Looking back at 2015

As we enter a new year, NHBC Chief Executive Mike Quinton looks back at 2015 and how the housebuilding sector can expect to fare over the next 12 months.

It is very pleasing to be able to take stock and look back at what has been another positive year for our industry.

Continuing on from the favourable growth seen over the last three years, 2015 has maintained and improved upon existing new home levels with NHBC registrations showing another encouraging year.

Challenges

The year was not without its challenges and of course, we also experienced a very eventful General Election, with months of speculation in the run-up to May. However, much of the uncertainty for our sector, predicted by many around this period, failed to materialise with steady new home registration levels a constant feature through the whole year.

I know that NHBC, and other organisations within the industry, have continued to emphasise this message, but despite the upturn for UK housebuilding, collectively we must not lose sight of the fact that the country still has a drastic shortage of quality new homes.

Indeed, the issue of construction quality is paramount in all of NHBC’s work, engaging with the industry and its vast array of stakeholders to ensure build quality remains front and centre of this activity.

It is now, more than ever, especially clear to see from NHBC’s registration figures that the sector has partly recovered from the effects of the recession and to attempt to fully capitalise on this, we have been looking ahead at the new set of challenges on the horizon, with annual UK registrations almost back to their long-term average.

At NHBC, 2015 saw a major recruitment campaign to bring on board more highly-skilled inspectors and new senior roles to help oversee and manage the increasing new home volumes we are witnessing across virtually all parts of the UK, and also for the growth we hope to see in the coming years.

Additionally our new Major Projects Team, set to be based at our new London offices, will help support those customers building large, complex projects across the country but predominantly in the capital. These projects, overseen by a dedicated, experienced team, will often involve the use of innovative building techniques which are rarely seen in regular housing developments.

Landmarks

The year also saw the 30^th anniversary of NHBC’s Building Control service, which carries out more than 400,000 inspections each year across the country and the 10^th anniversary of our dedicated LQE service. The LQE team will be working on some notable sites over the coming year, including the landmark Priors Hall site in Corby, where 5,000 new homes are expected to be built over the next 20 years.

By evolving and tailoring our services, NHBC is able to offer an unparalleled range of inspection related provisions to our registered builders at this time of considerable growth in the UK new homes market.

Despite the many challenges the housebuilding sector continues to face, NHBC has been an effective partner in supporting the industry, working with builders to stay abreast of changes, and retain the right skills to enable the construction of high standard and quality homes.

As always, NHBC’s mission is to ensure construction quality of the very highest standard in new homes across the UK and that this emphasis on quality remains unwavering – particularly during periods of increased activity and production.

For many of us, it can appear that the demands and pressures for new homes are unrelenting. But, by planning ahead as we approach the end of a buoyant three-year period for the UK house-building industry, we can more easily help those builders face the next set of challenges, regardless of size or sector.

I sincerely hope that the next 12 months represents another productive and rewarding year for our sector and I feel that, collectively, we are well placed to ensure that this is the case.

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Design with metal theft in mind

According to the Office of National Statistics (ONS) the number of metal thefts has declined to 27,512 offences recorded in 2014/15, representing a decrease of 35% compared with 2013/14[1]. However, metal theft still costs the UK hundreds of millions of pounds every year and should therefore be considered in the design of new buildings. James Kelly, Chief Executive of the British Security Industry Association – the trade body representing the UK’s private security industry – looks at how construction sites can be protected against metal theft.

The potential targets of metal theft are endless, ranging from railway infrastructure, plaques on graves or memorials to lead piping or roof tiles on houses, criminals will target valuable materials such as lead or copper for their extrinsic value. Metal theft is an attractive proposition for criminals due to the relative ease of passing them on and making a quick profit. Such materials are considered to be easily recyclable lucrative commodities and the culprits often utilise these raw materials in order to generate new products.

Whilst there has been a decline in the number of metal thefts in recent years, partly due to the introduction of the Scrap Metal Dealers Act in October 2013 – which requires dealers to hold a licence to trade scrap metal – the ability for raw materials to be recycled, means that it is still not impossible for stolen materials to be sold on.

New buildings tend to utilise an array of different raw materials throughout the construction process. Therefore, designing a building with the risk of metal theft in mind can be extremely beneficial, potentially preventing the loss of valuable materials once the building is complete.

Security measures on construction sites should be implemented from the start of any construction process, being considered in the design stage, right through to the final phases of construction. Metals are perhaps most vulnerable during the construction process when materials can be left unattended for longer periods of times.

Covert Security

Many may have the impression that security measures consist of robust obstructions that are likely to compromise the aesthetics of a building; however, this is simply not the case. There are many covert solutions which can help protect the materials of a building, without affecting the building’s design. Many BSIA members have had direct experience of this sort of specification and have shown that effective security measures do not always need to be visible.

One BSIA member, Optex Europe, provided a solution to a rural church in Essex, in the form of wireless virtual perimeters. A series of detectors were installed along the roof, creating a perimeter without the need for obtrusive wires. If an intruder happens to cross over this perimeter, key holders are alerted and can respond accordingly.

Another BSIA member, GJD Manufacturing Limited, partnered with E-bound to develop an electronic wireless roof system comprised of passive infrared motion detectors in order to detect intruders. Over 350 of these systems have been installed on various churches and heritage sites across the UK.

In both of these examples, there has been a requirement for security which doesn’t affect the overall appearance of the building. But it isn’t just heritage sites that require these sorts of systems; many new constructions also require solutions that maintain a ‘clean’ look to the building. Covert perimeter security can be installed to fit all kinds of structures.

Marking materials

Another key method of protecting metals from theft is by having materials asset and property marked. By marking materials with a forensically coded solution, if stolen, the goods are rendered worthless by either their covert or overt markings. Security marking gives police the opportunity to catch and convict criminals, and consequently, return the stolen goods to their rightful owners. The process of property marking involves uniquely marking items using a permanent marking product, and subsequently registering that item to a secure national database. Police can then check this database to see if items that come into their possession have been registered stolen. Security marking can also act as a successful deterrent to thieves by placing signs around a building site clearly stating that property has been marked.

There are a wide range of marking solutions available, and BSIA members distribute a large proportion of the products in the UK that use forensic codes. In the interests of building aesthetics, there are a number of solutions that can be used which are invisible to the naked eye.

Whenever it comes to procuring any security product or service, the most important thing to consider is quality. Choosing a reputable security supplier is essential and will not only ensure that your site receives the best protection, but it can also prove more cost-effective in the long run.

BSIA members are subject to rigorous quality checks that ensure that they are operating at the very highest level, to find a reputable supplier for any security product or service, visit: www.bsia.co.uk

The BSIA’s website also hosts a variety of industry guidance publications, including guides on construction security and metal theft which are available to download free of charge.

 

[1] http://ift.tt/1kvxZhN

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A holistic view into your building’s energy efficiency

The Energy Efficiency Directive target of 20% energy efficiency must be met in 2020, meaning Irish building managers are feeling the pressure to make significant operational changes.

Transparency is key. By having a clear vision of how a building functions, managers can get a strong idea of how much energy is being used and where essential savings can be made.

Joe Crawford, product manager of Schneider Electric Ireland, discusses how having all the correct information in one place can make a world of difference.

 

Taking stock

With such focus on improving our building’s energy usage, the tide appears to be turning in the uptake of smart technology. A recent report published by IDC Energy Insights revealed that the global smart buildings solutions market is expected to reach an impressive €9.4 billion by 2016.

The prospect of installing smart or intelligent technology is still a daunting prospect for building managers. Budgets remain tight, meaning businesses are tasked with doing more, for less. In addition, a clear gap exists between the ability to extract and generate data to then translating it into actions.

Ireland’s commercial building owners need to carry out an energy audit of their operations every four years starting in December 2015, under the Sustainable Energy Authority of Ireland’s Energy Auditing Scheme. Taking stock of a building’s energy consumption has never been more pertinent.

 

Bringing data together

Many businesses monitor their building’s energy usage via a series of spreadsheets and disparate systems. This disjointed approach makes the whole process far more complex and time consuming than is necessary.

The notion that building managers should be looking at each building application, such as HVAC and lighting, as separate from entities is one that Schneider Electric is keen to dispel.

The only way to truly become more efficient is to take a holistic view of your building by gathering all systems together on one platform. This enables the end-user to have a complete overview of functionality.

To do this, data simply needs to be organised into relevant, actionable reports which are tailored to each particular user.

 

Holistic management

Today’s building management systems are able to draw information from all parts of the building, as well as from external and third party systems. This presents a truly integrated, holistic view at the touch of a finger tip.

Traditionally, this level of integration has come at a premium cost meaning that only larger enterprises have adopted such solutions. However, even with significant investment, it hasn’t been possible to fully integrate it into all existing system.

In order to address these challenges, BMS systems for medium to large sized buildings, need to combine engineering, installation and services, ensuring that all facilities are energy efficient and easily manageable.

Building systems must also include an easy-to-use interface. This allows data to be managed via a PC, smartphone or tablet, giving building managers complete control, even when they are away from site.

A key feature of this, is to provide the valuable information to the right people at the right time, maximising energy savings by clearly indicating areas for improvement.

These changes offer end-users the potential to optimise a building’s operational performance. They help to manage maintenance proactively, reduce energy bills and improve employee comfort.

By connecting systems together holistically, users are able to create a complete picture of a building on one easy-to-use platform. This connectivity is crucial, as paired technologies help to reshape and automate all operations – giving building managers a single pane of glass through which they can view all procedures.

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Considerate construction

Mike Petter, Chairman of the Considerate Constructors Scheme outlines why:

In today’s world, we’re continuously faced with a barrage of information, advice and guidance – much of which can often lead to confusion, rather than being helpful. The Considerate Constructors Scheme (CCS) has, reassuringly, a clear and simple objective: to improve the image of the construction industry and encourage best practice beyond statutory requirements.

The not-for-profit Scheme was established by the industry back in 1997, and has become the recognised force for improvement within construction. That’s a pretty important role given construction contributed £92Bn in economic output last year (6.1% of the total)*. Furthermore, the industry is forecast to grow by over 70% within the next 10 years. Great growth opportunities and playing a pivotal part in the nation’s economy are, however, met with steep and urgent challenges: construction faces a dearth of workers – over 200,000 more are needed in the next five years, women continue to be underrepresented, and there’s growing pressure on the environment in order to meet the demands of an ever-expanding population.

The industry recognises the Scheme’s impact on helping to tackle these challenges, so much so that it has become a tendering condition for a large number of publicly and privately funded projects.

How does it work?

The Scheme works through the voluntary registration of construction sites, companies, sub-contractors and suppliers. These organisations agree to abide by the Code of Considerate Practice. They are monitored by industry professionals on their performance in three areas of the Code: consideration towards the general public, the workforce and the environment. Every year, the Scheme registers around 8,000 sites and makes over 15,000 site visits.

 

*Construction industry: statistics and policy, House of Commons, 2015.                                     **Construction Skills Network Forecast, CITB, 2015.

 

By displaying Considerate Constructors Scheme posters around the site, companies can promote their registration. The posters also provide a name and telephone number of the site manager or company contact and a Freephone number of the Scheme’s administration office should any passers-by wish to comment. Registered companies and suppliers can also display a vehicle sticker or magnet, showing their unique registration number, on every company vehicle used on the public highway.

Striving for better

The best performing sites and companies are recognised at the Scheme’s annual National Awards programme. The awards range from the top achievement of ‘Most Considerate Site or Company’ through to Gold, Silver and Bronze Awards. Being an award-winner is a real badge of honour, and the achievement is highly revered across the industry.

Business benefits

There are a number of compelling cases for gaining CCS membership: it can often support winning new business and help with the planning process, by demonstrating commitment to adding social value, minimising inconvenience for local communities and disruption to the environment. In many cases, registration with the Scheme is mandatory for some clients and the vast majority of major contractors register all of the sites with the Scheme.

The advice and guidance provided during site visits has been instrumental in helping construction sites to become more efficient, whether it’s in how they communicate with their workforce through to developing stronger relationships with their supply chain.

Sharing best practice

With over 18 years of monitoring construction sites, the Scheme has collected a vast library of examples of best practice which exceed the requirements of the Scheme’s Code. Examples come from a range of organisations and project sizes, covering huge billion-pound projects right through to small scale building works. Earlier this year, the Scheme introduced the Best Practice Hub to share these examples with the industry. Any organisation can use the Hub and, once registered, can update it with their best practice examples, case studies and tips. 

The next generation

The Scheme plays a vital role in making construction an exciting, challenging and rewarding place for the next generation of employees. The Scheme developed the industry mascot, Ivor Goodsite, a costumed character for construction companies to use to engage with a younger audience to encourage safety on and around construction sites and to promote all that is positive about the UK construction industry.

The Scheme also works directly with secondary schools, colleges and universities to speak to young people to get the message across that the industry offers great career opportunities – whether its skilled technical careers on site or across fields including surveying, architecture, planning, finance, HR, marketing and management.

 

Considerate Constructors Scheme

Code of Considerate Practice

All organisations registering with the Scheme agree to abide by the Code of Considerate Practice:

• Care about Appearance- Constructors should ensure sites appear professional and well managed
• Respect the Community- Constructors should give utmost consideration to their impact on neighbours and the public
• Protect the Environment- Constructors should protect and enhance the environment
• Secure everyone’s Safety- Constructors should attain the highest levels of safety performance
• Value their Workforce- Constructors should provide a supportive and caring working environment

 

For further information about the Considerate Constructors Scheme visit ccscheme.org.uk.

 

 

 

 

 

 

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Creating habits for success

Four Strategies for Staying On-Track

By Michelle LaBrosse, CCPM, PMP®, PMI-ACP, Chief Cheetah and Founder of Cheetah Learning

What habits do you need to develop to become a more effective Project Manager? Maybe you need to get more organised with your paperwork, or change how you spend your time each day to stay on-track with your projects, or shift how you respond to stressful situations. Regardless of the kind of habit you’re trying to form, you might find that changing your day-to-day behaviour is more challenging that you expected. It may be the case that you’ve tried before to adopt this new habit, but somehow got derailed from your goal. For this month’s Know How Network, we’ll be discussing the best recent research on habits: what it takes to form a new habit, and what to do if you find yourself straying from your planned course of action.

Keep these strategies in mind when working to develop a new habit:

Don’t despair if you mess up once or twice. Especially when the habits we’re trying to adopt are challenging, it is unrealistic to think that once we’ve committed to adopting them, we’ll practice them every day without fail. Research shows that missing a day does not, in fact, have a significant impact on your ability to adopt a new habit. The crucial thing is to recover from the slip-up – fast. Missing one day is acceptable, but stretching this into five days will likely hurt your ability to make your new habit part of your automatic daily activity. Leave slip-ups in the past, and focus instead on what you have to gain by sticking with your goal of developing a new habit.

Be patient if the new habit still feels like a chore, even months later. Psychologist Jeremy Dean conducted original research on what it takes to make new habits and break old ones, and found that to do either almost always takes longer than the commonly-held perception of 21 days. Getting to the point where practicing a new habit (or losing an old one) feels automatic, he found, takes an average of 66 days. While adopting a simpler habit (like drinking water every day) may take less time, more complex or challenging habits (he gives the example of doing 50 sit-ups each morning) will likely take 80 or more days before they feel automatic.

Tell others about your new habit. This is also called “accountability.” For the purpose of creating a new habit, though, it’s not necessary to have a partner or group that really holds you accountable; what matters is that other people know about the habit you’re trying to develop, and will know if you break it. Just being aware that others will know if you don’t keep up with your habit is sufficient motivation for many people to stick with their goals.

Finally, celebrate small victories. Beating yourself up for missing a day or two in the practice of your new habit is more likely to be more de-motivating than it is to be motivating. A better strategy is to keep track of how many days you’ve successfully carried out your new daily habit and reflect on what you’ve gained by adopting this habit. If the gains from adopting your new habit are less immediate (as in a diet), you can further motivate yourself to stick with your habit by setting up intermittent rewards for yourself – so long as you choose a reward that doesn’t break the habit! Over time, as your habit becomes a more automatic part of your daily activity, the rewards become less necessary.

Following these tips will significantly increase the likelihood that you’ll successfully adopt your new habit to become a more effective Project Manager. And, as with all important projects, the best time to start is NOW.

 

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Payment Notices and Successive Adjudications: Update

By Peter Sheridan, Partner, Sheridan Gold LLP

 

As discussed in earlier articles, the sum due as an interim payment to a contractor is normally the sum that results from the employer’s payment notice and pay less notice, if any. But if the employer fails to issue either a valid payment notice or a valid pay less notice, the contractor is entitled to be paid the sum for which it applied. This situation arises as a matter of contract under the JCT Design and Build contract but also as a matter of statute (the Housing Grants, Construction and Regeneration Act 1996) (“the HGCR Act”) under construction contracts generally.

In ISG Construction Ltd v Seevic College (2014) and Galliford Try Building Ltd v Estura Ltd (2015), as described in earlier articles, Edwards-Stuart J’s analysis was that, where the amount of interim payment is fixed by the contractor’s application, the employer having failed to issue a payment notice or pay less notice, the amount applied for is deemed to be the correct valuation and is also deemed to be agreed. He decided it is not permissible to have a second adjudication, on the “true” valuation of that particular interim payment, when a first adjudication decides the sum payable on the basis of notices, although it would be possible to have an adjudication on the true valuation of the next interim payment.

One of the recent cases on payment notices, Harding v Paice (2015), has now been to the Court of Appeal. Harding, the contractor, claimed in an adjudication the payment said to be due following termination. This adjudication was decided purely on notices, i.e. that the contractor was entitled to the sum applied for, in the absence of a valid pay less notice. The court proceedings were concerned with Harding’s attempt to prevent a further adjudication, which Paice wanted to start, which would deal with the true valuation.

The trial judge, again Edwards-Stuart J (but before ISG and Galliford Try), had decided that Paice could go ahead with the further adjudication. In Harding v Paice the parties were concerned with the final payment position following termination, not an interim payment, as in ISG and Galliford Try. Although the temporary position is that the parties are stuck with the position established by notices at an interim payment, an aggrieved party is not permanently barred from having the correct valuation decided in a subsequent adjudication. With a final payment, or at least a payment due on termination, Edwards-Stuart J was of the view that there could be a subsequent adjudication on the correct valuation of the very payment already decided in adjudication on the basis of notices.

That is clearly correct in the writer’s view; what is much more in doubt is whether the different line taken by the judge in ISG and Galliford Try was correct in respect of interim payments. The Court of Appeal did not have to, and decided not to, look into whether the approach in those cases was correct.

Jackson LJ in the Court of Appeal noted that what was decided in the third adjudication was a dispute with two issues. The first issue was characterised as “contractual” and was the issue of the amount payable as a result of the operation of notices. The second issue was valuation, i.e. the true valuation on the merits (regardless of the position on notices). The adjudicator had made it very clear that he had decided only the first issue. What the Court of Appeal decided was that the second issue could still be decided in a further adjudication (upholding Edwards-Stuart J’s decision).

It is likely that the same approach would be taken in respect of a final payment (in a case with no termination). It remains unclear whether the payment notice provisions of the HGCR Act apply to final payment or payment on termination provisions; the Court of Appeal unfortunately gave no guidance on this.

Similarly, the Court of Appeal gave no guidance on whether, once an adjudicator decides the amount of an interim payment purely on notices, there can be a further adjudication on the “true” valuation of that very interim payment. If so, ISG and Galliford Try would be wrongly decided. That issue still remains to be considered by an appellate court. What one can say at this stage is that Jackson LJ’s clear distinction between the contractual and valuation issues does not fit well with the analysis in ISG and Galliford Try, which sought, with questionable logic, to blur this distinction for the interim payment in question (but for adjudication only, not the court) but to make the distinction in respect of any subsequent interim payment.

 

For more information, contact Peter Sheridan

Partner at Sheridan Gold LLP

T: 01737 735088

E: psheridan@sheridangold.co.uk

http://ift.tt/1JTmBCV

 

 

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Managing risk and compliance with fleet data

Road risk management should form an integral element of construction companies’ risk management strategies. TomTom Telematics Director UK & Ireland, Giles Margerison, explains how fleet data can help firms reduce risk and meet their legal obligations.

 

According to HSE accident statistics, the construction industry accounts for 31% of all fatal injuries to employees.

Despite being a high risk business sector however, significant improvements have been made over recent years in reducing the number and rate of injuries to workers. That’s the good news. The bad news? A report published by the Transport Research Laboratory found that a higher priority has been given to on-site health and safety than to road risk.

The Health and Safety Executive’s advice is clear – companies and their HR departments should ensure work-related road safety is integrated into wider arrangements for managing health and safety at work. To ensure risks are effectively managed they must address their health and safety “policy, responsibility, organisation, systems and monitoring”.

With around a third of all road traffic accidents believed to be work-related, the importance of road risk management is brought into even sharper focus.

Furthermore, effective risk management can help construction companies achieve Fleet Operator Recognition Scheme (FORS) accreditation. Recognition under the scheme, which has now been rolled out nationally, gives customers peace of mind that the organisations they do business with take safety and compliance seriously.

 

Unleash the power of fleet data

Simply ensuring vehicles are roadworthy and that drivers hold a valid licence is not sufficient to ensure their safety. Construction companies must strive to achieve a cultural shift among their employees to make sure policies are adhered to and that lasting improvements in a fleet’s risk profile are realised.

Telematics technology provides real-time information and insights into mobile operations, empowering businesses to identify and tackle risk as well as improve their operational efficiencies.

Ultimately, driver error remains the biggest single cause of road traffic accidents and modern systems empower management to monitor the performance of staff, helping to enforce behavioural changes and to modify driver attitudes.

Behavioural data such as fuel consumption, incidents of speeding, idling, and even harsh steering or braking can be monitored by construction managers – and this information can simultaneously be fed live to workers, to their in-vehicle terminals, enabling them to change their behaviour in real time.

By meeting targets to reduce the frequency and severity of motor claims, building contractor Breyer Group has benefitted from a 20 per cent premium reduction from its motor insurer. Using driver behaviour monitoring tools to underpin a three-year risk management programme, the company has already realised fleet insurance savings of £60,000 over the last 12 months.

 

A helping hand for working time compliance

The number of hours that a driver spends behind the wheel has long been monitored and reported by telematics systems, helping managers to enforce policies of regular breaks. Recent advancements however now allow for more effective management of driver hours and tachograph usage – reducing time-consuming administration and freeing up value business resources.

Smart tachograph management software systems can help reduce the risks of prosecution by automatically scheduling remote downloads to ensure deadlines are never missed. These systems also now incorporate reporting analytics to detail driver infringements.

Fines of up to £5,000 and, in some cases prison sentences of up to two years, can be imposed following convictions for drivers’ hours violations and tachograph offences. In light of this, the value of such systems cannot be underestimated.

 

Effective vehicle maintenance

According to road safety charity Brake, more than 2,000 accidents a year are caused by poor vehicle maintenance. Ensuring the roadworthiness of fleet vehicles should therefore be at the very heart of a construction company’s risk management strategy.

With a telematics system, managers can make use of the real measured mileage from their vehicles to plan service maintenance intervals. Reports can be generated offering maintenance overviews and enabling users to create maintenance tasks for each vehicle, copy maintenance tasks to vehicle groups, monitor their status and plan ahead.

Furthermore, the vehicle safety check process can even digitised. Applications that can automate such tasks have been specifically designed to be hosted on customisable driver terminals. These terminals can then be integrated with telematics platforms to improve business workflow and provide a reliable audit trail.

By reporting trouble codes directly from vehicle engines, telematics systems can also offer construction managers insights into how vehicles are performing. Engine faults, for example, or low oil warnings, can be immediately flagged up and fixed by management before they become more serious problems.

 

Assistance in adhering to site restrictions

Telematics software can enable geofences to be set up on and around construction sites to ensure mobile workers stick to designated access roads and do not drive in prohibited areas. Where strict planning and access restrictions are in place, this can prove invaluable.

Moreover, real time warning alerts can be set up to alert managers if drivers, journeying on and off site, break speed limits. Historical reports on speed and time spent by vehicles on site can be also accessed by managers for retrospective analysis.

By following best practice risk management procedures for their fleets, construction companies can look to the future with peace of mind knowing they’ve fulfilled their duty of care responsibilities and have protected their business reputations.

 

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Deal or no deal?

by Mark Clinton, Partner, Thomas Eggar LLP

Old habits die hard. One of the construction industry’s bad habits, which shows no sign of expiring, is starting projects before the contract is finalised. The law reports are full of examples of the unfortunate consequences this can have, but the lessons have not been learned.

When statutory adjudication arrived in 1998, it was limited to disputes arising from contracts which were in writing. The courts clarified the position, saying the whole of the contract had to be in writing. When the legislation was amended with effect from 2011, the requirement for the contract to be in writing was removed. This was an acknowledgment that the old habit persisted. It remains the case that statutory adjudication only applies where there is a contract but it no longer needs not be a written one.

When the change was made to the legislation, some commentators foresaw problems. The conventional way of enforcing an adjudicator’s decision is to go to court for summary judgment. To succeed in an application for summary judgment, the claimant must establish that the defendant has no real prospect of successfully defending the claim and there is no other compelling reason why the matter should proceed to a full trial. Cases as to whether a contract has been made but not fully recorded in writing or as to what the contract terms are notoriously difficult and often unsuitable for summary judgment. The doubters reasoned that if the defendant can show that there is a sensible argument that there is no contract or that the terms of the contract are different to those on which the adjudicator based his decision, such adjudications could run into difficulty when it came to enforcement.

Over the following four years the issue did not raise its head … until the decision in Purton v Kilker Projects this September. Kilker was on the receiving end of an adjudicator’s decision and ran both lines of argument referred to above. Purton said a contract was agreed in a conversation, Kilker said there was no such agreement, they denied that any such conversation took place. They also argued that if there was a contract, it was not the contract which was referred to adjudication.

As to the first line of argument, the court reminded itself of previous cases which had established that one of the factors to be taken into account in this sort of case was that the fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no contract. However, the court noted that it does not necessarily follow from the fact that the work was performed that the parties must have entered into a contract. On the other hand, it is a very relevant factor pointing in that direction. On the facts of the case, the court rejected the argument that there was no contract. However, the court accepted that such a situation could arise even where the transaction had been performed and accepted that a defendant could defeat enforcement by summary judgment on that basis.

On the second argument, the judge did not consider that Kilker had no real prospect of establishing that the contract was not as alleged by Purton. However, crucially in this case, that would not provide Kilker with a defence because, whoever was correct about the contract terms, the adjudication procedure would be the same, as would the substantive merits of the case decided by the adjudicator. The case left open at least three questions: would the decision be enforceable if the defendant had a real prospect of establishing that the contract (i) provided for a different adjudicator nominating body from the one that made the appointment; (ii) provided for different adjudication rules to those relied on by the adjudicator; or (iii) contained terms which would have meant the adjudicator may or would have come to a different conclusion if he had applied them.

We will no doubt see these questions addressed in future cases. They provide another reason, if one is needed, why parties should make sure their contracts are put in place before work starts.

 

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Cyclists need more training says Steersafe Road safety campaign

Road safety campaign Steersafe is calling for cyclists to have more training before being allowed on the roads.

Long-standing road safety campaigner, Chris Hanson-Abbott wants cyclists to take more responsibility for their own safety, without advocating a “driving test for cyclists” after the number of deaths and serious injuries to cyclists has risen.

In London, incidents involving cyclists and HGV’s was particularly high, with Boris Johnson introducing stricter rules for lorries entering the capital.

Mr Hanson-Abbott said: “It is a hard thing to say in the light of all the tragic cycling deaths, but the truth is that not every accident is the fault of a car, van or lorry driver. Sometimes cyclists are at fault too.

“I have seen some appalling cycling behaviour on our roads – going through red lights, sneaking up unseen on the nearside, swerving onto the road from pavements and changing lanes without warning”.

Cyclists are encouraged to take well-respected cycling training courses such as “Bikeability”.

Cycle training would focus on knowledge of a lorry drivers blind spots, which should always be avoided. Cyclists should never enter the near side of a long vehicle, especially when approaching a junction, as cyclists are invisible to the driver at this point.

“Invisible to the driver, a left turn by the truck inevitably wipes out the cyclist” explained Mr Hanson-Abbott.

“Undertaking a truck is not illegal but it is perilous, and a lot of cyclists just don’t know how difficult – often impossible – it is for drivers to see them on the near side.”

After decades of campaigning for road safety, Mr Hanson-Abbott was awarded the OBE for his services.

 

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Forth Road Bridge to reopen ahead of schedule

The Forth Road Bridge is to reopen on Wednesday, after repairs were completed ahead of schedule.

The bridge was closed on the 4^th December after a crack was discovered in the truss under the carriageway.

The reopening of the bridge will come two weeks earlier than officials promised, after engineers installed a steel splint to repair the cracked truss.

On Saturday, a number of lorries were sent over the bridge in different patterns over five hours as part of load testing, which showed that the movement in the pin located at the lower section of the truss end link was not sufficient to support HGV vehicles.

Splits will continue to be installed at the other seven truss links as a precautionary measure but officials say this can be completed safely with the bridge open.

According to officials, a full inspection of the bridge was 90% complete with no defects detected.

Transport Minister Derek Mackay said: “With the temporary solution now in place, the remaining work to install the long-term repair can safely proceed without the need for a full closure.

“For the complex and detailed interim repair to have been completed in this timeframe is a tribute to the highly skilled and dedicated staff who have worked 24/7”.

Chartered Engineer Mark Arndt, Amey’s account director responsible for the bridge, said: “While we are pleased to have finished ahead of schedule for non-HGV traffic to use the bridge, we are very aware of the on-going inconvenience for HGVs not having access.”

“Public safety has been at the heart of everything we’ve been doing and work will be progressing over the coming weeks on the additional strengthening works required to enable HGVs to start safely using the bridge.”

The repairs will be carried out overnight with lane restrictions on the bridge. Officers will be on patrol on both sides of the Forth, maintaining visable presence and ensure that HGV’s are stopped on approach to the bridge until the work is completed.

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London Gateway Logistics Centre attains Planet Mark certification

The initial phase of The DP World London Gateway Logistics Centre has this week received The Planet Mark certification from Planet First, a sustainability consultancy and certification service provider.

Working in partnership with the iconic Eden Project in Cornwall, The Planet Mark certification is available to any business, building or project that demonstrates a commitment to improving sustainability and reducing carbon emissions.

The 19,280sq m Logistics Centre, which opened earlier in the year, is one such project. The first structure to be erected on DP World’s London Gateway Logistics Park, it uses 33% less carbon on average than many buildings of a similar size and purpose.

Low carbon renewable energy is provided via 1,000 photovoltaic panels, while a highly efficient insulated cladding system has been specified to reduce waste and overall running costs. Additionally, 95% of all waste materials were recycled during construction.

Steve Malkin, CEO, Planet First, said: “We wish to congratulate DP World London Gateway on achieving The Planet Mark certification for its Logistics Centre by showing good practice in its sustainability.

“We measure the lifecycle carbon of developments and benchmark them against similar projects. Organisations must also show reductions in their carbon emissions to achieve the Planet Mark, while engaging with suppliers and stakeholders to implement improvement initiatives. DP World London Gateway Logistics Park has achieved all of these things.”

Simon Moore, CEO, DP World London Gateway said: “We are thrilled to have been recognised by The Planet Mark for the sustainable ways in which we build and operate our developments at DP World London Gateway.

“The Logistics Centre is the first of many logistics buildings on our nine million square foot Logistics Park and we hope that all of the buildings can achieve this accreditation as we continue to develop.

“One of the key propositions offered by this market-centric development is its ability to reduce CO2 emissions created by supply chains. There’s no better way of proving our intent in doing so than by being sustainable in the construction and operation of our buildings.”

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Driving home for Christmas made easier as Highways England lift roadworks

Highways England aims to complete a lift of almost 400 miles of roadworks by 6am Wednesday 23^rd of December.

Highways England aims to complete 273 miles of roadworks at 105 locations before the holidays, lifting 148 schemes by 6am on Wednesday 23 December. A further 43 sets of roadworks and lane restrictions will be removed across 128 miles of carriageway. This will leave 98% of its 9,534-mile network free of roadworks in time for the holidays.

The clearing of roadworks will benefit motorists over the Christmas period, as millions of families will be travelling by car to visit loved ones, and with the large reduction of the roadworks, people will be able to travel around freely.

Roadworks will be cleared across the majority of motorways and major A-roads in England. The lifts will leave more lanes open along with the lifting of many of the associated speed restrictions.

Transport Secretary Patrick McLoughlin said: “We are on the side of the honest motorist, making it easier for people to get around, as well as creating jobs and opportunities.

“It’s impossible to improve roads without some element of engineering work, but I also know how frustrating they can be. We are determined to apply common sense to our roads so we can minimise disruption.”

Drivers are advised to make the best of their festive journeys, by keeping up to date with weather and travel conditions and planning longer journeys ahead of time.

Highways England Director of Customer Operations, Melanie Clarke, said: “It’s also worth packing an emergency winter kit in your boot, before making any seasonal journeys this Christmas. Make sure you’ve got de-icer, an ice-scraper, warm clothes, boots and a torch, in case your vehicle breaks down.”

Around 196 miles of roadworks will still be in place, compared to 268 last year.

The roadworks will return after midnight on Saturday 2^nd of January.

 

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Detection and prevention of risk from third parties

Companies in many sectors – particularly construction, infrastructure operation, energy and telecoms – interact with a large number of third parties, including their customers, partners, suppliers and commercial agents. A company may have an economic relationship with thousands of third parties each year and potential relationships with more than three times those selected in the same period.

In some sectors – particularly construction – companies can critically depend on third parties. It is not unusual for over 90% of any given contract value to be passed on to these third parties. Some of the types of risk and potential impact that these third parties can bring include:

• If the third party has financial issues during the relationship, it can lead to delays in the work and overall contract delivery.
• If a third party behaves in an overly contractual or argumentative manner, it can lead to delivery delays, additional costs and often the need to dedicate more company resources to manage the third party.
• If a third party is involved in corruption cases (either real or alleged), legal liability may extend to the company and have reputational impact.

We predict that this situation will continue to increase in the coming years. For instance, major construction and infrastructure development companies are increasingly expanding their footprints into countries far from their “home markets”. Major infrastructure development in the coming years will be carried out in emerging markets with potential for higher rates of return and lower levels of national debt. The third parties in these emerging markets tend to be less well known and could bring new risks. A number of countries where large infrastructure construction and investment are expected are highlighted in the following international rankings and lists of transparency indexes for their high levels of corruption.

At the same time, national legislation covering corruption has tightened significantly – one example is the UK Bribery Act 2010, which has an international scope that applies to all companies with UK operations. Overall, regulatory trends increasingly make companies responsible for corruption and bribery carried out by their partners and third parties, with the related penalties and sanctions increasing and having transnational impact. For instance, sanctions include the loss of the company’s ability to undertake contracts in the legislation’s country of origin and the criminalisation of its executives.

However, companies can take steps to mitigate, manage and even create value from this situation. In particular, companies are increasingly using detection and prevention approaches to detect, avoid and manage risk. There are three major benefits to this approach:

• First of all, it allows early identification of potential economic risks. These include financial weakness from a partner or a payment default by a customer, technical issues such as conflicts or delays in recent projects, and compliance issues such as convictions or recent cases of corruption.
• Companies that perform and keep records of their third parties can mitigate their liability if cases of corruption arise afterwards.
• It allows cost optimisation, particularly during the business development phases. The ability to detect counterparty risks in advance implies better allocation of resources and better business decisions.

In our experience all major international construction companies and developers of significant infrastructure projects carry out assessments of their third parties, or at least of some of them. However, this is usually conducted in an unstructured way, without standard procedures, leading to time and cost inefficiencies. To ensure effective and efficient assessments requires the design and implementation of a comprehensive third-party due diligence system.

Based on our experience, we have identified the following key success factors for successfully implementing a detection and prevention system:

• Holistic perspective: all major risk compliance.
• Risk orientation: Focusing analyses only on higher-risk situations.
• Proportionality: The dedication of resources and depth of the analysis must be adequate.
• Independence and objectivity: The information included in the financial and technical assessments must be provided independently and objectively.
• Leverage all available sources of information when assessing third parties.
• Aimed for decision-making: The due diligence analysis of the third party is not intended to “veto” its selection, but should help to decide which third party to select.
• Willingness to anticipate: The earlier the assessment is carried out, the earlier the company will make a decision about the third party, and it will avoid incurring unnecessary costs associated with a potential third-party relationship that is too risky.
• Easy assessment criteria: Criteria have to be easy to apply so that risk level is not a factor subject to interpretation.

 

Authors: Stephen Watson and Javier Serra

Stephen Watson is a Principal at Arthur D. Little based in Cambridge. He has 20 years of experience in risk management in the construction, transport and petrochemical manufacturing sectors.

Javier Serra is Principal at Arthur D. Little based in Madrid. He has 14 years of consulting experience in strategy development and implementation and operational transformation, including risk management topics.

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National Infrastructure Commission appoints CEO

The Chancellor George Osborne has appointed Phil Graham as CEO of the National Infrastructure Commission (NIC).

Mr Graham joins from the Department of Transport having previously worked on many of the UK’s major infrastructure projects including the high speed rail strategy, in addition to leading the team supporting Sir Howard Davies’ Airports Commission and working on the London Olympics.

The Chancellor said of the appointment: “I am delighted to appoint Phil Graham as CEO of the National Infrastructure Commission.

“The NIC will provide expert, independent advice to the government on the most pressing ‎infrastructure challenges facing the country. Phil’s role as CEO will be vital in overseeing this work.”

The Chancellor announced back in October the creation of the National Infrastructure Commission to give expert neutral analysis of the long-term infrastructure needs of the UK.

Since its formation, the commission has been working shadow form and has been chaired by the former Transport Secretary, Lord Adonis.

Supporting the appointment, Lord Adonis described Mr Graham as “supremely qualified”. He commented: “He has done brilliant work on a wide range of nationally significant projects from high speed rail to the London Olympics and most recently ‎as secretary of the Airports Commission.

“He is an excellent public servant and I am confident he will be superb in his new role.”

The commission will publish a National Infrastructure Assessment every Parliament, putting forward its analysis of the UK’s infrastructure needs over a 10 to 30 year horizon. The government will be required formally to respond to its recommendations.

The Chancellor has requested the commission to report on three initial projects before next year’s budget – Northern transport connectivity; Large-scale investment in London’s transport infrastructure, including Crossrail 2 and making sure investment in energy infrastructure is capable of meeting future demand in the most efficient manner.

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Construction skills shortage a worry for building contractors

Eight out of ten building companies in the North West and Midlands think that the skill shortage crisis will hold back their businesses in 2016, with a shortage of quantity surveyors, estimators and site-based personnel causing particular concern.

New research undertaken by construction recruitment company, Ionic, found that 72.5% of contractors had issues with the skills shortage in 2015, with 82% believing it will have negative effect on their businesses in 2016.

The headline findings include 56.5% of respondents naming cost inflation for labour/subcontractor rates as a barrier to growth – an matter directly associated with skills shortages.

Martyn Makinson, Managing Director of Ionic, said:  “The New Year will highlight some old anxieties for many regional contractors. The construction industry has introduced a range of initiatives this year to try to combat the chronic skills shortages; however, the scarcity of key personnel continues to hold back the sector.

“The health of the construction industry should be a concern for everyone as its problems resonant. They impact the cost and delivery of projects from the smallest housing development to large scale in.  The cost pressures are about supply and demand – and the erosion of profit margins for companies which have only just recovered from the recession.”

The study also revealed increased instability in the workforce. 58.5% of North West building companies experienced an increase in staff turnover in the last year. In terms of vacancies, 60% said that the roles were newly created, with the balance replacement role. 52.5% said they’d had to make a counter offer to retain staff in the last year.

Mr Makinson commented: “People are the raw materials that will help a business grow but competition has returned to the jobs market in a way that impacts the bottom line.  In a candidate driven marketplace, Construction companies need to present themselves as attractively as possible.

“It’s also imperative that they sell themselves well at interview stage to prospective candidates by focusing on career and skills advancement opportunities; which from experience are more important factors than a salary increase.”

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Robertson helps Glasgow pupils “Get into Engineering”

Ten students have graduated from the “Get into Engineering” course ran by the Robertson Group,Clyde Gateway and University of West of Scotland.

School pupils in Glasgow have become a step closer towards becoming engineers, after graduating from a course designed to encourage careers in the engineering industry.

A total of ten pupils from St Mungo’s Academy in Glasgow and Trinity High School in Rutherglen took part in an award ceremony this month, after engaging in the Get into Engineering Scheme, which saw them engaging in practical projects across a three month period.

From classroom engagement, to workshops and site visits, the course encourages individuals to choose a career in the construction industry.

As part of the programme, the pupils worked with Robertson Civil Engineering on the development of the Cuningar Loop Bridge project. Once in place, the new Glasgow landmark will connect the Commonwealth Games Athletes’ Village in Glasgow’s East End to a new community green space.

The bridge is scheduled to open in early summer 2016.

Natalie Phillips, Education, Business & Community Growth Project Manager with Clyde Gateway said: “Supporting local pupils into careers and further or higher education is one of the key aims of Clyde Gateway and our Get Into Engineering Programme over the past three years has been a huge success in helping to achieve this.

“Robertson has become one of our key partners in the delivery of this innovative programme and there is no question that the unique learning opportunities they provide for pupils are ideal. Not only are they enjoyable, interesting and informative but they also give everyone involved the perfect introduction to what is involved in engineering and construction.”

Robertson announced at the event, that they have engaged with 12,000 youths throughout 2015.

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One third of London’s buses to run on B20 fuel

Almost a third of London’s buses will be running on  B20 fuel, a greener blend of diesel, reducing CO2 emissions by 21,000 tonnes each year.

Stagecoach and Metroline have signed deals with Argent Energy to supply them with B20 fuel, green diesel which will reduce CO2 emissions from each bus by 10%. This comes on top of the 48,000 tonne reduction from 2013, which was a result of the introduction of lower emitting buses such as hybrids.

The cleaner burning fuel is made from blending diesel with renewable biodiesel from waste products, including cooking oil and tallow from the meat processing trade.

A total of 642 buses operating out of four Stagecoach depots have been using B20 for two months on a trial basis, and by March next year almost 3,000 of the 8,900 buses will be powered by the fuel.

Transport for London (TfL) requests that the biodiesel blended into B20 for London buses is made from waste, rather than crop-based feedstocks. B20 is a mix of 80 per cent standard diesel with 20 per cent biodiesel which are blended at Argent Energy’s London blending facility.

Mike Weston, TfL’s Director of Buses, said: “Our bus fleet is now making a major contribution to improving air quality and bringing down CO2 emissions. This improvement, which will reduce CO2 emissions by 21,000 tonnes each year, is being introduced now with no extra spend needed and no long delay for the fitting of new kit. It’s just one of a number of measures we are taking to make London’s environment better for everyone.”

London’s bus network carries almost 2.4 billion passengers a year, making it one of the largest in the world. The fleet uses around 240 million litres of fuel each year, with 80 million litres of the new fuel to be consumed each year under the new deal.

The Capital’s bus fleet already has over 1,500 hybrid electric buses and 15 pure electric buses. Over 2,000 older buses have been retrofitted with Selective catalytic Reduction, reducing their NOx emissions by up to 88 per cent per bus. The number of hybrid buses will increase to over 1,700 by 2016 – a figure that will represent over 20 per cent of the fleet.

TfL will soon be trialling inductive charging technology between Canning Town and Tower Gateway, which will enable special extended range diesel electric hybrid buses to wirelessly charge their batteries while they wait at bus stands.

The announcement was made just a fortnight after the Mayor’s visit to the Paris conference on global warming.

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UK immigration options for the construction industry

Article by Jennifer Stevens – Senior Associate Solicitor and Practice Manager and Mercedes Moya – Paralegal both of Laura Devine Attorneys LLC

With 2014 being a boom year for housing and commercial development, and with continued growth in 2015, the construction industry is creating a demand for specialist and skilled workers. The Royal Academy of Engineering acknowledged that the UK will need over one million new engineers and technicians over the next five years and the UK Government recognises that there is a skills gap in the resident labour market. This suggests that the UK is not able to keep up with this demand, requiring employers to hire workers from outside the UK.

Tier 2 (General)

For construction companies looking to hire migrant workers to fill skilled positions within the UK that cannot be filled by resident workers, the most appropriate category is likely to be Tier 2 of the UK’s Points Based System. Employers must first obtain a licence from UK Visas & Immigration (UKVI) before they can sponsor migrant workers in the UK. In addition, unless the position is an intra company transfer, is on the shortage occupation list or the annual salary is at least £155,300, the position must be advertised to the resident labour market for a 28 day period in two mediums and provided no suitable resident worker applies for the role, the employer can then request a restricted Tier 2 (General) Certificate of Sponsorship (COS) from UKVI. There are only 20,700 of these restricted COS available per year, divided into 12 monthly allocations. Restricted COS are allocated on a points basis, with roles on the shortage occupation list, PhD level positions and those with high salaries obtaining the highest points.

The Migration Advisory Committee (MAC) is an independent non-departmental public body which was set up to advise the UK government, for example on where there are shortages of skilled labour in the UK. Based on this advice, the UK Government created and updates a shortage occupation list. The good news for the construction industry is that several relevant specialist roles are on this list including certain technicians, quality control and planning engineers in specific industries and environmental professionals in the construction related ground engineering industry. If a position is on the shortage occupation list it means that advertising is not required and that it is likely to be granted a restricted COS. In addition, positions under Tier 2 are also usually required to be at NQF Level 6, but this does not apply to those positions on the shortage occupation list.

A migrant may work in the UK under the Tier 2 (General) category for an initial period of up to five years, with a maximum period of stay of six years. However, this category can lead to indefinite leave to remain in the UK (ILR).

Tier 2 (Intra-Company Transfer (ICT))

A further option for multi-national construction companies is to transfer current employees who have gained the specialist skills and experience required by the company, to their UK based branch under Tier 2. For transfers of 12 months or more (up to a maximum period of five years or nine years if earning at least £155,300 a year) the employee must have been working for the organisation outside the UK for at least 12 months directly prior to the transfer and must be filling a skilled job in the UK which cannot be filled by a settled worker. The employer is not however required to advertise the position.

Current employees can also be transferred to a UK branch of the same organisation for a maximum six month period to acquire the skills and knowledge needed to perform their role overseas, or to impart their specialist skills to the UK workforce, provided the role in the UK is supernumerary. The employee just needs to be employed by the overseas company at the point of applying. Alternatively, if a UK company has a structured graduate training programme, clearly defining progression towards a managerial or specialist role, they could use the Graduate Trainee sub category of Tier 2 (ICT). Migrants must be recent graduate recruits of multi-national companies who are being transferred to the UK branch of the same organisation as part of the graduate training programme. 

The Tier 2 (ICT) category does not lead to ILR however therefore an employer should consider applying under Tier 2 (General) if they require a long term or permanent transfer of an employee.

Tier 2 also covers migrants who are working in the UK on a contract basis and are being supplied to one organisation by another. The sponsor in these circumstances must be whoever has full responsibilities for the migrants duties, functions and outcomes or outputs of the job.

Employers sponsoring migrants under Tier 2 must also ensure that they are paid the minimum required salary, which is dependent on the category and the applicable Standard Occupational Classification code. They must also be aware that if the sponsoring migrant leaves the UK at the conclusion of their sponsorship they will be unable to re-enter the UK under the Tier 2 category for a period of 12 months (unless an exemption applies, for example they were previously in the UK in the Short Term staff, Skills Transfer or Graduate Trainee sub categories of Tier 2 and they are returning under the Long Term staff route). Employers must therefore take this exclusion period into consideration when transferring staff.

Tier 1 (Exceptional Talent)

This is an alternative immigration option that does not require a sponsor and enables successful applicants to take any employment in the UK. This category is relevant for migrants who are world leaders, or emerging world leaders, in their field and covers the field of engineering. However the bar for this category is set very high and there are only 1000 places available each year, with 150 places allocated to the engineering industry. The application process initially involves the applicant obtaining an endorsement from a relevant designated body, such as the Royal Academy of Engineering.

Tier 1 (Entrepreneur)

The Tier 1 (Entrepreneur) category is open to those who wish to join, take over or establish a business in the UK. In order to be successful, applicants have to demonstrate that they have access to £200,000 for investment in the UK. This category could also therefore be applicable to those wanting to invest in a construction company within the UK.

There are therefore several options available to enable companies within the construction industry to hire and transfer skilled workers to fill the skills gap which currently exists within the UK, at least until any education or training programmes prove successful in upskilling the UK resident labour market.

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Skilled sharing: how the logic of the sharing economy could drive apprenticeships

ACE – Apprenticeship Certificates England

The ACE online system is the place where apprentices, or third parties acting on their behalf, apply for their Apprenticeship certificates.

The so-called sharing economy was named by TIME magazine as one of ’10 Ideas that will change the world’[1] in 2011. Four years later, the construction industry appears to have taken little heed of this assertion, though, the logic of the sharing economy may be breaking through.

The big question posed by the sharing economy is: why own a chainsaw when you only chop down trees two days a year, why not loan it out to others while you do not need it? Indeed, the sharing economy has, in its short history, mostly been orientated towards individual consumers making the most of shared resources. Incredibly successful businesses like Uber and Airbnb have emerged as sharing economy posterboys. For the purposes of the construction industry, rather than viewing the sharing economy as a necessarily consumption-angled concept, the sector needs to expand its thinking to understand how it can be deployed to solve construction problems.

One problem that the construction industry faces is a crippling skills shortage, which will likely worsen as demand for new housing, for example, increases. Despite the prospect of renewed demand for housing[2][3], the UK is victim to a grave skills gap. Half a million of the existing 2,124,000 strong construction workforce is due to retire in the next five years and needs to be replaced (and more) as the sector grows, which calls for more apprentices. And, by 2013, ‘the number of first year trainees undertaking apprenticeship training had fallen for the fifth consecutive year to an all-time low of 3,539’.[4] In sum, the sector’s ability to replenish the shrinking construction workforce at a time of unprecedented demand is diminishing.

A significant barrier to increasing the stock of apprentices is, very simply, the lack of apprenticeships on offer in the construction sector. Indeed, just one in four construction firms reported having taken on an apprentice in 2014, despite 75% finding themselves either satisfied or very satisfied with the schemes[5].

A key question, then, is how to encourage employers to take on more apprentices. Perhaps the logic of the sharing economy that provides some of the answer; although the apprenticeship system can be traced back to the Middle Ages, there might be a way of reinvigorating the construction industry with a resolutely modern take on this most ancient method of training.

The CITB (Construction Industry Training Board) has stepped up. It launched a pilot programme called the ‘Shared Apprenticeship Scheme’[6] which allows young people to complete a full apprenticeship by working with a number of different employers. The scheme allows employers to take on an apprentice for a minimum of three months before allowing the apprentice to move on to another firm to learn more. It gives the apprentices a wealth of varied experience and a series of contacts to pursue for a full time job once they complete their training while also insulating the employer from higher costs associated with taking on an apprentice for a year, therefore lowering risk. The real beauty of the scheme is that it does not rely on incentivising apprentices by paying them more, just sharing of excess capacity of apprentices’ services between companies – a key tenant of the sharing economy. The model works because it is sympathetic to both employers and young employees. Why have an apprentice for a full year when you only need him/her for three months, why not loan them out for another firm to train them when you do not need them?

The CITB pilots have proved successful, reinforcing the construction industry with an extra 500 apprentices per annum. A real effort, however, must be made to roll out the programme on a wider scale. The industry has to work hard to find ways to make apprenticeships more flexible and engaging for the apprentices involved. The sector should consider administering this kind of scheme among themselves rather than relying on Non-Departmental Public Bodies (NDPBs) such as CITB to do the work for them, which would enable them to more specifically tailor the apprentice’s training to their needs.

Although the sharing economy is often perceived as unrealistic or cerebral, its rationale can be applied to the resolutely tangible world of the construction industry and if it means a higher capacity for infrastructure, society as a whole will surely be sharing in the benefits. Whether it’s swapping apprentices or chainsaws, a sharing economy inspired approach might well be the future of training in the construction industry… and chopping down trees.

[1] http://ift.tt/1bIkljC

[2] http://ift.tt/1Q9I66o

[3] http://ift.tt/1OoRd5j

[4] http://ift.tt/1URrpPI (p 15)

[5] http://ift.tt/1URrpPK

[6] http://ift.tt/1URrpPL

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New EIA Guidance will speed up planning and bring down costs

New industry guidance launched last month seeks to support EIA professionals to achieve better, faster outcomes to their assessments at reduced cost. The two guides aim to ensure that environmental thinking is firmly embedded into any design processes and project resilience measures.

The guidance documents have been created by the Institute of Environmental Management & Assessment (IEMA), the professional association representing over 15,000 professionals worldwide. By working with two leading EIA specialist organisations – LDA Design and Mott MacDonald – IEMA has filled critical guidance gaps on two key EIA issues.

Josh Fothergill, IEMA’s Policy & Engagement Lead on EIA, said today: “Speeding up the process and progress of developments is crucial to the economic recovery, yet without current guidance there is a very real risk of unintended consequences for communities and the environment, resulting in unnecessary delays. It is IEMA’s role to ensure that EIA professionals can produce the best work possible and these guides will support them to create better quality EIAs that enable a smoother consenting process.”

 The IEMA Environmental Impact Assessment Guide to: Climate Change Resilience and Adaptation provides a framework for the effective consideration of climate change resilience and adaptation in the Environmental Impact Assessment process, in line with the 2014 European Union Directive. It addresses proportionate assessment, the legislative and policy landscape and looks to the National Adaptation Plan as a crucial anchor point.

Succinctly, an environmental statement produced in line with the guidance will:

• always make reference to climate change;
• provide a concise explanation of how the project’s resilience to climate change was considered;
• set out clearly how effects related to climate change have been assessed; and
• define the significance of effects by pragmatically taking account of the knowledge base used in the impact assessment.

James Montgomery, Divisional Manager (Environment) at Mott MacDonald (a registered EIA Quality Mark company), led the guide’s development, and said: “Taking into account how proposed development will impact on an environment that is itself adapting to climate change is a challenging task that EIA practitioners are going to have to cope with in the future. This guidance will help practitioners by giving prompts on what issues to consider and when in the EIA process. The guidance is the first step to improve our EIA process, and I hope that future versions will be able to build on lessons learned from EIAs conducted taking on board this guidance”.

The IEMA Environmental Impact Assessment Guide to: Shaping Quality Development – establishes the principles and framework for maximising synergy between environmental thinking and project design within the decision-making process. It aims to contribute to the delivery of proportionate EIA by shaping decision-making which leads to higher-quality development proposals. Adhering to the guidance document’s recommendations will result in:

• improved outcomes for the developer, communities and the environment
• better informed decision-making
• better solutions
• reduced consenting risk, consenting delay and associated costs.

Mary Fisher, Board Director responsible for EIA at EIA Quality Mark registrant LDA Design, who co-authored the guide said: “Today’s launch will ensure that EIA professionals are supported to encourage greater collaboration between design and assessment teams leading to development proposals which are better integrated with their environment and thus more likely to be consented. It will also assist the delivery of more-focused, proportionate Environmental Statements.”

 

The guidance documents are available from http://ift.tt/1Mp1vw5.

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Constructing the right price

Benjamin Dyer is CEO and co-founder of Powered Now

I’m in a somewhat fortunate position, I get to speak to a lot of construction companies in my role. It’s fascinating as I don’t think I’ve come across two companies that are really alike, however there is one common element the more successful ones have, they don’t compete on price.

By ‘don’t compete on price’ what I mean is, they don’t allow price to become the main reason their company is chosen for work, and they definitely never commit themselves to beating other prices whatever they are.

I find this fascinating, but its very tempting to focus on price, especially in a competitive market such as construction. In this article I explain some of the problems when you make price your primary way of competing, and then try to suggest some alternative strategies.

 

It doesn’t make sense

Supermarkets buy in bulk so are able to wipe out many local shops because they have huge economies of scale. This is known as a cost advantage.

Most construction companies sadly don’t have much of a cost advantage over one another. Therefore one of the only ways that you can consistently beat others is by paying you and your staff less per hour or cutting corners, not a good business strategy!

 

You will deal with more difficult customers

In general, those customers most keen on a “deal” will also be the most demanding, the most difficult and as a result the most challenging at paying. Are they the type that you want? Or would you prefer your competitors to have them to themselves?

 

Impacts recommendations

As I described earlier, the standard strategies for lowering prices are not very attractive. I’ve seen companies that end up in disputes over cutting corners and this has a terrible knock on effect, you will never be recommended.

Recommendations generally lead to uncontested quotes and without them you will always find yourselves competing with others. It’s a vicious circle thats very hard to break.

 

You can prosper by not doing it

There are a number of different approaches you can adopt. The first is to always emphasise quality when you are discussing the job, and do your best to demonstrate your expertise to the prospect without irritating them by being a know-it-all.

Guy Hodgson, Screwfix tradesman of the year for the West Midlands, suggests: “The way to win business is to go in person to see the client. Listen hard and try to contribute useful suggestions. If you don’t know something, say so. Then later do research and call them back. Get your quotation or estimate to them quickly. Strike while the iron is hot.” His approach is to impress with expertise, not price, and thus Guy has a thriving business.

As Hodgson says, a tip is to be very fast at producing a quotation when one is requested. Many tradesmen are slow to respond and home owners can get very frustrated waiting.

Maybe you could experiment with saying that if a decision is given by a certain date, you can start on the following week, but that commitment ends if they don’t make a decision in time. That way you can use the lack of speed by competitors to provide your advantage. Of course your bid does need to be reasonable as well.

Just be careful that you can deliver. If you force your customer’s hand, setting their expectations that they will get a fast job and then they get something else, this will cause big problems.

Some of the companies I have interviewed simply don’t quote when they are in competition with others – the cost of preparing failed quotes is too high and they don’t wish to compete on price. They work hard to generate enough leads so they can afford to just quote for the ones where there isn’t any competition.

 

Be firm

Competing on price is the quickest way to lose money and probably after poor workmanship is the biggest reason for construction businesses fail. No one is suggesting that rip-off pricing will work but fair pricing that provides for a good job and a decent profit should always be your aim.

Sometimes it’s hard to wean yourself off low prices and it can take persistence and a lot of confidence. However while no two construction campaigns are alike you can use this to your advantage.

 

………..

About the author

Benjamin Dyer is CEO and co-founder of Powered Now. Powered Now’s mobile app aims to take the pain out of paperwork for individual trades people as well as small field trade businesses.

The post Constructing the right price appeared first on UK Construction Online.

Build UK – Single voice or sick joke?

Written by Barry Ashmore, co-founder of StreetwiseSubbie.com Ltd

Following the launch of Build UK at the beginning of September, I read a whole host of articles and stories about the aspirations of this shiny new organisation formed as a result of the merger between the National Specialist Contractors Council and the UK Contractors Group.

Many of those articles clearly outlined Build UK’s claim that it will provide, “for the first time, a single voice for the whole of the contracting supply chain and offers a real opportunity to transform the construction.” Reading all this was music to my ears, and many others involved in the construction industry I imagine. A very worthy aim but, and it’s a big but, one that I feel is sadly unattainable for a number of reasons.

• Build UK is made up of “27 of the largest major contractors” and “40 trade associations representing over 11,500 specialist contractors”. How on earth can 67 separate businesses and associations speak with one single voice? Each one will undoubtedly have its own separate agenda and, come on, main contractors and specialist contractors singing from the same hymn sheet? It’s like poachers and gamekeepers joining forces – it will never happen.
• There are, indeed, some huge household names cited in the member and partnership section of the Build UK website. If you contacted any of them tomorrow, would they know the specific aims of “the ‘go to’ representative organisation for industry stakeholders” that they belong to? Even if they did, would they be able to explain exactly how these aims are being achieved on a day-to-day basis by the very organisation they are part of that purports to “provide influential and dynamic leadership and a joined up approach from the supply chain”? The short answer is, no.
• Build UK professes to “focus on key industry issues that can deliver change and enable the contracting supply chain to improve the efficiency and delivery of construction projects to the benefit of the industry’s clients.” Just take a look at any one of those ‘issues’ and you’ll realise that Build UK has a truly immense task on its hands to offer solutions. They could be at this a while…
• Referring to point 3, I do see, however, a very quick win for Build UK in the shape of the ‘fair payment practices’ issue. I’ll give the executive board the solution to this one for free. Cut through the PR flimflam of “considering what fair payment practice in the construction industry looks like” – we ALL know what it currently looks like and it’s both soul and business destroying. Fact. Main contractors, pay your subbies on time, every time and the problem will be resolved overnight. Now that was easy wasn’t it?
• In Build UK’s “Action Plan”, it states that: “quite simply, construction is what everything else relies on.” It’s very refreshing to hear this tone of voice but, quite frankly, they’re hollow words. UK construction is a huge, multi-billion pound industry employing millions of people which is why the Government, and the banks, can’t let it fail. The problem is, it is failing but it’s the subcontractors at the very bottom of the pile that are being failed by the existing system. Six construction firms are going bust every single day but no one at the top cares*. Well they should. Why? Because if you take specialist contractors out of the equation, there would be no UK construction industry whatsoever.

I could go on and if anyone from Build UK, board directors, members or partners, would like to contact me, I would be happy to discuss it.

On a daily basis, at StreetwiseSubbie.com we help to pick up the pieces from the fall-out of skills shortages, HR problems, non- or late-payment and legal battles. We support specialist subcontractors to win more work and get paid (on time!) for it. We’re already doing what Build UK aims to achieve and we’re doing it very well.

Perhaps more ‘talking’ will somehow lead to solutions to the serious issues that Build UK says it is attempting to tackle, but somehow I doubt it After all, actions speak louder than words. And if the main contractor’s business model relies on paying its specialist contractors after 90 days, no amount of asking or talking will persuade them to pay in 30 days.

Or am I missing something?

Anyway, I know this is a hot topic so I would love to hear from you, Construction UK’s readers, about your views on Build UK and any experiences you may have had over the last couple of months, good or bad.

One last thought. This might all just be a cunning plan by Ms Nichols and co. to lull contractors into a false sense of security before turning on them, and selling them out completely!

Maybe Build UK does have a plan after all…

 

Sources:

* Office of National Statistics’ figures; in the 12 months ending Q4 2014, the highest number of liquidations was in the construction sector at 2,317, with 578 compulsory liquidations and 1,739 creditors’ voluntary liquidations.

 

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Interim payment disputes – Stop winding me up!

Last month the Court of Appeal handed-down judgment in a case concerning contractor’s insolvency and payment in winding-up proceedings (Wilson and Sharp Investments Ltd v Harbour View Developments Ltd). The case is of interest because of its wide interpretation of the JCT contractual insolvency provisions. It also sends a clear message as to how interim payments should be enforced.

In 2012, property developer Wilson and Sharp Investments Ltd (the Employer) engaged Harbour View Developments Ltd (the Contractor) for the development of student accommodation in Bournemouth. There were two building contracts, both based on the JCT Intermediate Contract with Contractor’s Design 2011.

In August and September 2013 four interim certificates were issued – one of which was later paid – leaving an amount of over £1M outstanding. No Pay Less Notices were issued by the Employer. As a result, the sums certified became due and payable. The Contractor subsequently suspended its services on the grounds of non-payment. It was common ground that the contracts were terminated in late January 2014.

Rather than issuing adjudication proceedings to recover the sums certified, the Contractor, having first notified the Employer of its intention to do so, issued a winding-up petition against the Employer. The Employer subsequently issued an application for an injunction restraining the petition, on the basis that the interim certificates grossly overvalued the Contractor’s works.

The financial standing of the Contractor subsequently deteriorated. Prior to the hearing at first instance the Contractor proposed a CVA, which was subsequently rejected and notice was given that a meeting of creditors was to be held for the purpose of appointing a liquidator.

The Court at first instance dismissed the Employer’s application for an injunction to restrain the winding-up petition because:

1. the JCT provisions allowing the Employer to suspend payment on insolvency did not apply where the contracts had already been terminated before the contractor became insolvent
2. as the Employer had not served Pay Less Notices and acknowledged the interim payments were due and payable, the Employer’s cross claim for overvaluation of the works was a ‘put-up job’ and not genuine.

The Employer appealed. So what did the Court of Appeal decide?

The Court of Appeal agreed with the Employer that the JCT provisions regarding suspension of payments to the Contractor on insolvency apply regardless of whether the contract had already been terminated or was capable of termination.

The Court of Appeal also disagreed that the cross-claim was a ‘put-up job’; the evidence showed that the cross-claim was reasonably arguable. Further, the Court stated that an acceptance by an employer that an amount was due under an interim certificate (because a Pay Less Notice was not served) did not preclude an employer from challenging the valuation later.

This, of course, is a hot topic since the outcome of the appeal in the case of Harding v Paice, where parties were not permitted to challenge the valuation of interim payments in the absence of a Pay Less Notice, is due at any time.

But possibly the most important message from the Court of Appeal to contractors is that even where there has been a failure to serve Pay Less Notices, don’t use winding-up proceedings to enforce interim payments where there is a challenge to a valuation or a cross claim. The most appropriate route is to pursue adjudication proceedings followed by enforcement in the TCC.

 

Kasia Dickson, Legal Assistant, Thomas Eggar LLP

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Payment Application and Pay Less Notice: the Henia Case

By Peter Sheridan, Partner, Sheridan Gold LLP

As noted in previous articles recently, payment notices have increased practical importance since the amendments to the Housing Grants, Construction and Regeneration Act 1996 (the HGCR Act) brought in by the Local Democracy, Economic Development and Construction Act 2009 (the LDEDC Act). If the employer fails to issue either a valid payment notice or a valid pay less notice, the contractor is entitled to be paid the sum for which it applied.

Again as we have seen in previous articles, adjudicators have tended to take a lax approach to the validity of the contractor’s payment notice and have readily found contractors entitled to sums applied for on the basis of questionably alleged payment notices, whereas the courts have made it clear that it must first be investigated whether the payment notice relied on is valid: see Leeds City Council v Waco UK Ltd (2015) and Caledonian Modular v Mar City Developments (2015). It is important that these notices are valid, as they have potentially severe financial consequences if not acted upon correctly; it is therefore vital that they are clearly recognisable as payment notices.

In the most recent case, Henia Investments Inc v Beck Interiors Ltd [2015], the judge set out some fairly stringent requirements for these notices. Beck Interiors was carrying out extensive fitting out work for Henia under a JCT contract. Akenhead J stated that a document relied on as an interim application must be in substance, form and intent an interim application stating the sum considered by the contractor to be due at the relevant due date and it must be free from ambiguity. It must be clear that it is what it purports to be so that the parties know what to do about it and when. It must be clear and unambiguous that an application relating to a specific due date is being made. On the facts of this case, Beck Interiors’ application for interim payment of 28th April 2015 was held not to be an effective interim payment notice in respect of the 29th May payment due date.

A second issue concerned a pay less notice from Henia. Akenhead J made the point that a pay less notice can validly be used by the employer to challenge the independent certifier’s certified amount (as well as any payment application from the contractor). A pay less notice can be used both to challenge these amounts and to take account of any amounts to be set off. This was the position under both the statutory provisions and the JCT contract. The regime under the HGCR Act before amendment by the LDEDC Act was that a withholding notice was only for set-off and any certified amount had to be paid in the absence of a valid withholding notice (see the Court of Appeal decision in Rupert Morgan (2003). The certified amount could only be reviewed in adjudication, arbitration or court.

The Henia analysis does mean that in cases where the employer challenges the certified amount, the contractor may find out only very shortly before the final date for payment that the sum to be received is less than expected by reason of a change in the valuation, by the employer, from that certified. If dissatisfied, the contractor in these circumstances may adjudicate or follow some other dispute resolution route. This may be a relatively rare occurrence, as employers are generally content with the certified amount. It does in any event seem to the writer that the judge is correct that the legislation allows an employer to challenge the certified amount in a pay less notice: see s. 111(1), (3), (4) and (6), under which the notified amount that has to be paid is the amount the employer specifies in the pay less notice he considers is due. Whether the legislation was right to put the matter so broadly rather than limiting s.111 to set-off is a separate policy question.

The pay less notice thus determines provisionally what sum is to be paid net of set-off. In the Henia case, Henia’s pay less notice did not in fact challenge the certified amount but accepted it and set off liquidated damages, with the effect that the certified amount was reduced to £0.

The pay less notice was provided in time and was held to be valid and effective.

 

For more information, contact Peter Sheridan

Partner at Sheridan Gold LLP

T: 01737 735088

E: psheridan@sheridangold.co.uk

http://ift.tt/1JTmBCV

 

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