Heathrow Airport move signals UK ‘open for business’

Britain’s construction industry was today celebrating an £18 billion bonanza after the Government selected Heathrow to build a third runway in the South-East.

London-headquartered engineer Arup and construction firm Mace, US consultant CH2M and Leeds-based consultancy Turner & Townsend are the four preferred contractors set to receive the first tranche of Heathrow’s £18 billion runway expansion works, selected by the airport in March so it was ready to break ground as soon as a decision was made. They will help the airport to tender the construction work, organise the supply chain and assist with project management.

Yet only hours after the announcement was made, fears were already being voiced about a construction skills shortage in post-Brexit Britain as a confluence of major infrastructure projects get the green light amidst major uncertainty over the future of the labour market.

Mace’s chief operating officer for major programmes, Jason Millett, admitted the scale of Heathrow’s runway construction “will raise eyebrows in terms of how many people we need and where we’re going to get them from, with so many big infrastructure projects going on” in post-Brexit Britain. He added however that: “At least we have certainty about needing people now — there is a skills shortage and we need to invest more in training apprentices and graduates, and this is a long project which gives us an opportunity to deal with that.”

Economists have already questioned whether the UK can afford some £400 billion worth of projects in the pipeline — including High Speed 2, Crossrail 2, Hinkley Point and expansion at London City airport — amid economic uncertainty after the EU referendum.

But the City today said that the green light for Heathrow, led by John Holland-Kaye (pictured) came at a “vital moment” for the construction sector: “Nothing does more to say that Britain is open to global trade post-Brexit than this,” said Neil Wilson at ETX Capital.

He voiced concerns that the £18 billion project could face employment difficulties. “There could be a shortage of skills — for now we can call on the entire EU to fill those gaps, but what will happen after?”

One industry that’s likely to benefit immediately from today’s runway announcement is the legal sector. Liz Jenkins, partner at Clyde & Co, warned contractors “to put the champagne on ice as there is likely to be a number of legal hurdles to overcome before any shovels can break ground”.

Heathrow’s City lawyers include Berwin Leighton Paisner, Allen & Overy, Freshfields, Herbert Smith and Pinsent Masons.

Howard Seymour, director of building research at Numis Securities, warned listed construction firms would be unlikely to benefit for some time.