Don’t get caught out – The Construction Industry Scheme

Conceived in 1971 to prevent perceived tax evasion by construction workers, the Construction Industry Scheme (CIS) is a UK tax deduction scheme. It involves tax being deducted at source (0%, 20%, 30%) from payments made by contractors to subcontractors for construction operations. Any tax withholding is then paid over each month to HM Revenue & Customs (HMRC) by the contractor.

In this article, Susan Ball, Partner Head of Employers Advisory Services at national audit, tax, advisory and risk firm Crowe UK, explains what this means for construction firms.

There are two types of contractors:

• Mainstream – any person carrying on a business that includes construction operations, for example property developers and builders.
• Deemed – any person carrying on a business at any time where:
  • its average annual spend on construction operations is more than £1 million in the three years ending with the end of the period of account before that time, for example property investment businesses
  • HMRC is not satisfied that the expenditure on construction operations has been less than £1 million in each of three successive subsequent years.

In general, CIS applies to all payments made under a ‘construction contract’ – a contract relating to, or partly including, ‘construction operations’. Construction operations are legislatively defined as essentially any work in the construction, alternation, repair and demolition of buildings or structures. It also includes the installation of key building systems (such as heating, lighting), and interior and exterior decorating and cleaning under a construction contract. All construction operations carried out in the UK or its territorial waters are caught by the scheme.

What is the effect of applying CIS to contractors?

Once registered with HMRC, the contractor must file monthly CIS returns stating the total amounts paid (excluding VAT), the cost of materials and the CIS tax deducted (percentage applied to the cost of labour) for each subcontractor under a construction contract.

CIS requires the contractor to verify the subcontractor with HMRC before payment is made. There are three possible scenarios:

1. the subcontractor has gross pay status (GPS) so is subject to no tax deduction
2. the subcontractor is subject to a 20% deduction applied to the labour elements, which is paid to HMRC monthly
3. the subcontractor is subject to a 30% deduction applied to the labour elements, which is paid to HMRC monthly.

For CIS purposes, invoices are only comprised of material and labour elements. It is the contractor’s responsibility to ensure that the materials element of the invoice is not overstated by the subcontractors.

Is the subcontractor really self-employed?

CIS does not apply to payments made to employees, since payments to employees are covered by the PAYE/NIC system. However CIS does apply to self-employed subcontractors and individuals. It is the contractor’s responsibility to ensure that the employment status of the individuals is correct and it should be reported to HMRC via the CIS monthly returns. Whether an individual is an employee is a matter of law and depends on the facts and the terms of the agreement with the contractor.

It is important for contractors to get the status right as they can be held liable for any PAYE/NIC underpaid. They should also make sure to check the status regularly to ensure nothing has changed.

CIS maintains a registered database of subcontractors – those subcontractors with a history of good compliance and a turnover above a certain threshold hold Gross Payment Status (GPS) where no tax deduction is applicable, with the remainder having deductions made by the contractor under a construction contract.

What are the contractor’s responsibilities ?

• Registering with HMRC
• Ensuring the status of any workers or sub-contractors is correct
• Verifying the identity of its sub-contractors
• Deducting tax from payments to sub-contractors (not employees subject to PAYE)
• Providing written statements to sub-contractors
• Keeping records
• Submitting monthly returns to HMRC
• Notifying HMRC of certain changes to its business.

What are the subcontractor’s responsibilities?

• Registering with HMRC to ensure tax is not deducted from payments by the contractor at 30%
• Ensuring the contractor has sufficient information to verify the sub-contractor’s status with HMRC
• If registered for gross payment, ensuring its continuing compliance with the requirements for such registration
• Keeping records
• Notifying HMRC of certain changes to its business.

Are there any exceptions to CIS? 

There are many exceptions to CIS which include:

• payments of a reverse premium (ie. landlord to tenant for fit out costs)
• payments by a charity, public sector body or certain schools (this does not apply to their trading subsidiaries)
• deemed contractor payments are exempt if expenditure relates to offices, warehouses, nursing homes and any other facilities used for the business ie. for self-build purposes (under Regulation 22, SI 2005 No 2045).

What about penalties and typical CIS problem areas?

The contractor must file monthly returns with HMRC from the date that they have registered. If a contractor fails to submit the monthly CIS return on time, penalties of £100 are levied even if the return is one day late. If the return is two months late, the penalty is £200. If six or 12 months late, a penalty of £300 or 5% of the CIS deductions (whichever is higher) is applied at each interval. If the return is more than 12 months late, an additional penalty of £3,000 or 100% of the CIS deductions (whichever is higher) may be levied.

Appealing penalties with HMRC is most often not a straightforward process and, unless there are reasonably extenuating circumstances, an appeal is unlikely to be successful as evidenced by the many cases before the First Tier Tribunal. Therefore care should be taken by contractors.

In addition, we have seen a number of recent enquiries by HMRC into non-compliance with CIS generally but also specifically:

• how materials have been reported and the split out on invoices raised
• employment status of workers
• if the total contract has been included, rather than just the ‘construction’ part
• have the rules been applied to all construction payments – for instance:
  • a business involved with installing entry phones is not within the remit of CIS, but a company providing door access systems is
  • the treatment of project management is frequently considered to be outside the scope of CIS when actually it is caught
  • stained glass windows are included with CIS but sculptures are not.

What future changes might we expect to CIS?

Since taking form in 1971, CIS has been modified with a major reforms in 1999 and April 2007. There are further reforms and plans afoot to tackle worker status issues in the industry, which contractors and subcontractors should be mindful of:

• 6 April 2019 – extension of existing security deposit legislation to include corporation tax and the CIS
• 1 October 2019 – address the fraud provision of labour, by introducing a domestic ‘reverse charge’ for the construction sector whereby the customer in the transaction is responsible for accounting the VAT
• compliance for those obtaining and holding GPS will increase.

Top Tips

• Be aware of your obligations as contractor and/or subcontractor under CIS:
  • register with HMRC and file monthly returns on time
  • only construction operations are caught – consider whether an exemption applies
  • subcontractors must be self-employed, and their status periodically reviewed
  • ensure CIS is applied to all the necessary payments; often invoices in other parts of the business can slip through
• Have a process in place to identify construction contracts and report all subcontractors as applicable on the CIS returns
• Have an adequate process in place to capture all that is needed
• Keep updated with future and ongoing changes to CIS
• Seek specialist advice where necessary to ensure compliance with the latest CIS requirements

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Building a BIM solution

A new partnership, designed to tackle challenges in implementing BIM within construction companies, has been announced.

Balfour Beatty, Leeds Beckett University, White Frog Publishing and Coventry University have come together in a new partnership to create a new, automated solution to tackle these challenges.

BIM is an intelligent 3D model-based process that provides insight and tools to more efficiently plan, design, construct and manage buildings and infrastructure.

Whilst the benefits to embedding BIM into everyday working practices are clear, the industry hasn’t embraced the technology in a way similar to other technologies such as drones, due to a lack of access to the level of design information required at an early stage to effectively use the tool.

The project will see the collaborative team explore how BIM can become more automated by developing a plug-in software solution, with the aim of assisting users in complying with BIM standards and meeting Government targets by adopting BIM as part of the Construction 2025 Strategy to reduce time and cost of construction.

The project is part of a wider £12.5M investment programme from Innovate UK and financed by the Government’s Industrial Strategy Challenge Fund in innovative projects aiming to improve productivity, quality and performance of the UK construction sector.

Rachel Sudlow, Project Lead and Continuous Improvement Project Manager at Balfour Beatty, said: “As an industry leader in the development and integration of BIM, the new automated software tool is yet another step forward in driving change and allowing the industry to fully realise and enjoy the benefits of BIM across complex infrastructure and building schemes.”

“Balfour Beatty has been using BIM for the last decade; drawing on our expertise and application of digital technologies, we’re proud to be collaborating with our partners to develop a solution which will benefit the industry as a whole, both clients and contractors alike.”

Dr Saheed Ajayi, Senior Lecturer in the School of Built Environment and Engineering at Leeds Beckett, and the Academic Leader of the project, said: “The challenges companies are facing include: the learning curve embracing the new technology and getting everyone involved to use it; the need to comply with set standards and codes of practice; and the need for sufficient information about the building to accompany its 3D representation.

“Companies do not know what format the information should be in and how much information to include – there is currently no standardisation. Through the research and innovation with Balfour Beatty, we are pleased to present this solution to the industry”

The research team will develop the automated BIM solution over a two year period, with the project to be shared with the wider industry in 2021.

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Government gives go ahead to Thames Estuary 2050

The government has pledged a multi-million pound package of commitments to drive forward the Thames Estuary 2050 vision. The project will create jobs, build new homes and boost local economic growth.

The package is in response to the Thames Estuary 2050 Growth Commission’s 2018 report, and its ambitious plans to create 1.3 million new jobs and generate an extra £190Bn for the local economy.

Communities Secretary Rt Hon James Brokenshire MP also put forward a number of new measures as part of a wider government support to realise the vision, including:

• £1M to establish a new Thames Estuary Growth Board oversee and drive economic growth plans for the area
• £4.85M to support local partners to develop low-cost proposals for enhancing transport services between Abbey Wood and Ebbsfleet

a Cabinet-level Ministerial Champion will be appointed to act as an advocate and critical friend for the region within government will also be appointed

Communities Secretary, the Rt Hon James Brokenshire MP, said: “The Thames Estuary has long been a gateway to the UK economy and has enormous untapped potential, which has the power to benefit those that live and work in the area.

“Having considered the recommendations of the Thames Estuary 2050 Growth Commission, I have announced a number of steps we are taking to unlock an even brighter future for the Estuary’s economy, marking the beginning of a new and bolder approach by this government to support the area.”

Encompassing East London, North Kent and South Essex, the Thames Estuary has the potential to support growth right across the country. Served by international airports and seaports, it is home to an internationally-significant financial services cluster at Canary Wharf and is achieving huge success as a cultural and creative powerhouse.

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Infrastructure is the driving force behind construction in 2019, find out more at the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

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Upgrade planned for Sunderland roads

Sunderland roads will receive a $40.5million upgrade including a new dual carriageway to improve the local economy.

The government’s upgrade to Sunderland roads is projected to dramatically reduce journey times and improve the local economy through better connections. It is also hoped the upgrades will help support thousands of new jobs and homes.

In total, the project will cost £70.2million and forms part of extensive plans to improve transport across the north. The work will upgrade part of the A1231 road between the Northern Spire Bridge and the city centre into a dual carriageway, cutting each journey by an estimated two and a half minutes and preventing traffic jams.

Jesse Norman, Roads Minister, said: “The government is investing record amounts to improve travel in towns and cities across Britain.”

“Sunderland is a great city with a great future. We hope the schemes we are funding will help to unleash its potential – creating jobs and enabling new homes – and turbocharge the Northern Powerhouse.”

The stretch of road provides access to a number of prominent local businesses including the Nissan car manufacturing plant, the Enterprise Zone, and the International Advanced Manufacturing Plant. It is also planned to allow for regeneration on both sides of the river, freeing up land for 1,000 new homes.

The North East will also receive £10million investment from the government’s Transforming Cities fund for cycle and bus routes. Transport Secretary Chris Grayling announced the funding, promising extra routes for Sunderland.

The government’s fund will provide £1.3billion for 12 cities across England to improve transport. Recently, work also started on the £125million Testos Roundabout scheme and a new triple-decker roundabout on the A19, and Sunderland is also invited to apply for the government’s Future of Mobility competition which will award four cities pilots of innovative new transport technologies to improve people’s journeys.

If you would like to read more articles like this then please click here.

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Funding secured for Nottingham medical technologies facility

Nottingham Trent University has secured funding for its state-of-the-art Medical Technologies Innovation Facility.

The Medical Technologies Innovation Facility (MTIF) will develop healthcare products and advanced materials and is expected to generate up to 1,000 jobs.  The £23million funding has been secured through DN2N Local Enterprise Partnership which also manages the Local Enterprise Zone.

It is estimated the centre could add £50million to the local economy as well as creating jobs and expanding the university. The D2N2 Infrastructure and Investment Board will award £9.7million in funds and approval for a second phase of development at the University is awaiting approval of designs.

The firm GSS Architecture will act as project managers, lead consultants, architects, principal designers, and quantity surveyors on the project. The building will include research and office space as well as social spaces and meeting rooms with the aim of encouraging collaboration between different researchers.

The centre will focus on reducing the time and cost it takes to create medical technologies and put them on the market. The building will include specialised spaces for specific scientific research including advanced textiles, robotics, and medical devices.

The building at the Clifton Campus will be the first of two that will make up the complete MTIF facility and compromise engineers, scientists, designers, clinicians, inventors, and entrepreneurs. The second, at the Nottingham Enterprise Zone, will focus on pilot production, manufacturing, commercialisation, and quality assurance.

Construction is expected to start later this year and be complete in 2020. In total, the project will create 35,700 sq ft of floor space over the two locations, and further approval is awaiting phase 2 (Enterprise Zone) with plans having been submitted to the local council.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019. 

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I want to make Britain’s roads 90% recycled

How long will it be before the roads you drive on are almost entirely made from recycled material? We speak to Bruce Spencer-Knott, MD of Minster Surfacing.

Bruce Spencer

With the wealth of technology that’s now available, there’s no reason why they can’t be and, given the impact that road surfacing has on the environment, they absolutely should be.

As construction materials go, the production of virgin asphalt takes a hefty toll on the environment. Asphalt is made from distilled crude oil and mineral aggregate, two resources that are finite and in short supply in this country and around the world. These ingredients have to be refined, combined and transported long distances, amounting to a significant carbon-cost. Furthermore, as the cost of crude oil rises, so does the cost for road surfacing. Meanwhile, the construction sector is constantly hungry for minerals so the quarries in this country are racing to meet demand while doing what they can to avoid irreparably scarring the landscape.

Depending on traffic and climatic conditions, a well-laid asphalt surface has a lifespan of around 25 years on average, after which it will need to be relaid. This means that just as frequently as we’re laying roads, we’re ripping up old ones, so how much better would it be if we could lay those new surfaces using all the materials that we dig up from the old ones?

Well the technology exists and to an extent, we’re already doing it: My company, Minster Surfacing is routinely recycling old roads to create new ones using the latest technology. We utilise an on-site closed loop manufacturing process developed by OCL Regeneration. With a mobile recycling plant to produce CBGM & Foambase, which are high quality alternatives to hot asphalt and binder course products made using the material we remove from the same location. This technology dramatically increases the amount of material that can be recycled, it cuts waste and it means large quantities of material no longer needs to be transported long distances to where a team is working.

Meanwhile, a significant quantity of the asphalt we can’t produce ourselves is made from secondary aggregates. This aggregate is made using by-products from steel manufacturing instead of using aggregate from quarrying.

Partnering with OCL Regeneration in this way, Minster is now recycling tens of thousands of tonnes of the material we remove from roads and use it on-site to create the new surface which is around 50% recycled on average. The recycled material that we produce can be laid using the same tools and techniques as used for traditional hot asphalt and they are just as hard wearing. Producing this material produces 32% less CO² than the production of traditional hot asphalt and we can use the same process to convert other material that would go to waste, including concrete and rubble, giving us a ready to use supply of recycled material that can create new surfaces.

Using this technology, we can create the material we need as we work, where we work, using the material that we extract from our work. It’s a great thing to see in action with a much lower carbon cost, a considerably reduced reliance on non-renewable resources and it prevents us from sending hundreds of thousands of tonnes of material to landfill.

This use of recycling technology has helped us win a number of environmental and industry innovation awards, but you may be wondering why every other road surfacing company isn’t able to recycle as much, and you may also be wondering why we can’t currently make roads that are 100% recycled.

One of those reasons is a material which used to be used to make roads in this country called coal tar. While coal tar has medical and industrial uses, the environment agency classify asphalt waste containing coal tar as hazardous. Because of this, many companies won’t touch it and so it has to be safely disposed of. That can cost up to £100 per tonne and it means that all of the material goes to waste, even if the coal tar amounts to just 0.1% of the material.

Whichever way you cut it, sending vast quantities of material to landfill is a waste, especially when environmental regulations do allow for the material to be safely reused and recycled. Even material which is over the 0.1% coal tar can be safely re-used in-line with environmental and local authority standards as a base-layer for a new road. Using our recycling technology, we can reuse this material, saving vast quantities of useable product from going to waste, saving the taxpayer money, giving us an almost constant supply of aggregate and reducing the need for more minerals to be quarried and transported.

Around 50% of roads contain coal-tar, so if this responsible re-use of the material is embraced across the industry and by all local authorities, we can dramatically increase the amount of material that we can recycle on our roads.

Another reason why recycling still isn’t the norm on British roads is a wider problem within the industry. I’m constantly impressed by the dedication many firms have to innovation and technology, but while these companies are embracing new ways of working and making great efforts to work sustainably, there are others that aren’t. Overall, there is a perception among the general population that road surfacing is, and always will be, a dirty, pollutive, low-tech industry and people are unaware that there are greener ways of working. This leads to organisations reaching out to any  contractor that can lay a surface or choosing the cheapest company on the tender list because they aren’t aware of the high-tech, sustainable alternatives that could bring so many benefits.

As a whole, the innovators need to do more to raise awareness of the fact that road surfacing is very different to the ‘man in a van’ image people have of it. Unless the wider population begin to understand and appreciate the wealth of technology and innovation that’s transforming the industry, trailblazers will continue being undercut by rivals who just get the job done without any regard for recycling or sustainability and this will mean the roads continue to be laid using new material, with large volumes going to landfill.

These are some of the issues that are holding back recycling across the board in road surfacing, but how can we create roads that are 90% recycled?

Currently, it’s still the case that the very top layer of a road should be virgin asphalt to guarantee a smooth, unblemished surface that will meet all local authority requirements, but the 100mm thick base layer and 100mm thick binder course can be almost entirely recycled. If we were able to routinely work to this level, we could eliminate almost all of the waste produced from road surfacing and dramatically reduce the industry’s reliance on quarrying and crude oil. We can even make good use of all the countless tonnes of material that’s been sent to landfill previously and use it to meet our future demand.

While the mobile recycling plants we use enable us to recycle on-site to create CBGM & foamed bitumen material for the base layer and the binder course, we would be able to increase our recycling capabilities further if we were to supplement this with our own asphalt production facilities to produce material that’s up to 95% recycled.

The difficulty in achieving this is in making sure that we can have a guaranteed supply of 95% recycled asphalt pavement (RAP) that’s close to the point of use to avoid the carbon-cost of transportation and which can be commercially viable. This would be a significant investment, but I’m dedicated to using technology to improve the way we work and I’m passionate about the goal of making road surfacing a greener, more sustainable industry so I’m sure that we can do it.

Road surfacing has long been seen as a necessary evil – a dirty, pollutive and resource intensive industry, but I’m confident that we can achieve my ambition of making every road we work on almost entirely recycled and I’m excited by the potential of the latest technologies available.

Road surfacing can be just as high tech and sustainable as even the most progressive parts of the construction sector, we just need the confidence to embrace the technology available and explore new, better ways of working.

If we can achieve this goal of practically eliminating waste and the need for new material, we could make this industry one of the most environmentally friendly parts of the construction sector

The future of the black stuff could be very green indeed.

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Housing accelerator boosts construction in West Sussex

A further boost has been given to the Northern Arc project at Burgess Hill in West Sussex, with Homes England confirming more investment for the site.

An extra £63M from the Government’s Land Assembly will be provided, allowing the construction of key infrastructure for the project including: roads, a bridge, landscaping, drainage and utility works; to be accelerated, bringing the construction of some 1,250 homes forward.

The site will provide new family houses – including 30% affordable homes – with Countryside Properties UK being the first developer on site, building 460 Homes at the Freeks Farm area.

Countryside will start building the first phase of 460 homes in March 2020, on the east of the site. It is expected that these will be completed from December 2020, providing a mix of apartments and one- to four-bedroom houses. Their proposals prioritise design quality and use of Modern Methods of Construction.

Stephen Kinsella, Executive Director, Land at Homes England, said: “As the Government’s housing accelerator we’re using our land, money, powers and influence to make homes happen in the places they are most needed.

“This funding boost, alongside the appointment of the first developer, represents further great progress for the Northern Arc. We can now make move quickly towards starting on site and constructing quality new homes and facilities for the local community.”

Minister of State for Housing, Kit Malthouse MP, said: “Burgess Hill is a shining example of how our £1.3Bn Land Assembly Fund is rising to meet the challenge of delivering more, better, faster home construction – helping to deliver up to 3,500 extra homes for the people of Sussex.

“It’s all part of how this Government is supporting the delivery 300,000 new homes a year by the mid-2020s, helping a new generation to realise the dream of home ownership.”

Phillip Lyons, Chief Executive, Housebuilding at Countryside Properties, said: “Being able to influence the design and quality for this the first phase of the Northern Arc in Burgess Hill is very exciting. We at Countryside are incredibly proud to be a part of this fantastic project, working collaboratively with Homes England to create places people love.”

If you would like to read more articles like this then please click here.

Infrastructure is the driving force behind construction in 2019, find out more at the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019. 

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New fund for homes in garden towns

A new £3.7M fund will provide homes in garden towns across the country in chosen communities.

Five garden towns across England have successfully bid for a share of a £3.7M fund to fast track work on 64,000 new homes. The communities will access the survey and planning work funds needed to begin the projects.

The winning communities are:

• Grazely Garden Settlement, receiving around 15,000 homes
• Hemel Garden Communities, receiving around 11,000 homes
• Easton Park Garden Community and North Uttlesford Garden Community, receiving around 18,000 homes
• Tewkesbury Ashchurch Garden Community, receiving around 10,195 homes
• Meecebrook in the north of the Stafford borough, receiving around 10,000 homes.

Minister of State for Housing Kit Malthouse MP said: “These new towns will not only provide homes for families, but will be vibrant communities where everyone, including neighbouring communities can benefit from new infrastructure – leaving a legacy for future generations to be proud of.”

“I congratulate these councils who have put forward ambitious proposals, which will build many thousands of high-quality homes, and am pleased to support them as they work to make these plans a reality.”

The funds will go to local councils to provide the infrastructure and planning needed to support new homes and current residents in the communities. The government plans to improve the local economy of these areas, tackling the housing crisis and improving opportunities in rural areas.

Currently, the government is supporting 23 other garden town projects in areas including Carlisle, Merseyside, and Lancaster. An extra £9M has been given to existing garden town developments by the government.

Around 100 proposals were submitted for the funding with the five winning communities due to receive an initial £750,000 funding to begin work. The government is aiming to reach a target of 300,000 new homes by 2020, with an emphasis on green energy and sustainable building methods such as modular construction and recycled materials.

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Highways England announces trans-Pennine roads study

Highways England has announced a major roads study to improve road links in East Lancashire and Yorkshire.

The £300,000 roads study will look at major improvements on the M65 to improve road connections. The study is set to start in April and will connect communities like Skipton, Keighley, and Bradford.

Transport Secretary Chris Grayling announced the study to improve journey times and congestion. There are a number of businesses along the route which could see the benefits of improved connections, along with the northern economy as a whole.

Highways England Chief Executive Jim O’Sullivan said: “This study will look at the issues currently facing road users in the trans-Pennine corridor, the extent to which the lack of strategic connection hinders growth, and options for improving those journeys and boosting economic growth. It will also look at how improvements could be used to support other trans-Pennine routes such as the M62.”

The initial assessment will consider potential new links and take into account environmental factors, difficult geology, potential economic benefits, and feedback from users. Highways England is planning to release its findings in the Autumn and deliver a Strategic Outline Business case for ministers to help them consider any potential future investment.

Transport for the North (TfN) is a Government programme aiming to improve transport links across the North. Over £13Bn has been invested so far, in keeping with the Government’s Northern Powerhouse strategy.

Currently, there are no strategic routes for trans-Pennine traffic and what alternative routes there are suffer heavily from congestion. Chris Grayling has highlighted the government’s aim to create safer, more reliable, and faster routes to improve the northern economy.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019. 

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Building higher casts shadow on rights to light

Following the Spring Statement last week, the announcement to add additional storeys to buildings without planning could have serious consequences on rights to light for existing property owners. In this article, Daniel Wade, Rights of Light Director at Trident Building Consultancy, discusses what this could mean for property owners.

The content of the Chancellor’s Spring Statement washed over many in the property profession as the Brexit storm continued.

But the decision by Philip Hammond to allow upwards extensions through Permitted Development (PD) Rights is significant news. The announcement, which forms part of a package of initiatives to breathe life into the ailing high street, is set to go ahead via regulations due this autumn and followed an extremely contentious consultation earlier this year.

In the absence of a planning process to scrutinise projects that will add to building heights, the issue of Rights of Light (ROL) becomes a very serious consideration, and one with significant consequences.

ROL is a form of easement in Common Law which entitles property owners to benefit from a certain level of light, which can be measured (before and after construction) by technical ROL assessments. A ROL may be acquired by an aperture that has enjoyed a level of light uninterrupted for 20 years. There are many other ways apertures can also enjoy this right.

Because Daylight and Sunlight assessments are usually a component of a planning application, they are currently required at an early stage in the process. The planning system also necessitates that local residents are consulted on a planning application, allowing those with legitimate concerns to assert their point of view. With this step removed, developers could potentially proceed unaware of any objections – resulting in building works then being halted through an injunction either during the process or post-completion.

So while developers might look set to gain from the opportunity to create additional storeys and in doing so, increase the net lettable areas of commercial properties, in reality the situation is precarious. Without the stringent procedures and ultimately the reassurance that the planning system offers, developers could potentially embark on building works and only on completion suffer significant consequences. This could be anything up to a year post development and in extreme cases up to six years.

In fact, there is already precedent ordering new construction to be torn down in such circumstances. In 2010 the courts ordered the demolition of the top storeys of a building in the centre of Leeds because it obstructed a neighbour’s natural light. Needless to say, following this case there has been a significant increase in the public’s awareness of their rights.

The likely result of this change in policy is that we will see an increase in the number of both investigations and claims. Although we anticipate that the permitted development rights will take into account issues including overlooking and overshadowing, it is unclear how this would be implemented.

Strategically-minded developers may seek to prevent or extinguish Rights of Light from being acquired by issuing a Light Obstruction Notice (LON) for a period of 12 months prior to construction – after which, nullifies a claim for light if left unchallenged, thereby resetting the prescriptive 20 year clock.

It is unsurprising that the number of professionals offering expertise in this area has grown considerably in the past years. Having worked for an ROL specialist for many years, I saw considerable benefit in joining Trident, which, as a multidisciplinary building consultancy, has the ability to advise both (would-be) developers and neighbours in the context of the bigger picture.

As land values increase and buildings grow taller, ROL has become increasingly important. Combining PropTech, extensive theoretical and practical knowledge, and the support of its national network, Trident’s growing ROL team has the capacity and resources to meet the demands of all project sizes, in all locations.

While permitted development rights offer some freedom, too much freedom can be dangerous: pushing risk further down the line only increases risk. So developers are advised to seek professional advice at an early stage to avoid the significant expense of having to pull down an extension and begin again.

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Fundraising appeal launched to build Macclesfield cancer centre

A fundraising appeal has been launched to raise £23M for a new cancer centre at Macclesfield hospital.

The Christie hospital in Manchester is one of the world’s leading cancer hospitals, and the Christie charity is due to begin work on a new cancer centre in Macclesfield later this year. The NHS foundation trust has launched an appeal to raise £23M to complete the work.

The Christie Cancer Centre will serve 1,500 new patients in East Cheshire, providing radiotherapy, chemotherapy, outpatient care, holistic support and information services. The centre will be built at Macclesfield District General Hospital and is due to be completed in 2021.

Louise Hadley, Director of Fundraising at The Christie, said: “The Christie charity provides enhanced services over and above what the NHS funds and the support we receive makes a huge difference to the care and treatment that we provide to our patients and their families.”

“This new Christie Centre at Macclesfield is an ambitious project to transform cancer care for thousands of patients who use our services every year. To make it happen we need to raise £23m. We’re planning lots of exciting fundraising events over the next 12 months and we’d love the people of East Cheshire and beyond to really get behind this fundraising campaign and get involved.”

The new centre will provide care for 40,000 patients in the area around Cheshire, Staffordshire, and Derbyshire. The location will cut down journey times, a benefit in particular for patients who need regular appointments.

The new centre has been designed to accommodate frail and disabled patients, with measures such as additional rails, calming environments, fall reduction measures, and large signage. The centre will have the capacity to deliver 4,000 chemotherapy treatments and 15,000 radiotherapy treatments a year, with two linear accelerators, outpatient facilities, specialist examination rooms, a CT simulator, counselling and therapy facilities and has been designed to resemble the Manchester hospital.

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£54M Shrewsbury relief road approved

A new multi-million pound relief road, which will provide drivers in Shrewsbury with smoother journeys, has been approved by Transport Secretary Chris Grayling.

The Department for Transport will provide some £54M in funding for the North West Relief Road – between Battlefield Link Road and Oxon Link Road – resulting in a new, single-carriageway route taking traffic out of the town centre.

This will not only significantly reduce congestion, but it will also lead to improved air quality in the town centre.

Transport Secretary Chris Grayling said: “The North West Relief Road is just what Shrewsbury needs to reduce congestion in and around the town.

“We are investing £54M in this exciting new scheme, helping drivers get from A to B more quickly, while improving air quality for residents.”

The scheme will also include two new bridges, and accessible crossings allowing cyclists, pedestrians and vulnerable users to travel safely.

Steve Davenport, Shropshire Council’s Cabinet member for highways and transport, said: “This announcement is brilliant news and means that our thorough and detailed business case for a Shrewsbury North West Relief Road has been recognised and supported by the government. Today’s announcement really is the culmination of many years’ hard work by a great number of people and it’s been a real team effort between council officers, councillors, MPs, our engineering consultants and many more.

“The North West Relief Road will benefit not just Shrewsbury but the whole of Shropshire and, though there is some way to go before the road is built and in use, securing this funding from the government is a huge step towards making this much-needed road a reality.”

This funding comes in addition to a £1.8Bn investment in improving motorway and schemes across the Midlands, as well as providing £176M in the past year for road maintenance and small transport projects.

Work on the scheme is anticipated to start in 2022.

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If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019. 

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Call for occupational health training following report

Construction companies of all sizes are being urged to provide at least one employee with occupational (OH) awareness training following a new report from Loughborough University which highlighted the lack of training particularly in SMEs.

The report from Loughborough University, Improving occupational health risk management in SMEs: the role of major projects,  looked into how major projects such as the construction of the Defence and National Rehabilitation Centre (DNRC) can support their supply chain to develop good practices in occupational health.

The research, which was carried out in the School of Architecture, Building and Civil Engineering at Loughborough University, was made possible after they were named recipients of the B&CE Charitable Trust OH Research Award 2016 worth £25,000.

In light of the report’s findings, B&CE are calling for Occupational Health Training to be more commonplace within all sizes of organisations, plus improved training materials and increased education regarding OH obligations.

Commenting, Margaret Grahamslaw, Head of Occupational Health at B&CE, said: “These recommendations centre around the importance of training in occupational health awareness to ultimately improve the wellbeing of workers in the construction industry across the UK.  By ensuring at least one member of staff in any company, regardless of size, is trained in this area, this can encourage the spread of knowledge in both common OH issues and those that are less well understood.

“We’re grateful that our charitable trust could provide Loughborough University with the funds to facilitate this important research and look forward to using our joint voices in the industry to make these recommendations a reality in construction.”

Lead researcher, Dr Wendy Jones, Loughborough University said: “Health often ends up as the poor relation of safety in construction, and it can be particularly difficult for smaller companies that don’t always have the right expertise, or who have limited budgets, to get the right arrangements in place. This research found that some small and micro employers are improving their management of hazards such as dust and musculoskeletal disorders as a result of working on major projects such as the building of the DNRC, which the research was centred on. This is good news and confirms that good practices ‘trickle down’ through the sector for health, as they do for safety.

“We still have a long way to go, particularly in terms of the way we educate our workers, managers and OH professionals about managing health risks and the way the industry manages health surveillance: but this research shows we are heading in the right direction.”

The research report, which includes recommendations for those leading on major construction projects and for the industry more widely is available here.

The B&CE Charitable Trust OH Research Award is awarded annually to research initiatives that aim to improve the occupational health in the construction industry. Applications for the 2019 award open later this year.

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Coventry CC to trial modular construction

Coventry City Council is to trial the use of volumetric modular construction homes in a bid to tackle housing shortage in the area.

Working in partnership with with Whitefriars Housing Association, the council-led project will see the Littlethorpe site in the Willenhall district of the city transformed to provide much-needed family housing.

The pilot project is based on the construction of two Totally Modular homes, one two-bedroom, and the other with three bedrooms. Work on the homes is set to begin in early 2019. As they can be built quickly and to exacting standards in a factory environment, it will not be long before they are transported to the Littlethorpe site where they will be lifted on to pre-built foundations and connected to water, gas and electricity supplies.

The homes will be built by Totally Modular Ltd at its factory in Cradley Heath before being transported to the site and installation will then take a matter of hours, hugely speeding up the process of creating new highly efficient top-quality homes.

Totally Modular houses are built around a strong steel frame and come in several sizes and configurations. Externally they can be clad in almost any building material, so can be made to match existing local styles or offer an exciting modern style. Built-in internal fittings are all to a high standard and include fully equipped kitchens and bathrooms, alongside already decorated bedrooms and living rooms.

The purpose of the project is to pilot the process and confirm the finished homes can offer a fast and efficient way to address the city’s housing needs. If successful, many modular homes could be built at various locations in and around Coventry, thus helping alleviate the shortage of social and affordable housing, while providing additional employment opportunities.

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Mayor and chair lay foundations for Northern Rail

Andy Burnham, the Mayor of Greater Manchester, and Allan Cook, Chair of HS2 Ltd, highlight the importance of HS2 in realising the ambitions of Northern Powerhouse Rail.

The two leaders met last week as Mr Cook visited Manchester as Chair of the company building Britain’s High Speed railway, in a clear indication of the commitment from the two to see rail improvement across the North.

Allan Cook, Chairman of HS2 Ltd, said: “HS2 creates the foundations for Northern Powerhouse Rail to spread prosperity across the whole of the North. Together they will make it easier for people to move between towns and cities across the North and the Midlands. Commuters will experience more comfortable and less stressful journeys, and businesses will benefit from better connections with each other and their customers.

“So it’s not a question of either or, we need both. Having Northern Powerhouse Rail without HS2 is like having the M62 without the M6 and the M1.”

Andy Burnham, Mayor of Greater Manchester, said: “The North has huge economic potential but we have been held back because our transport infrastructure is simply not good enough, with a lack of capacity to support fast and frequent connections for routes serving our towns and cities. HS2, linked with Northern Powerhouse Rail, can act as a catalyst for local growth and supporting UK plc. Together, both could support a doubling of the economic output of Greater Manchester to around £132Bn by 2050, contributing at least 40,000 new jobs and 13,000 new homes to the local economy.

“The North needs to come to the front of the queue for transport investment and HS2 would be the catalyst for making that happen over the coming decades.”

Northern Powerhouse Rail is the proposed railway upgrade programme that will link towns and cities across the north, delivering radical changes and much improved services and journey times. HS2 is the new high speed train line that will link over 25 towns and cities from Scotland through to the South East, joining up nearly half of the UK population, and is set to deliver £92 billion of benefits to the UK economy.

Across the country HS2 station sites have been preparing for the arrival of the new railway by drawing up economic plans to take advantage of better connections across the country. The redevelopment plans for Manchester have the potential to deliver 40,000 new jobs for the city with both HS2 and NPR working together. This prize will be put at risk if both schemes aren’t delivered.

HS2 is key to unlocking the Northern Powerhouse Rail (NPR) network, and will provide the foundation on which NPR ambitions can be realised. By utilising the spare capacity released on the northern sections of the HS2 network to enable future NPR services, the two projects work seamlessly to maximise the benefits of the UK’s investment in future rail.

There are key corridors that are dependent on infrastructure delivered by HS2 in order for NPR to operate, including:

Manchester – Liverpool (via Warrington): NPR services could use HS2 infrastructure, including the 13 kilometre Manchester tunnel, to serve HS2 stations at Manchester Airport and Manchester Piccadilly. Therefore, it would be possible to deliver NPR’s ambitions for a 30 minute journey between Manchester and Liverpool

Sheffield – Leeds: NPR services could use HS2 infrastructure north of Clayton Junction to serve Leeds HS2 station

Leeds – Newcastle via the HS2 junction: this would enable trains from Manchester, Sheffield and the Midlands to travel via Leeds and on to York and the North East. This could also release capacity for more local and commuter services east of Leeds

Sheffield – Manchester: NPR services could benefit from investment by the HS2 electrification programme on the Midland Main Line

HS2 is scheduled to be completed by 2033, and proposals put forward by Transport for the North, including Northern Powerhouse Rail, are scheduled for completion in the next 30 years.

Works on the first phase of HS2 from the South East to the Midlands are already underway on over 250 locations. Over 7,000 jobs and 250 apprentices are working on the programme, and around 2,000 business have delivered work on HS2.

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If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

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Building change: the future of the construction workforce

The construction industry has experienced a series of uncertainties and labour shortages over the past few years. Looking into what factors are directly affecting the nation, world leading recruiter Randstad has interviewed some of the construction industry’s key players, to find out what needs to be done to future-proof the workforce.

The series of videos explore three topics; mental health, diversity and technology, bringing to life the impact they have on the construction workforce, while demonstrating forward-thinking tactics to educate employers and help raise awareness of industry issues to workers.

Viewers can hear first-hand from the Lighthouse Construction Industry Charity’s CEO Bill on the importance of mental health, Vinci Construction’s Commercial Director Samantha speaking on diversity and her experience of coming out as a transgender female within the industry, and Costain’s Group Innovation and Knowledge Manager Tim, who explains the benefits of using modern technology in construction.

The underlying message behind the latest campaign is that there is still a long way to go before today’s construction workforce feel confident in their employers when it comes to diversity and mental health. While some employers are leading by example, a 2019 survey of over 1,000 construction workers carried out by Randstad revealed that over half (54%) don’t feel that construction companies are doing enough to support diversity within the industry. When it comes to mental health the stats are even more alarming. 69% of construction workers surveyed this year by Randstad* believe that construction companies aren’t doing enough to support workers facing mental health challenges.

Randstad UK Construction, Property and Engineering Managing Director, Owen Goodhead said: “There has been some positive steps in the right direction to help educate and inform the future construction workforce, however there is still a long way to go. We’ve been working hard to get mental health on the agenda for many employers through a series of campaigns over the years, however we recognise that more needs to be done in other areas to attract more to our industry to help plug the skills gap.

By tapping into the minds of some the industry’s key experts, we’ve been able to hear directly from those who are really driving change within their organisations and moving the workforce in the right direction. We need to act fast to drive change and influence other employers, while at the same time educating and inspiring the future workforce by bringing these sometimes unspoken discussion areas to the surface.”

With construction being one of the biggest contributors to the UK’s GDP, accounting for 6.3% in 2017 and employing 10% the UK’s workforce, any negative changes to productivity are a real cause for concern. Key learnings must be shared in order to promote the importance of construction to the upcoming generation of workers and attract skilled individuals.

To hear more from the industry experts, visit: https://www.randstad.co.uk/future-of-the-construction-workforce/

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How our sector can meet its sustainability commitments in 2019

As we look forward into the year and soon to be a new decade, sustainability is at the top of the agenda for every sector and in particular, the construction industry. With pressure on resources increasing, every player in the industry must work to balance short-term demand with long-term prosperity both for themselves and the planet. However, as technology and innovative thinking develops we’re coming to realise that these two aims aren’t diametrically opposed: in fact, they can work hand in hand.

So, how can our sector meet its sustainability commitments in 2019 and beyond? We speak to Kevin Lyons, Director at Lyons O’Neill about the challenges.

KevinLyons

There are three main areas bursting with potential for sustainable practice which the industry can’t afford to ignore.

1. New ways of working

January saw the International Organization for Standardization (ISO) launched its new global standards for Building Information Modelling (BIM) [ISO 19650-1 and ISO 19650-2], fully cementing the key role this technological innovation now plays in construction. With the digital revolution helping countless other industries meet environmental targets every level of our industry should be embracing BIM for the most efficient, sustainable projects. The benefits of being able to virtually design project plans cannot be underestimated, as any flaws and issues are immediately picked up and rectified before ground is broken. Added to this, the ability to share designs on the go (one of the software programmes we use has a specially developed app for tablets and smartphones) means that everyone is up to date with real-time information so there’s no costly confusion. BIM is therefore a clear example of where the construction industry’s long and short-term goals overlap to become one and the same. Working efficiently, reducing programme time and resource waste is not only a crucial step towards a sustainable future but can also help cut individual project costs, with the ISO stating that incorporating its use could save over a fifth in construction costs. From any angle, therefore, BIM is a vital investment for every construction firm.

Another new way of working which can help us meet our sustainability commitments is Modular Construction. Although transport costs and emissions must of course be factored in, the ability to produce units off-site and manoeuvre them into place could mean more than just overcoming the logistics of site constraints. Studies suggest that off-site construction in general can reduce waste by up to 90%, not to mention minimising impact on the site’s local environment through drastically cut vehicle movements. Modular construction is often discussed in conjunction with residential projects but there’s no reason why this working practice can’t be used for structures in other sectors too: our design for Woodcote Primary School saw us work closely with the contractor and modular installar to develop a two-storey modular structure.

Woodcote Primary

However, the most important way of working we all need to develop is our attitude towards the environment: building projects which take into account and work with, not against their surroundings. Admittedly, this is a frame of mind which comes more easily to engineers – with drainage and load-bearing concerns meaning we are always acutely aware of what can be sustained – but is a crucial way of thinking the whole industry must embrace to be serious about sustainability. For example, the sloping site at Redesdale House meant we had to work carefully with the land to create this modern yet lightweight and sustainable structure, meeting the project’s sustainability targets and working with efficiency to minimise disruption to the rural location. But this environment-centric attitude is equally important for urban sites. Our work for Harris Academy Purley in Croydon saw us help the project achieve a BREEAM Excellent rating after designing an infiltration system to discharge surface water from the site to the water table, which earned vital credits for the three-storey school. Again, the in-depth understanding of the local environment required for this is greatly enhanced through technology, with 3D point cloud surveys being instrumental in providing this geotechnical understanding.

2. New materials

However, when it comes to sustainable practice, materials are just as important as methods and there are many new options being developed. As industries the world over seek to replace non-biodegradable, emission-heavy materials with sustainable ones, our sector also needs to commit to the drive for environmentally friendly materials. One such product which has quickly gained a following over the past few years is Cross-Laminated Timber (CLT), a lightweight, layered timber which is recognised for its biodegradability and function as a carbon store, as a plant material. In addition, CLT’s structural strength means it’s suited to projects of any size, and it was all these qualities that made it the perfect choice for a new accommodation lodge for a world-famous football team, forming the two storey structure needed to house a sports facility, gym, treatment area, dining room, and tactics and office space.

CLT can’t solve our sustainability issues alone and there are other new materials being developed (from carbon-absorbing concrete and less-traditionally used plant materials like bamboo, through to compressed earth blocks) and still more we must invest in developing. There’s also much that can be done in increasing supply and demand of recycled building materials, whether that’s timber, steel, or other wastes from projects, which helps a project massively reduce its environmental impact at many levels. However, as with any new product and innovation, progress stems from demand and its only through all levels of our indstry actively pursuing new sustainable building options that we’ll see an even greater range and choice become available.

Harris Academy

3. Renewable energy

Finally, the construction industry has a role to play in an key sustainability issue affecting every industry: renewable energy. From designing buildings which maximise renewable sources to assisting with research and development in this vital area, sustainable energy very much falls inside our sector’s remit. At Lyons O’Neill we’ve been lucky enough to work with one of the UK’s largest installers of photovoltaic cells as they look to create standardised fitting systems for a variety of roof types so that solar energy can become an easy and accessible option for all. We’ve also collaborated with a number of manufacturers in solar energy, helping their research and development teams prepare and fine-tune their products ready for market. Participating sustainability research in this way is something we’re passionate about and it’s rewarding to help demonstrate that solar energy – and other renewable energy solutions – isn’t just a box-ticking exercise for the brochure but a real, practical solution for projects and sectors across the country.

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Demolition begins at RAF Lakenheath

Buildings are being demolished at RAF Lakenheath to build a new flight simulator facility and air hangar.

RAF Lakenheath will be the site of a new flight simulator facility and hangar along with other new additions after the demolition of 18 buildings. Special equipment has been brought in to demolish the reinforced buildings and material will be sent away to be recycled.

The Defence Infrastructure Organisation (DIO) awarded contracts for the construction of an air hangar to Kier VolkerFitzpatrick last year. The contract is work £160million and they are set to deliver infrastructure that will support the first international base for US Air F-35s.

Timber and metal from the demolition will be preserved and recycled and concrete will be ground up and reused on the project. Hydraulic excavators with special attachments are being used to tear down the reinforced concrete and steel structures.

Col. Christopher Leonard, 48th Mission Support Group Commander, said: “Through outstanding teamwork and collaboration with our Defence Infrastructure Organisation mission partners, the 48th Fighter Wing is excited to start the demolition of existing facilities to clear the site for the F-35 campus.”

“This campus will be the home to the first two US Air Force F-35 squadrons in Europe, thus reassuring our commitment and enhancing interoperability with the RAF and our NATO allies. We appreciate the Ministry of Defence and DIO’s commitment and support of US Visiting Forces in the UK.”

Construction will begin in the summer of this year after demolition work is complete. It is expected to benefit the local economy, providing jobs for 700 onsite contractors at the height of work, and making a difference for the 1,000 personnel and their families who live at Lakenheath.

The supporting infrastructure will also include a maintenance unit and storage facilities alongside the new hangars and flight simulator facility. The F-35s are due to arrive in 2021, continuing Lakenheath’s support for the US Air Force in the UK.

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If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019. 

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Celebrating health, safety and wellbeing champions

Some of the best health, safety and wellbeing champions in the world have been shortlisted for the International Safety Awards 2019.

The biggest and brightest in the field will gather at the International Safety Awards in London on 5th April to see who has won the ultimate category awards.

The awards recognise individual contributions to worker and workplace health and safety. Awards for Health and Safety Champion of the Year and Young Health and Safety Champion of the Year will be awarded for the seventh consecutive year. These awards recognise the performance of persons who do not have health and safety as their main responsibility but who have played a major role keeping their colleagues safe and healthy. For the Health and Safety Champion of the Year Award category organisations nominate employees aged 25 or over, whereas the Young Health and Safety Champion of the Year Award is given to a worker aged 16-24.

Shortlisted organisations within the Sector Awards category highlight outstanding sites and business units that operate in the following twelve sectors: Manufacturing; Oil, gas, mining and quarrying; Power and utility; Construction and property; Wholesale and retail services; Transportation, distribution and storage; Hospitality, sports and leisure; Education; Health and social care; Financial, IT, legal scientific and technical services, media; Local government, defence and public service; Onshore major hazard.

Last year, the British Safety Council introduced the Wellbeing Initiative Award which recognises organisations who have improved staff wellbeing. They need to demonstrate a new or unique objective, with a measurable outcome over and above their routine work.

Also, for the second year running, organisations applied for the Innovation in Occupational Health and Safety Award category. The award recognises organisations who have shown a fresh approach to improving health and safety. There needs to be clear objectives and measurable outcomes over and above their routine work expectations.

New for 2019 is the Team of the Year Award category. This recognises outstanding results from a major improvement to health, safety or wellbeing, through collaboration with stakeholders. Stakeholders may include members of their organisation, suppliers, contractors and/or the wider community.

Also, for the first time, organisations could nominate staff and teams for the new Outstanding Bravery Award category. This award recognises staff or teams that have demonstrated an outstanding act of bravery. Without their intervention the situation could have led to significant harm to others, damage to property or even loss of life.

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Time is running out for traditional practices in the construction industry

A leading figure in construction has set out his vision for modernisation of the industry. Speaking at an Enterprise Ireland event at the Embassy of Ireland in London, Mark Farmer, CEO of Cast Consultancy said ‘the platform is on fire’ and warned that complacency is not an option for construction firms that want to survive.

In his keynote address at the event hosted by Enterprise Ireland in association with the Constructing Excellence London and Cambridge-Oxford Clubs, Farmer, author of the UK Government Review of the Construction Labour Market Model in 2016 ‘Modernise or Die’ said the industry was still beset by outdated practices and an inability to address external factors it can’t control. An ‘unholy trinity’ of trends with the potential for a serious crisis in the industry – an ageing workforce, a lack of attraction for new entrants, and geopolitical factors like Brexit – posed a serious threat to the industry.

“We’ve had lots of clarion calls for change in the last 30, 40, 50 years but we’ve, never really had an alignment of these three things,” he said. “More people will be projected to retire from the industry than enter it; the prospect of tariffs and diminishing free movement of labour; and in London around 25 per cent of workers are from EU countries, with up to 70-80% of EU workers on some building sites. The young people of today do not see construction as an aspirational career – they see it as dirty and low tech.”

An insufficiency of qualified personnel now besets the industry “from boardroom to building site” but, Farmer said, recruitment is not the whole solution. “The structural decline in our workforce, both in terms of headcount and competency, at all levels, remains for me the biggest single cause of the growing sense of crisis. But it’s not just about throwing more people at the problem, it’s about changing the entire labour model.”

Radical changes needed

Farmer also drew attention to the radical changes underway in other sectors, most notably automotive and manufacturing generally. With digital technology, machine learning and blockchain now becoming the norm in everything from design, to build and quality assurance, traditional ‘Tier One’ suppliers in construction will find radical ‘disruptors’ challenging from other sectors and from construction start-ups. Professional roles will also become redundant and entirely new skillsets will replace them. He went on to discuss the adoption of Building Information Modelling (BIM) as a digital tool for planning and building in the industry, but said that too often it didn’t translate into efficient building on the site. “The bottom line here continues to be that we need to design differently, procure differently and build differently,” he said.

Speaking after the event, Farmer conceded that since the publication of his 2016 report ‘Modernise or Die’, UK and Irish government policy makers and industry heads had started discussions, but concrete change remained elusive for many.

“I think the industry has woken up,” he said. “Everyone is on the same page with the resourcing crisis around skills. Industry and government are recognising that we have a structural change in skills – that’s creating debate which is necessary for change.

“Although we’re out of the phony war of people thinking we might not have to change…the issue is that some people are struggling to understand how they change and modernise. In particular, how they do that in challenging times in terms of the economy.”

Irish expertise

The event was hosted by Enterprise Ireland, the Irish government’s trade and innovation agency.

“Ireland has long been known for its expertise in the construction industry, from the traditional building procedures to modern methods of construction and the use of technology that is now prevalent,” says Anne Corr, market advisor for the construction sector at Enterprise Ireland UK.

“As with any industry, construction companies need to innovate in order to deliver the best outcomes for their clients. Mark Farmer has a wealth of experience in the construction industry, and we were delighted for him to share his knowledge with our Irish and UK guests.”

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February contracts see upturn

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI has been released, showing the value of contracts awarded in February rise.

The residential sector looks particularly positive with an upturn of 13.1% from January, some £1.7Bn, in contracts awarded during February. Residential unit numbers also increased – up by 5.4% on January at 9,850 units.

Housing and infrastructure have been leading the pack for a while now, proving to be two of the few bright spots in the construction sector over the last year, and February’s figures continue this trend, with infrastructure holding a 13.9% market share. Education follows at a 12.3% share.

The latest release shows the total value of construction contracts awarded in February 2019 was £5.4Bn a 0.5% decrease on January, but 10.6% higher than February 2018.

The largest contract awarded during February was the £250M redevelopment of Chelsea Barracks, where Multiplex Construction Europe will create a total of 88 residential units in a single five-storey structure. The largest infrastructure contract was the £110M redevelopment of the former Royal London Hospital site in Tower Hamlets to provide a new civic centre and council offices. While the redevelopment and extension of the Darwin Building for the University of Edinburgh, took the top spot in Education at £90M.

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Somerset unveils Dutch Hillblock flood defence

A Somerset town has built a Hillblock flood defence based on Dutch design to reduce floods and erosion.

The Hillblock flood defence is designed to absorb the force of waves and withstand erosion through concrete armour. The town of Stolford has been increasingly facing floods due to rising sea levels, extreme weather, and erosion, and has installed the concrete revetment design pioneered in Holland.

Standard rock armour is costly and takes up a lot of space but the Hillblock design features tesselating cork-shaped blocks of highly dense concrete which reduces the impact of wave runup and requires fewer materials. The technology has been used across Holland in coastal defences.

Joan Curtin, Executive Director of Flood and Coastal Risk Management at the Environment Agency, said: “This is exciting engineering first for UK – the new technology installed at Stolford can reduce wave energy by up to 30 per cent compared to the shore protection traditionally used. It will provide valuable protection to this Somerset community and the surrounding agricultural land.”

“It is also a great example of our joint work with the Dutch government, with whom we have a long history of mutual sharing of knowledge and best practice in the management of floods and climate change.”

The defence will provide immediate protection to 20 properties, 70 hectares of agricultural land, and the local access road. Previous high tides in the 80s and 90s caused extensive damage to the coast and to hundreds of hectares of land.

Funding for the £1.5million scheme comes from the Wessex Regional Flood and Coastal Committee via the Local Levy and the new Hinkley Point Power Station currently under construction nearby. The Dutch Government also contributed £10,000 through the Partners for Water scheme which promotes Dutch innovations across the world.

The design also allows for continued public access and preserves habitats in the area. It also removes the need to replace and upkeep components of the armour, which previously cost the Environment Agency £50,000 a year.

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If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

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Critical importance of clearly identifying scope of works

Clancy Docwra Ltd v E.ON Energy Solutions Ltd [2018] EWHC 3124 (TCC)

E.ON was required to install an underground heat network as part of a substantial residential development project in central London. It put out an invitation to tender (ITT), instructing that it required any proposal to address all civil works associated with the installation of network pipes and to identify possible exclusions.

Clancy Docwra (CD) was successful in securing the project and was then engaged to carry out the works. CD confirmed in an email attached to the tender that their offer was made on the basis that a feasibility study had been completed to determine an unrestricted corridor for constructing the heat network; that there was no provision for hand digging save for in areas where it had been expressly confirmed; and that there was no allowance for diversion of mains and services, disposal of contaminated materials and breaking out of obstructions in the trench.

A sub-contract was entered into by the parties and this email did not form part of it, but instead was appended to it along with post-tender review minutes which also referenced the exclusions.

In March 2017 CD encountered adverse ground conditions and a dispute arose between the parties about the extent of CD’s obligations. E.ON argued that CD was bound to carry out the works as defined in the sub-contract which included all civil works required in the installation of pipes and particularly referred to Clause 1.3.5, which provided that the sub-contract documents took precedence in the event that there were inconsistencies. This document clearly allocated the risk in respect of ground conditions to CD.

On the other hand, CD’s position was that the scope of its obligations and the allocation of risk under the sub-contract had been altered by the appended documents, such as the email setting out exclusions and the post-tender review minutes.

In July 2017, CD referred the dispute to adjudication and sought relevant declarations. The adjudicator found in favour of E.ON and refused to make any of the declarations sought. CD then issued proceedings against E.ON, which came before Mrs Justice Jefford DBE in the TCC.

Decision:

Jefford J accepted that the scope of works was broadly defined as all civil works involved in the installation of pipes, as set out in the ITT and the sub-contract. However, she recognised that the ITT also instructed tenderers to identify possible exclusions. By giving tenderers that opportunity, E.ON was clearly aware that any agreement could involve exclusions limiting the scope of the works.

Jefford J found that, on proper construction, the position in the sub-contract was qualified by the exclusions contained within the appended documents.

Case comment:

This case demonstrates the critical importance of clearly identifying the scope of works and reminds contracting parties that pre-contractual documentation is not only relevant when determining respective obligations and the allocation of risk, but may also have the effect of modifying the scope of the works set out in the contract itself.

The decision highlights the risks of appending supplementary pre-contractual documentation to construction contracts, as any exclusions contained within the contract may be operative despite not featuring per se in the contract itself. Parties should therefore consider carefully any statements, conditions or exclusions made during the course of pre-contractual correspondence to determine the true position before signing, and placing potentially mistaken reliance on, the terms enshrined in a contract.

 

Article submitted by Mark James, Partner – Dispute Resolution, Coffin Mew

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