Boosting digitally built Britain

A new taskforce has been established, designed to harness digital expertise to improve the construction industry.

Bringing together experts from industry, academia and government, the taskforce will advise Treasury on how data, AI and machine learning can help us predict and meet the needs of the UK. The work will build on the success of previous construction projects, like the London 2012 Olympics and Crossrail, where digitisation led to greater productivity and efficiency.

The taskforce will be run by the University of Cambridge’s Centre for Digital Built Britain (CDBB).

During the launch, Exchequer Secretary to the Treasury, Robert Jenrick, said: “We are investing record amounts in UK infrastructure to build the roads, railways, schools and hospitals we need.

“There are vast amounts of data and information on the UK’s infrastructure, but only with better coordination can its incredible potential help us meet the country’s needs.

“What we’ve announced today will support this ambition. That way vital projects like transport, housing and broadband will complement each other and help us ensure our infrastructure is fit for the future.”

Professor Andy Neely, Pro-Vice-Chancellor: Enterprise and Business Relations at the University of Cambridge said: “Digital technologies are shaping all industrial sectors and will have a profound impact on construction. The core aim of the Digital Framework Task Group (DFTG) is to ensure that the UK is well positioned to capitalise on the use of data for the public good in the UK’s economic infrastructure and the wider built and natural environments.

“To achieve this the DFTG will collaborate closely with industry, policy makers and academia to develop and encourage adoption of the digital framework for infrastructure data.

“The framework will unlock the potential of digital twins, and the next generation of digital construction and smarter infrastructure advances.”

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Lords call for radical overhaul of sector

A radical overhaul of the construction sector is needed, according to a report published by the House of Lords Science and Technology Committee.

The problems within the industry have been highlighted through the current push to address the housing crisis. The Committee has found that the sector will struggle to produce the housing the UK needs, together with associated infrastructure, without a sea change in attitudes and production methods.

Given that the UK already lags behind other countries in construction productivity, and is facing a labour shortage, the Government and the construction sector must urgently find solutions.

The report: Off-site Manufacture for construction: building for change, calls for more use of off-site manufacture (OSM) methods, which can help increase productivity while reducing labour demands, improving the quality and efficiency of buildings, and reducing the environmental impacts associated with traditional construction.

However, the report found that take up of OSM is varied and somewhat limited across the sector. This is due to out-dated and unsustainable business models that are not conducive to OSM for construction. OSM requires collaboration between clients, designers and contractors from an early stage but much of the evidence the Committee received painted a picture of a construction sector that is fragmented and lacking in trust. These barriers must be addressed by the sector itself and strong leadership is needed from the Construction Leadership Council.

While OSM could lessen the labour shortage, the different skills required for manufacturing are currently lacking in the UK labour market and must be developed. OSM will require a combination of skills involving site implementation, digital and procurement. The Government must therefore ensure that young people entering the workplace are equipped with the digital skills needed for modern methods of construction, including off-site manufacture.

The Committee has welcomed the Government’s Construction Sector Deal, with its ‘presumption of favour’ of OSM methods, and commitment to investing in this. Recommendations from the Committee include the publication of Key Performance Indicators against which the success of the ‘presumption in favour’ can be assessed. Where the presumption in favour is set aside and a project goes ahead that does not use off-site manufacture, the Government should publish a statement explaining why it has not been used and justifying that decision.

In many cases, OSM is suitable for the construction of important social infrastructure such as hospitals and houses. The Committee heard evidence that if the Government is to achieve its aim of building 300,000 houses a year by 2020, OSM would be the only way to meet this target, and that traditional construction methods do not have the capacity to build enough homes. The Government must set out what conditions it will attach to the extra financial support for housing to drive the uptake of off-site manufacture and other innovative technologies.

Chairman of the Committee, Lord Patel said: “There are clear and tangible benefits from off-site manufacture for construction which make a compelling case for its widespread use. We heard evidence that OSM could increase productivity in the sector by up to 70%.

“The construction sector’s business models are no longer appropriate and are not supporting the UK’s urgent need for new homes and infrastructure. The construction sector needs to build more trust and create partnerships so that companies can work together to improve the uptake of off-site manufacture, and the Construction Leadership Council should provide the necessary leadership.

“The role of the Government and the wider public sector is pivotal in a move to greater use of off-site manufacture. The report sets out actions that the Committee thinks the Government should take including implementation of the Construction Sector Deal, committed execution of the ‘presumption in favour’ of off-site manufacture and a greater move to procuring for whole-life value rather than lowest cost.”

The report is available here.

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Dangerous site conditions lead to prosecution

The Health and Safety Executive (HSE) has successfully prosecuted a contractor, client and director after conditions at a building site were found to be dangerous.

Southwark Crown Court heard that HSE inspectors had visited the construction site on Gladesmore Road, London on numerous occasions in 2015 while building work was taking place at the property.

Poor health and safety conditions were found on site including dangerous work at height, unshored excavations, and poor welfare facilities. Numerous prohibition notices, improvement notices and notifications of contravention were served on the contractor and client throughout the period.

A subsequent HSE investigation found that the contractor, Mr Bodnariu, failed to plan, manage and monitor the work on site. The client company WEL Estates Limited failed to make suitable arrangements for managing a project, and the director of WEL Estates Limited, Mr Yoel Lew, had allowed the poor conditions on site.

Mr Bodnariu pleaded guilty to breaching regulation 15(2) of the Construction (Design and Management) Regulations 2015, and was sentenced to eight months imprisonment, suspended for 12 months, 250 hours of community service, and ordered to pay costs of £1,000.

WEL Estates Limited was found guilty of breaching Regulations 4(1) of the Construction (Design and Management) Regulations 2015, and was fined £20,000 and ordered to pay costs of £5,000.

Mr Yoel Lew was found guilty of breaching Section 37(1) of the Health & Safety at Work etc. Act 1974 and sentenced to 200 hours of Community Service.

Speaking after the hearing HSE inspector Sarah Robinson said: “Dutyholders should be aware that HSE will not hesitate to take appropriate enforcement action against those that fall below the required standards.”

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Heathrow cleared for take-off

With Heathrow cleared for take-off, following overwhelming support from Parliament, the airport has confirmed that over 100 businesses have expressed interest in becoming an innovation partner.

In April, Heathrow launched the search for partner organisations to make the development – one of Europe’s largest privately funded infrastructure projects, more efficient, sustainable and affordable. Now, as the airport enters the delivery phase of the project several companies have expressed interest in sharing ideas around sustainability, service innovation, building design, cost efficiencies and commercial concepts.

Emma Gilthorpe, Executive Director of Heathrow Expansion said: “Following an overwhelming majority of cross party MPs showing their support for Heathrow expansion, the team is focused on delivering our commitments and ensuring the project is implemented in the most responsible way. This includes making sure we have the best technology and delivery methods available to us when building the new runway and associated infrastructure. The response to our call for expressions of interest has been extremely positive and I am really excited to move to the next stage, where we will compile a long list form all the great ideas put forward.”

The list of those being taken forward will be announced in late August and, from there, remaining potential innovation partners will be invited to submit a business case and implementation plan demonstrating the feasibility of their idea.

Gilthorpe concluded: “Now we have had the stamp of approval from Government for our North-West runway scheme we can press ahead with finalising the scheme. We have been refining our plans as a result of a wide range of stakeholder feedback and we will launch the final public consultation on a preferred masterplan in early 2019 ahead of preparing our development consent order submission in 2020. We have been exhaustive in our exploration of options and mitigations throughout this process and it is only right that we put our thinking to the test one final time. By asking the best in Britain to challenge our thinking, we will ensure no stone is left unturned in the delivery of excellence for our customers and communities.”

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SMEs: building the future

Small and medium-sized enterprises (SMEs) are a vital ingredient to help drive better performance from our construction industry, providing specialist capabilities, innovative thinking, agile ways of working and often independent views and approaches. As such, SMEs have an important role to play as ‘agents for change’ or, in more current parlance, as disruptors, we speak to Paul Dyson, Partner at HKA, one of the world’s leading providers of advisory, consulting and expert services.

We are all acutely aware of the ever-quickening pace of the globally focused aggregation of the construction supply chain, both horizontally and vertically, in response to the increasing complexity and size of (especially) economic infrastructure. Whilst clients, sensibly, look to larger organisations and their Joint Ventures (JVs) to deliver their projects, we believe that SMEs play a key part in providing a broader choice for clients and thus are an important part of the construction supply chain ecosystem.

The importance of the small independent companies to the UK economy cannot be overstated; SMEs account for more than 99% of all UK business and employ over 12 million people. They are a vital and energetic part of our growing UK economy.

It is interesting to observe that Germany has been highly successful in driving the expansion of its economy through the growth in its smaller businesses or ‘Mittelstand’. The UK government is cognisant of this success and is increasingly looking at ways to ensure that public money finds its way in part to SMEs. A good example of this is the current Crown Commercial Service’s (CCS) RM3745 Management Consultancy Framework Agreement that is looking to achieve 35% total spend through SMEs by 2020.

The difficulty faced by all SMEs is their respective ‘routes to market’ – how do they compete, and how do clients gain access to their skills and experience? Cognisant of this and in support of the UK government’s SME objectives, HKA has been successful in forming a strong alliance of specialist SMEs to respond to CCS’s framework needs. To support the successful delivery of our partnership, we have established an open, transparent and collaborative teaming agreement giving equal opportunity to all partners to participate. Our view (and that of our partners) is that through such agreements we are able to offer very broad and deep capability in order to compete with much larger organisations. We are also able to offer true independence free from any conflicts of interest.

We believe that, in the wake of Carillion’s demise, there is a growing desire for clients to engage, where appropriate, with smaller consultancies that at the same time have access to a broad and deep set of skills that can be efficiently and effectively mobilised, something that larger organisations sometimes struggle to achieve. This is particularly true for the smaller but no less complex commissions. We carefully analyse each commission’s needs and draw together the appropriate capabilities from our own and our partner’s teams. Having a talented network ensures we are able to provide the right team at the right time.

From our experience of working closely with SMEs, it is evident that there is an openness to collaborating and sharing, an ability to be more agile and responsive, provide deeper specialist knowledge and also to be more innovative. Our industry is in need of both incremental and transformational innovation, and we believe this is best delivered by assembling the best teams from different business cultures and experiences to positively impact outcomes.

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South East Construction Expo 2018 comes to Sussex

Construction Expo South East 2018 will be held in Sussex for the first time on September 13 at the South of England Event Centre in Ardingly.

The trade show, founded ten years ago and previously held in Kent, will showcase the region’s largest range of construction products and services and is a ‘must visit’ for anyone whose business deals in development, property and construction.

Carole Black from South East Construction Expo said: “Sussex really is leading the way with its exciting construction projects in Brighton & Hove and across East and West Sussex, so it is great to be able to hold the South East Construction Expo 2018 here.

“The UK’s construction output stands at more than £110 billion per annum, accounts for ten per cent of employment and will continue to be a key driver in our prosperity over the coming years. We are committed to continuing to support this fast-moving industry with a leading conference and exhibition enabling sponsors, exhibitors and delegates to build lasting business relationships.”

New for 2018 will be the ‘Construction Village’, which will accommodate exhibits of any size both inside and out – offering the ultimate in flexibility for exhibitors and demonstrators. It will take this event to a totally new dimension and make it one of the most exciting construction events in the UK.

The event offers free Meet the Buyer appointments with the top construction companies in the country, great exhibitor packages, brilliant networking opportunities, high quality CPD approved workshops, plus the latest news on projects and developments across the UK.

An exciting list of speakers and panel discussions will cover every aspect of what is important to the industry right now, with Wayne Hemingway MBE from the Design Council, Kevin Byrne founder of Checkatrade and Anne Timpany from On Tap Plumbers speaking at the BIG networking breakfast and the entertaining Gyles Brandreth hosting the BIG construction dinner. Many more speakers and attractions are yet to be announced.

Delegates can sign up for free entry and Meet the Buyer appointments at constructionexpouk.co.uk and there are still sponsorship and exhibitor opportunities available. Twitter @ConstructExpo

South East Construction Expo 2018 will take place at the South of England Event Centre in Ardingly, Haywards Heath on Thursday 13 September (8.30 am – 4.30 pm).

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Scottish construction collateral warranties: timeless, or on borrowed time?

Third party rights in Scotland have potential, but will collateral warranties ever really be on borrowed time? In this article, Kate Faith Senior Solicitor, Construction at Burness Paull LLP investigates.

Kate Faith, Burness Paull LLP

Procuring warranties can be very time-consuming and expensive, so there was much interest when the Contracts (Third Party Rights) (Scotland) Act 2017 (the “Act”) came in to force a few weeks ago.

The Act consolidates a previously ambiguous area of Scots law, and makes it easier for parties to transfer rights to third parties without the need for a separate contract, such as a collateral warranty.

Third party rights can now be granted by reliance on a schedule setting out largely the same information as you would find in a collateral warranty such as an express duty of care and the grant of a copyright licence. Employers/developers can now enjoy the efficiencies and cost savings that come with just one schedule to negotiate. Potentially, this is a big time saver.

In practice though, has the Act really provided the change that so many of us were hoping for?

Here are three reasons collateral warranties may stand the test of time:

1. Step-in Provisions

Funders commonly seek the right to step in to construction contracts as a means of protecting their investment. Along with rights, step-in provisions create obligations for the funder (eg. payment obligations), and obligations cannot be transferred to a third party via a third party rights schedule. We expect that funders may therefore continue to prefer collateral warranties.

2. Loss of Rights to Adjudicate

There are limited scenarios (not discussed here) in which collateral warranties could grant a third party beneficiary the right to adjudicate. This is a divisive point of law. The decision in Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd [2013] EWHC 2665 (TCC) overturned the presumption that a collateral warranty was not a “construction contract” for the purposes of the Housing, Grants and Regeneration Act 1996. As the statutory right to adjudicate flows from having a construction contract, it follows that a collateral warranty could offer third party beneficiaries the benefits of adjudication.

Conversely, it’s doubtful that a beneficiary could raise an adjudication using third party rights granted under the main contract. Statutory rights to adjudicate are granted to the parties to a construction contract. A third party is defined in the Act as “a person who is not a party to the contract”. This has not been tested in the Scottish courts, however.

In reality, the range of circumstances whereby a third party beneficiary could have adjudication rights via its collateral warranty is narrow. Nevertheless, we anticipate that there will be some resistance to third party rights arising from this issue.

3. Market Expectation

Third party rights are not a new concept in Scottish construction contracts. The Scottish Building Contract Committee (SBCC) suite already contains schedules of third party rights. Yet these are rarely used, perhaps because some parties prefer the security of having a physical collateral warranty.

So far we’ve seen little uptake of third party rights – but it is early days. It’s understandable that third party beneficiaries may favour the tried and tested route, but in time the efficiencies and cost-benefits of third party rights may be sufficient to overcome long-established practices.

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