been no documentation on situations where it would apply and how to use it.” The guidance also includes detailed instructions on the format, file structure and naming conventions of documents submitted as part of BSR applications. It also recommends that applicants contact the BSR before submitting a staged application where building work is divided into different stages. Work on the new guidance was led by Karl Whiteman, Berkeley Group divisional managing director and industry sponsor for the CLC’s Building Safety Workstream. He said: “The CLC has worked closely with the BSR and a broad range of leading technical experts from across the sector to develop robust and practical guidance for gateway two applications. “This will help to improve the quality of submissions, ensure the regulator can approve them swiftly and consistently, and enable the sector to increase the delivery of safe and high-quality homes.” Tim Galloway, deputy director at the Health and Safety Executive, within which the BSR sits, said: “Applications that clearly demonstrate compliance are approved faster, and everyone in BSR wants those designs and plans off the page and onto site as quickly as possible.” Read More

Technical and energy services contractor Dalkia UK saw its profit plummet despite surging demand in the nuclear and energy sectors. The London-based firm – a subsidiary of French state-run energy provider EDF – tabled a pre-tax profit of £312,000 in the year to 31 December 2024, down from £21.5m the year before. However, a £15.8m loss from continuing operations in 2023 was offset by a profit of £37.3m from discontinued operations. These included its Suir Engineering business in Ireland, sold in January that year to private equity group Duke Street for £69.2m. Dalkia UK chief executive Gautier Jacob confirmed a “strong sales performance” in 2024 “despite some headwinds in the UK construction market in the context of high inflation and interest rates”. Turnover also increased to £609m, up slightly on the previous year’s £607.2m total (including £25.4m from discontinued operations), as Dalkia met its strategic objective to reach a turnover of £600m in 2024. Dalkia’s cash at hand grew from £42.6m to £55.6m, although its annual dividend payout fell from £44.3m to £6.8m. The firm’s workforce edged up from 4,019 to 4,064 staff, and its annual wage bill rose by 2 per cent to £204.3m. Jacob said growth in the UK’s engineering sector had been “concentrated in our strategic sectors, with a notable expansion in the nuclear and energy sectors”. The CEO also confirmed a “limited number of legacy projects” had continued to have an impact on Dalkia’s profit in 2024. While he did not elaborate, last year Dalkia reported a number of onerous contract losses from projects in Scotland and the Midlands. The company did table a provision of £6.1m for loss-making contracts at the end of December, although the total was much lower than the £14.5m provision at the beginning of the year. The contractor has also fully incorporated Spie UK into its business after it bought the firm for £43m in December 2022. Spie has since been rebranded as Dalkia Operations. More than £1m in fees was paid to integrate Spie in 2024, comprising £1.1m of integration costs and £109,000 of redundancy costs. In the previous 12 months, it spent more than £1.7m on integration and redundancy measures. Over the course of the year, Dalkia repaid a £15m loan to EDF Energy. Jacob said he expected the business to “perform financially and operationally in the years to come” thanks to the “size and quality of our order book”. At the end of 2024, Dalkia’s forward orders totalled £1.1bn. In the latest edition of the CN100 ranking, Dalkia was the UK’s 26th biggest contractor. It was also the biggest mechanical and electrical contractor in the UK. Read More

A key report has demanded further work on two models used to deliver major water infrastructure projects after the construction industry raised concerns. The Independent Water Commission recommends that a new single regulator should continue to “address issues” with the direct procurement for customers (DPC) and specified infrastructure projects regulations (SIPR) systems. Delivered by former Bank of England deputy governor Sir Jon Cunliffe for environment secretary Steve Reed, the report also calls for a review of the two models in 2030. The commission cautions against introducing further changes to the systems “without significant consideration”. DPC was introduced by Ofwat in 2019 and has been the default procurement model for schemes worth over £200m since 2024. It sees a competitively appointed provider selected to design, build, finance and sometimes operate and maintain water infrastructure. SIPR was brought in more than a decade ago but can only be used in specific situations. The Tideway super-sewer in London is currently the only scheme to have used this model, which licenses a third party to deliver construction work and be regulated directly. Ministers have outlined proposals to relax the criteria for SIPR, and Ofwat has proposed three more projects be delivered through the model including £5bn worth of reservoir building in Lincolnshire and Cambridgeshire. The commission says it is supportive of government plans to allow more schemes to use this process but that it “would caution against introducing further changes beyond existing plans without significant consideration”. It adds: “Letting current regulatory changes become embedded and subsequently reviewing how pipeline projects are progressing would be a pragmatic approach for this nascent market.” Sir Jon said Ofwat was carrying out work to reduce the administrative burden and cost of delivery through DPC. The report says: “Concerns have been raised by construction companies that Ofwat and water companies may not yet have enough experience of DPC to progress projects without delays. “Concern has also been expressed over the costs of setting up SIPR projects, which can reportedly go into several hundreds of millions of pounds.” The commission says a new regulator should “continue the essential steps that Ofwat is taking to address issues with DPC and SIPR”. It adds: “A full evaluation of both schemes should be undertaken in five years when a broader evidence base has been accumulated. The commission recognises that given different views on the benefits of DPC and SIPR, the Welsh Government may decide not to pursue these reforms. “As further schemes move through the DPC and SIPR pipeline, additional lessons may emerge including around whether government support packages are needed to address exceptionally high tail risks that can most appropriately be borne by the public sector.” Sir Jon called for a new regulator to “combine the functions of Ofwat, Drinking Water Inspectorate and water functions from the Environment Agency and Natural England”. Ed Evans, director of the Civil Engineering Contractors Association Wales, said: “Rebuilding public confidence in the water sector is essential, and we welcome the Independent Water Commission’s recommendations, which are laser-focused at improving performance, transparency and environmental outcomes.” An Ofwat spokesperson said: “The Cunliffe Report sets out a new direction for the water sector. “While we have been working hard to address problems in the water sector in recent years, this report sets out important findings for how economic regulation is delivered, and we will develop and take this forward with [the] government.” A spokesperson for trade association Water UK said: “Everyone agrees the system has not been working. Today is a major moment and this fundamental change has been long overdue. “Crucially, it is now up to the government to decide which recommendations it will adopt, and in what way, but the commission’s work marks a significant step forward.” Read More

Huw Jones is executive director, infrastructure at Bam UK & Ireland A couple of weeks ago, the government unveiled its 10-year Infrastructure Strategy setting out its ambitions to spend £725bn over the next decade. The strategy, announced by chief secretary to the Treasury Darren Jones, sets out a long-term plan for how the government will invest in infrastructure and ensure that funding is spent effectively and efficiently. “This long-term view enables better planning, smarter procurement and stronger partnerships between the public and private sectors” For too long, infrastructure planning has been constrained by short-term political cycles. This strategy marks a turning point. It provides the certainty the industry needs to invest in innovation, skills and productivity – knowing that the work we do today will be supported and sustained over the long term. Even a 1 per cent increase in productivity across major projects can deliver significant gains to UK GDP, and the Infrastructure Strategy gives us the platform to achieve that. This long-term view enables better planning, smarter procurement and stronger partnerships between the public and private sectors. It will also ensure that infrastructure investment leaves a lasting legacy – energy resilience, housing support and meaningful career opportunities for many across the UK. Importantly, a visible and consistent pipeline allows us to invest in people. It enables us to grow apprenticeships, support early careers and create re-entry opportunities for those returning to the workforce. These are the foundations of a more inclusive and sustainable industry. However, these are also steps we need to take to make our sector more attractive to the next generation of workers and address the 250,000 skilled worker shortage our industry is facing. Offering greater working flexibility and supporting people who have been on an extended career break are both important steps to making our sector more attractive to more people. Developing skills The government recently announced £1.2bn in funding to support over one million young people into training and apprenticeships – this initiative will certainly help the industry recruit a substantial number of young people in various roles in construction. It is very important that part of the focus is on creating long-term employment opportunities and developing the skills that the industry needs for now and the immediate future. A coordinated, cross-sector approach also means we can focus resources where they will have the greatest impact, whether that’s supporting the government’s five strategic goals, accelerating housing delivery, or strengthening our energy resilience in an increasingly volatile geopolitical environment. A key enabler of the infrastructure pipeline will be vital improvements to the planning and consent for major infrastructure programmes. The government will need to ensure that the correct regulatory environment is established to enable the delivery of the UK’s infrastructure pipeline. We also welcome the government’s recognition of the need to reform the planning and consenting processes. A streamlined regulatory environment, combined with smarter procurement and risk allocation, will help ensure that public investment delivers maximum value.  The Competition and Markets Authority’s market study into the design, planning and delivery of railway and public road infrastructure projects, which complements the Infrastructure Strategy by helping to identify and remove barriers to efficiency and innovation, is another important step. Finally, we see the Infrastructure Strategy as a catalyst for deeper collaboration between the public and private sectors. A stable pipeline will attract private capital, and we look forward to working with the government to develop investment models that deliver long-term returns for UK society. This is a moment of opportunity – and contractors are ready to play their part. Read More

Plans dating back more than 85 years to build the £500m Thames Gateway Bridge have finally been axed to free up land for development. A safeguarding order protecting land around the proposed bridge has been lifted by transport minister Simon Lightwood. In a written statement to parliament last Friday (18 July), he said the move reflected the government’s commitment to ensuring transport and infrastructure supports housing delivery and drives growth as part of its Plan for Change.  He said the outdated order had been an “obstacle” to vital development and was no longer needed as London’s transport needs were now different following major investments in London’s river crossings – notably the Dartford Crossing and the Silvertown Tunnel. “Safeguarding is an important planning tool used to protect land for future transport schemes from conflicting development,” Lightwood said. “It was intended to protect land for a road crossing that has not been delivered. Since then, London’s transport priorities have evolved.  “The safeguarding directions therefore no longer align with the direction of transport policy or the evolving needs of this part of London. “The continued safeguarding of this land has been an obstacle to much-needed development, and I am therefore lifting these directions.  “The government is keen to deliver new homes and unlock economic opportunity, and we are taking steps to remove unnecessary barriers to progress.” In May, the Crown Estate and Lendlease signed a £24bn partnership to develop housing, as well as science and innovation districts, across the UK. The partners said the programme would deliver 26,000 homes, of which about one-third would be classed as affordable, and up to 930,000 square metres of laboratory and workspace. Sites named for development include areas around Euston station, Thamesmead Waterfront and Silvertown in London. The idea for the Thames Gateway Bridge was first raised in the 1940s, and in 2004 it was proposed once more with preliminary planning permission, but in 2008, Boris Johnson, Mayor of London at the time,  cancelled the scheme. In 2009, a scaled-down version was proposed but this too was axed in 2016. Read More