AUTHOR

Richard Bonner
Richard Bonner
Northern Cities Director
Northern Cities Director

Addressing how the public and private sectors can ambitiously collaborate to realise the potential of Greater Manchester and level up the towns within the region

October saw the latest in our series of roundtable discussions considering the impacts of rising construction costs. Held at the Kimpton Clocktower Hotel in the centre of Manchester, we invited several senior executives operating in the construction sector across Greater Manchester to discuss and consider how we can continue delivering the major infrastructure and construction projects the region needs in the face of seemingly multiplying cost challenges and threats to the levelling up agenda.

It was great to chair the session, alongside my colleagues Simon Rawlinson, Arcadis’ Head of Strategic Research and Insight; Richard Jones, Senior Technical Director at Arcadis; and Ellen Freegard, Associate Project Manager at Arcadis. Simon introduced Arcadis’ International Construction Costs (ICC) 2022 report which was released earlier this year and looked at how rapidly rising construction costs across the world are impacting how we make projects deliverable and effective. We considered the overall sector challenges and opportunities, and how these have developed over the course of the year in the wake of the impacts of the Ukraine conflict and the resulting energy crisis. This was followed up by Richard Jones who shared his perspective on the regeneration and development challenges in Greater Manchester, and the wider North West, in the context of the report.

The roundtable was also attended by a diverse range of high-level regional stakeholders from across Greater Manchester, including developers, contractors and the key players in the science and technology arena, including Avison Young, Bruntwood, Graphene@Manchester, Business of Science and Capital & Centric.

The rise of construction costs in Greater Manchester and beyond

While by UK standards, Manchester ranked below London and Bristol as the most expensive cities for construction in the world, Manchester still ranked 14th globally in the 2022 ICC report. This has resulted in great strains placed on supply chains and as Richard Jones emphasised “we are in turbulent times”. In light of this, we were keen to explore how private sector investment can be best catalysed to level up the region, by not just delivering on opportunities in the region’s prime cities but also in surrounding towns such as Oldham, Stockport and Trafford. In order to achieve this, the sectors within industry must collaborate more ambitiously and identify the necessary mechanisms to realise these ambitions and keep up momentum. The private and public sector must also maintain pressure on Central Government to ensure they get a fair deal and ensure the challenges don’t impose negative impacts on future developments in these towns and cities.

However, there was agreement that aspirations for the region are being put under significant strain by rising costs and the loss of investor confidence, as Tom Wilmot at Capital & Centric pointed out, we are now on the “verge of a banking crisis”. Bridging to this point, and linking to points on stranded assets by Chris Cheap from Avison Young, it is one of the concerns about how the transition to net zero and increasing cost inflation is creating a situation where in some locations there will be assets that have more viability challenges. Working with asset owners, investors, and the public sector to consider how this issue can be addressed as part of a place-based approach to regeneration is going to be increasingly important. This growing challenge in securing investment, and the associated costs, resulted in a discussion into how the sector operates with a people-centric approach and delivers social impact – Chris Cheap emphasised that “very soon you won’t be able to deliver and develop in Manchester unless you can deliver a proper social impact story”.

The room was in general agreement that sustainability efforts must not be compromised in the face of increased costs as it’s no longer optional but now hardwired into everything the sector does. In the ICC 2022 report, Arcadis set out its Five Point Plan to help navigate market volatility and a core part of the plan is ensuring a ‘less is more’ approach is followed, for example embedding circular economy principles throughout the project lifecycle, to ensure that sustainability goals are used in a way that keeps costs down too. These principles are actively being followed across Greater Manchester which has great strength around the production of advanced materials, thus reducing the need for imports in the long-term.

The potential for sci-tech and advanced materials in supporting redevelopment

Through its ‘Bridging the Gap’ programme, funded by the European Regional Development Fund, Graphene@Manchester is proactively engaging with SMEs in the region to enable them to explore and apply graphene and other advanced 2D materials in a wide range of applications and markets. James Baker, Graphene@Manchester’s CEO, discussed how in their work with these companies, they are supporting them to win investment and grants to take their projects forward – this has included a total of 48 companies who have spun-out/started up associated projects with graphene and 2D materials, five of these have received large sums of investment, and one of them has plans to open their first factory in Manchester.

Again, the major challenge in this space is investment but this is a key sector which can alleviate many of the pressures faced by the sector with the conflict in Ukraine placing high costs on construction materials. James Baker highlighted that these advanced 2D materials reduce supply chain challenges if used at scale.

Focus on the people-centric approach

Adding to the point around sector collaboration, emphasis was placed on the need to consider environment and people. Drawing on the innovation hub Nexus Leeds, Steve Bennett at Business of Science, said it is a “prime example of what a building and environment looks like”, as a community for both innovators and entrepreneurs.

Drawing on this point further, there was recognition of the importance of social value and engendering a sense of long-term loyalty among employees. By training up and investing in apprentices early on, the sector will thrive, and the increased level of skills will enable the sector to tackle the challenges it faces head-on.

Overall, there was a feeling of confidence in the room that the region was up to the challenge of maintaining progress through the turbulent times ahead, with a real focus on investing in the smaller towns surrounding the region’s prime cities. However, while the region has the materials and skills at its disposal, it is critical for the public and private sector to collaborate and for Central Government to provide greater clarity and put funding mechanisms in place.

AUTHOR

Richard Bonner
Richard Bonner
Northern Cities Director
Northern Cities Director