LSBU Donates £150k for New Apprenticeships

The London South Bank University (LSBU) is to donate £150k to ‘Reskilling the Recovery’ which is creating new apprenticeships for low-paid Londoners.

LSBU’s donation from unspent apprenticeship levy funds is to be used to cover tuition fees of apprentices in small businesses which have been hit hardest during the pandemic. The funding will help support the local economy in London and promote including within SMEs by supporting BAME and female apprentices into better paid, more productive jobs.

‘Reskilling the Recovery’ is being run by London Progression Collaboration (LPC) and over £4 million has been pledged by large employers from unspent levy funds paid by employers towards the cost of supporting degree apprenticeships, with the LPC estimating that around £470 million of the 2018/19 apprenticeship levy fund went unused by employers.

Sammy Shummo, LSBU Group Director of Apprenticeships, said: “LSBU is proud to be able to donate towards the London Progression Collaboration’s Reskilling the Recovery campaign. Our £150k donation will create new apprenticeships and support London’s small businesses who have been particularly hard hit by the pandemic.

“Now more than ever, we need to band together to support London’s economic recovery from damage inflicted by COVID-19. As we adapt, recover and rebuild, we must ensure that London’s economy works for all Londoners. More than ever we believe apprenticeships can support people into rewarding employment and help make businesses more resilient.”

Oscar Watkins, who leads LPC’s work with the built environment sector, said: “We’re delighted to be working with LSBU. The university has a powerful history of supporting Londoners to achieve their potential through applied education. These values also underpin everything we are striving to achieve through our Reskilling the Recovery Campaign. We hope that many more universities will follow LSBU’s good example, by pledging their unspent apprenticeship levy.”

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How Digital Tools can Help Construction Firms

Adam Prince is Vice President of Product Management for Compliance, Brexit, Identity and Consent, Sage in this latest feature he writes about the benefits of using digital tools can help the construction industry.

There is no denying that small construction and trade businesses have been amongst the hardest hit by the pandemic. Investment for building projects came to a halt following the first lockdown; non-residential construction was hit in part due to a slowdown in renovations of office buildings – this trend continued as more companies shifted to remote work. Business was further complicated by social distancing rules, which created their own set of logistical challenges for construction work.

The impact of COVID-19 on construction has been deep. According to CHAS, four out of five businesses (81%) said they had to cancel or postpone construction projects following the initial impact of COVID-19. Furthermore, businesses are still very much enduring the negative effects on trade; recent ONS figures show that construction output in January 2021 was 2.6% below the February 2020 level; the level of new work was 6.4% below this level.

However, amidst industry doom and gloom, recovery is for construction firms is set to be ‘V’-shaped. Following an immense downturn in businesses, many decision makers are expressing a positive outlook about the future. To prepare for this, having the right accounting tools will be key over the coming months.

Previously regarded as a tick-box exercise, accounting-related digitalisation can now help firms streamline operational procedures and ensure financial compliance in a changing legislative landscape. Here’s three ways for construction firms to improve their accounting software toolkit to aid greater productivity.

1. Audit your current office systems

Create an inventory of what you are currently using. This will help you identify areas for improvement and what can be done to improve long-term strategy. Accounting software will not only facilitate short-term cash flow management, it will also provide strategic overview of money moving in and out of your business over the coming year.

This is critical, given that many firms face an additional £173,000 debt due to COVID-19, according to our research. Understanding your real time cash position will help you manage any hurdles more effectively.

Your construction business relies on cash flow – you need to ensure you have more money flowing in than you have flowing out of your business to survive. Sounds obvious I know but it’s something not all businesses do.  Auditing your current systems and finding areas for improvement with new, useful types of software can help protect your cash in the long-run and potentially soften the impact of business disruption. For example, reviewing the financial planning tools you use will allow you to see if you are leveraging them to their full capabilities and whether they are cost efficient or not.

Forecasting and invoicing tools can prove to be the most valuable. The right forecasting plan can help save significant amounts of time by removing the need for manual data entry while providing pre-built queries. You can skip the time-consuming edits and easily create new forecasts in real-time that reflect what is going on in your business. In addition, timely invoicing provides streamlined payment for goods and services and can reduce the likelihood of cash flow voids.

2. Learn about how HMRC legislation affects you

Keeping ahead of the regular government changes, such as VAT reverse charge changes for the construction industry, IR35, VAT cuts for businesses and the availability of grants, is critical.

IR35, as tax anti-avoidance legislation, is something construction firms with off-payroll workers should take notice of. Sub-contractors who operate as an incorporated business will likely be impacted by IR35. This legislation takes precedence over the Construction Industry Scheme (CIS) requirements, although both seek to withhold tax and National Insurance at source. The legislation is designed to define contractor status and with the new IR35 requirements, contracting firms will need to ensure that adding ‘disguised’ workers to payroll is completed smoothly and in line with government rules.

In addition, domestic VAT reverse charges came into effect on 1 March 2021, which means those supplying construction services to a VAT-registered customer no longer have to account for the VAT. As a result invoicing processes would have changed for many firms. Using software that ensures compliance to such regulations and staying on top of legislative updates is essential, especially in the changing climate.

Checking the HMRC website will be key in the coming months – it details financial support available in the form of loans and grants, as well as legislative changes building and construction businesses need to be aware of. The HMRC website also has information of future changes such as Making Tax Digital for Income Tax Self Employment (MTD for ITSA) and other big impact challenges for dated back-office systems.

3. Explore the digital marketplace

Following a comprehensive audit and review of legislative changes, you can start to explore the means to effectively digitise your business. When moving from auditing current assets to implementing new ones, think about time inefficiencies – “am I losing productivity to back-office processes?”. This is where solutions like cloud accounting software for construction can help you. It keeps on top of customer invoices, allows you to engage in real-time reporting and track all of your payments, which are all key for staying ahead of tax reviews. You can automate mundane, manual data entry, reconcile bank transactions, and give bookkeepers and accountants a single place to access real-time transactional data.

There is a spectrum of tools on the market to help construction firms specifically. Our research highlighted that 80% of SMEs think digital adoption will be critical for an enterprise-led recovery and job creation; having the right digital strategy will help fuel and protect business in the long-term.

When looking at your digital toolkit, there are some applications specifically geared towards accounting that can streamline processes. For instance, smart schedulers with real-time tracking through GPS and quick quoting can speed up procurement. There are also solutions that allow businesses to create, send and track detailed and professional proposals that are automatically converted to invoices. Other solutions help automate key processes, saving valuable time. In addition, solutions for invoicing can let you manage, create, and send out bespoke and branded quotes to your customers with a few clicks of a button.

Following an assessment of the unique challenges your business faces, you can select the right digital solutions for you, in order to deliver a better service for customers and ensure back-office systems run as smoothly as possible. Ensuring compliance in 2021 will safeguard construction firms against investigatory visits from HMRC, who will be keen to check that accounting and payroll is being done by the book.

What’s on the horizon for construction?

Knowing what support is available for your business from the Government and which digital tools can help boost efficiency will be key for construction firms. Reinvesting the Government’s financial support in technology adoption will be a great boost for long-term resilience and health of any firm.

The future for the construction industry is unknown but taking the necessary steps to safeguard your business and your finances will be key to survive and thrive. Having the right finance and technology tools will be crucial for construction firms to prepare to bounce back and build a better future.

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Pledge to Get Rural Scotland Connected

The UK Government has expanded it plans to deliver next-generation broadband to hundreds of NHS surgeries, schools and other public sites in the hardest-to-reach parts of Scotland.

The new funding has come as the Government announced Project Gigabit, an ambitious £5 billion project to roll out top-of-the-range gigabit connections to every corner of the UK, the first pound of which will be spent in Scotland.

Ninety-one GP surgeries and community hospitals in the most rural areas of Scotland, including island services on Arran, Jura, Lewis, Mull, Shetland and Orkney, are set to join the digital fast lane with gigabit broadband updates. The Government has also pledged £2 million to extend investment to an extra 41 NHS Scotland sites, under plans to create an infrastructure revolution for isolated areas of the country.

Another £1 million has been pledged to extend full fibre to even more schools, hospitals and doctors’ surgeries throughout the Highlands. This means that 199 public buildings will be able to enjoy faster internet speeds thanks to £7.3 million in total investment through the Government’s Local Full Fibre Networks scheme. Up to 37 sites are expected to receive connections and all are due to be completed by March 2022.

In the Northern Isles of Yell and Unst in Shetland, work as part of a £2 million project to connect 21 schools, council buildings and other public sites to fibre broadband has been completed, helping the Government get one step closer to levelling up the most isolated Scottish communities.

Matt Warman, Digital Infrastructure Minister, said: “We know that improving connectivity is a top priority for people in Scotland, and this broadband boost will enable dozens more doctors’ surgeries, schools and other valued public buildings to raise productivity and deliver better quality services.

“This is on top of the £5 billion Project Gigabit we’re launching today, the first pound from which will be spent in Scotland, that is setting out to deliver next generation speeds to every corner of the UK.”

The Government has already invested more than £15 million to help provide gigabit-capable connections with local authorities and other public service bodies in Scotland, but the launch of Project Gigabit marks the beginning of even more investment.

Last month the Government announced the first tranche of funding from Project Gigabit will be spent in central Scotland: £4.5 million to upgrade 5,300 homes and businesses that were due to get superfast through the Scottish Government’s ‘Reaching 100%’ (R100) programme but will now get even faster gigabit connections.

Both the UK and Scottish Governments are working closely together to scope how Project Gigabit will work in the rest of Scotland, including an assessment of its distinct characteristics and the challenges this could pose to delivery, and consideration for how it will align with the R100 programme.

Projects will be developed jointly by the UK Government and Scottish Government through a collaborative approach, in which the Scottish Government is expected to be the lead partner on implementation management on behalf of DCMS.

UK Government Minister for Scotland Iain Stewart said: “The UK Government is investing millions of pounds to ensure people in remote areas of Scotland benefit from fast, reliable internet connections. Upgrading broadband in NHS surgeries, hospitals, schools and councils across rural Scotland will transform public services at the very heart of our communities, helping us to build back better from coronavirus.”

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Building a Better Future Through Digital Investment

Mike Smith is Managing Director (Direct), Virgin Media Business, in this latest feature he writes about how a better future can be built by the construction industry by investing in digital.

“The property industry is generally slower to take up technology and a bit more reserved in taking risks”. But as Mark Nallen, Director of Technology and Innovation at Canary Wharf Group, told us, “the pandemic allowed us as a company to embrace changes”.

These changes have been far-reaching and have come as a response to social distancing and health and safety precautions. Construction leaders have invested in digital technology to keep teams on site and homeworkers collaborating, moving projects forward.

Our research with the Centre for Economics and Business Research (Cebr), which unearthed a £232bn opportunity for the UK economy, shows us that progress has been made in the construction sector. If this continues and accelerates, the industry could see a £3bn boost over the next twenty years.

But our study also highlighted a paradox. The industry’s freedom to continue with projects during the second and third national lockdowns may have actually limited its ability to digitally transform in comparison with sectors like retail and professional services. And this could mean that it lags behind other private industries hit hard by lockdowns and forced to pivot towards a digital-first operating model.

So, what does the road ahead look like for the construction sector? How can the industry make up lost ground when it comes to digital transformation? And with vaccines bringing light at the end of the tunnel, how can construction leaders switch their thinking from survival mode towards the rebound?

A glimpse of future working

Construction hasn’t been as badly affected by the lockdown as travel, retail and hospitality, but leaders have still faced challenges.

These have included supply chain delays, the temporary suspension of on-site work when the first lockdown hit, and the need to set up employees for working from home in just a matter of days when the crisis hit.

Leaders responded by investing in the cloud to enhance efficiencies and support remote online working for employees. This enabled on-site project managers and colleagues who would usually be based in the office to collaborate in real-time.

And this mass homeworking revolution has been largely successful. 46% of British businesses have seen a boost to productivity due to remote and flexible working during the Covid-19 lockdowns of 2020, according to Capgemini. Within these organisations, employee productivity grew by 10% on average.

And 66% of construction firms want to retain remote working options beyond the end of the pandemic, while a further 63% intend to keep flexible working, according to Sir Robert McAlpine.

Flexible working is here to stay and will be a key transformational trend over the coming decades, positively influencing 46% of all jobs by 2040 according to our research with Cebr. But this is going to take a different form from the universal homeworking many of us have grown used to over the last year.

Mass immunisation will mean that many workers, from engineers and architects to project management staff, will be able to return to the workplace, while other employees continue on site.

Employees will need to be able to collaborate seamlessly and securely across multiple locations be that at home, on the go, in the office or from new site offices as they are established. And this will elevate the importance of digital investment – especially advanced connectivity solutions designed to securely handle traffic from many different places.

SD-WAN is one such technology that can provide organisations with greater flexibility, agility and resilience. This will provide network managers with more visibility and control over bandwidth, with the ability to flex up and down according to business needs as workers move from construction sites to corporate offices to their desks at home.

Unlocking new opportunities

Widespread cloud adoption and recognition of technology’s importance in driving the Covid response has fuelled growing interest in emerging technologies.

This is promising because our study with the Cebr found that the digital delivery of services, and data and analytics are two key trends that will unlock the £232bn opportunity for the UK economy. What will this look like in the construction sector?

Building Information Management (BIM) technology can drive design and scheduling efficiencies, keep site managers updated on project progress, cost overruns, and track energy usages and wider facilities management issues before problems arise. Similarly, digital supply chain monitoring can use machine learning to help identify and prevent shortages in materials. This is likely to become more widely used in the years ahead.

The use of these technologies and advanced analytics could lead to improvements in project margins of 3-5%, according to McKinsey.

And the use of robotics will become more common across the industry. Already, an increasing number of companies are developing intelligent, multi-purpose, and autonomous robots for use in construction sites, according to Deloitte.

These robots can take on a variety of roles, from units that tackle wall rendering, to drones that can collect high-resolution data to improve land surveying services. But across applications, they speed up planning and project management, and free up human beings from monotonous, repetitive tasks to focus on tasks that really add value.

All these innovations will be underpinned by ultrafast connectivity, heightening its importance over the coming decades. Ultimately, if construction leaders chose to invest in next-generation digital infrastructure and tools to use this, they will be able to unlock limitless possibilities.

Building future prosperity

Construction leaders have a once-in-a-generation moment to take bold digital investment decisions, driving more modern ways of working that will boost efficiency and productivity, and embracing innovation.

There are short and long-term implications to making digital investment a priority. In the coming months, construction businesses which invest will make the transition to hybrid working more smoothly. Over the next two decades, organisations taking bold decisions will be the ones benefitting from emerging technologies, making up lost ground and even overtaking other industries.

The construction sector is vital to our economic success, employing nearly 10% of the workforce and contributing 7% of UK GDP. So, we will all see benefits from leaders making bold digital investment decisions and grasping this exciting opportunity to define a new everyday for their employees and customers.

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Homes England Launches Strategic Partnership Bidding

Homes England, the UK Government’s housing agency, has opened a competitive bid round for its latest intake of strategic partnership, it is seeking strategic partners with the ambition and capacity to deliver affordable housing at scale; organisations interested in applying have until 12 noon on 18^th May 2021 to submit their proposal online.

The strategic partnerships are one of two routes to access grant funding from Homes England via the Government’s Affordable Homes Programme (2021-2026). Rather than accessing funding on a scheme-by-scheme basis via Continuous Market Engagement, the strategic partners will enter a multi-year agreement with Homes England to deliver affordable housing. While strategic partnerships have historically only been available to not-for-profit providers, this time Homes England is welcoming proposals from for-profit affordable housing providers and developers, and local authorities.

Strategic partnerships play a pivotal role in Homes England’s mission to use everything at its disposal to intervene in the market to make homes happen. Partners can benefit from the certainty of affordable homes grant funding for the duration of the deal, with greater flexibility to deliver and bespoke access to the agency’s land and investment capabilities.

In return, the strategic partners will need to demonstrate how they are going to support Homes England’s strategi objectives within their development programme, including the adoption of modern methods of construction (MMC), a dedication to high-quality sustainable design and a commitment to working closely with SMEs.

Gordon More, Interim Chief Executive Homes England, said: “Our strategic partnership model is about working with ambitious organisations to maximise successful delivery through Government funding and use of our wider resources so we can increase innovation, diversify the sector and increase the supply of much needed affordable homes.

“Building on the successes of our existing strategic partnerships, we’re welcoming bids from a broader set of partners that are as committed as we are to design quality and modernisation.”

For more information about strategic partnerships and the Affordable Homes Programme (2021-2026), please visit Homes England set to launch bidding for strategic partnerships – GOV.UK (www.gov.uk).

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Shortlisted Bidders for Contract Announced

Highways England has announced the three companies it has shortlisted for its largest single contract, the £2.3 billion package to build the longest road tunnel in the UK. The road tunnel will sit at the heart of the proposed Lower Thames Crossing, the most ambitious roads project in a generation.

The three construction and engineering companies below have been invited to enter into a competitive dialogue with Highways England, which is the next stage of the contract tender process:

• BFV JV: comprises BAM Nuttall Ltd, Ferrovial Construction (UK) Ltd, and VINCI Construction Grands Projects, supported by Atkins Ltd, Tecnica y Proyectos SA (TYPSA) and Stantec UK Ltd.
• Bouygues Murphy Joint Venture (BMJV): comprises Bouygues Travaux Publics S.A.S and J Murphy & Sons Ltd, supported by Mott MacDonald Ltd and Ove Arup and Partners Ltd.
• Dragados-Hochtief Joint Venture (DH JV): comprises Dragados S.A and HOCHTIEF Infrastructure Gmbh.

For over 65 years, the Dartford Crossing has been the only crossing between Kent and Essex, which is a critical link carrying vital food, goods and services between the manufacturing centres, ports and distribution hubs of the South East, Midlands and North of England. The road is designed to hold 135,000 vehicles a day, but it now often sees 180,000 using it on a daily basis. This has led to long delays, which businesses throughout the UK have said act as a barrier to trade and jobs alike.

The Lower Thames Crossing is set to improve journeys by almost doubling the road capacity across the River Thames, East of London with 14.3 miles of new road, including two 2.6 mile-long tunnels underneath the river.

The Tunnels and Approaches contract includes design and construction of twin road tunnels under the River Thames. At 16 metres wide, these tunnels will be some of the largest bored tunnels in the world.  They will also be the longest road tunnels in the UK. The scope also includes the portal buildings, approach roads and the tunnel systems.

Matt Palmer, Lower Thames Crossing Executive Director, said: “Our roads connect us – we rely on them, and they are a critical part of our economic recovery and low-carbon future. The Lower Thames Crossing is the most ambitious road project this country has seen since the M25 was completed 35 years ago.

“This contract shows our commitment to this project, which will support 22,000 jobs during its construction and provide a huge economic boost to the UK economy when it opens for traffic.

“This contract is unparalleled in its ambition, and we need the right partner to match that ambition. We look forward to entering into competitive dialogue with the three shortlisted companies and hope the final bids match our aspirations.”

The successful bidders, along with their supply chain, will help Highways England achieve their ambition of making the Crossing the most environmentally sustainable road project which has ever been delivered in the UK. They will also support delivery of landscaping which will look to increase the biodiversity value of the area by 15% of planting over 260 hectares of new woodland, converting 400 hectares of arable land into semi-natural habitats, and creating new ponds, waterways, ditches and hedgerows.

They will also be responsible for seven new green bridges that will connect habits and species either side of the new road.

The scheme will help to unlock a wealth of economic benefits by supporting over 22,000 jobs during construction and creating better connections to the region’s ports, distribution hubs, manufacturing centres and give improved connectivity to the North of England.

Highways England is building on its track record of successfully delivering major projects by bringing in partners and expertise from across the infrastructure industry. This contract is one of three main works contracts that will make up the scheme, with a £1.9 billion roads contract currently out for tender and the £162.5 million Integration Partner contract awarded to Jacobs earlier in the year.

Highways England plans to resubmit its application for a Development Consent Order later this year. An application was originally submitted to the Planning Inspectorate in October 2020 but was withdrawn in order to provide more information.

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Could R&D Hold the Key for Survival

From tax policy changes to Brexit and the fallout from COVID, businesses across the country have been hit by huge and numerous challenges in the last year.  But there’s more to come yet; the introduction of IR35 and reverse VAT charge will do nothing to ease the financial burden placed on those operating in the construction and engineering sector. At a time when recovery and futureproofing is front-of-mind for so many, Gareth Randle, engineering sector specialist at R&D tax relief consultancy ForrestBrown, discusses why embracing technological change – and in turn tapping into R&D tax relief – could soon be necessary for survival.

The past twelve months have been relentless in their ability to present new and unexpected challenges to each and all of us. And for businesses operating within the construction sector, it’s been a particularly tough time.

The sector has – and continues to – face huge challenges in the wake of the COVID pandemic, with closed or paused sites, social distancing, and reduced investment all contributing towards a rather bleak outlook. In fact, while the sector fared slightly better than hospitality or retail, one report estimated that the UK construction industry was losing over £300m worth of business a day when the pandemic first peaked in April 2020.

Of course, the challenges posed by the outbreak have since been compounded by Brexit, which caused mass disruption to supply chains and recruiting labour. And now businesses are facing a further hurdle with the introduction of not one but two controversial government tax policies which could really hamper the sector – IR35 and the reverse VAT charge.

As pressures continue to increase and margins continue to be squeezed for construction businesses, conversations about aiding recovery and setting out a plan for the future couldn’t be more critical. It is therefore high time for decision makers to reconsider their attitudes towards investment, innovation and digital transformation if they’re to survive.

It’s time for change

While we’re by no means clear of COVID-19, we’re already noticing trends in how businesses are successfully responding to, and recovering from, the challenges the pandemic has posed. And one thing seems to be certain, technology holds the key.

As one of the largest sectors in the UK, but with a traditional reliance on human labour to keep projects moving forwards and a concern over risks, the construction sector has naturally been slower to adopt digital transformation.

That being said, COVID-19 has now forced the issue, and kick-started the process of digital transformation for everyone to a degree. As a result, a number of businesses are now seeing the benefit of embracing technological change – whether that be in driving efficiencies, cutting costs or redeploying resources – both for now and in the future.

In a post-COVID world, the expectations we place upon businesses – such as health and safety or environmental measures – will only increase while income streams remain level, and construction firms will be left with a limited number of options if they’re to continue operating profitably. They will simply have to start innovating, and digitalisation presents a real opportunity for them to do so.

However, the initial process of digitisation to enable digitalisation represents a significant investment in terms of time and money, and businesses will have to weigh up the uncertainties presented by COVID, Brexit and tax changes within the sector, against the benefits of adopting digital transformation and the potential ramifications for the business if they fail to do so.

It’s not an easy decision to make, but this investment really could be the divide between those that recover quickly and those who continue to struggle in the years to come. After all, there were many businesses which were already embracing the opportunities that digital technologies present to the sector before the pandemic, and others have heavily invested since to try and catch up.

Quite simply, now is the time to act – and if you aren’t prepared to meet the demands of the future sector, you face a very real risk that your business just might not survive.

How R&D can help

While the decision to embrace technological change is a critical one for construction businesses, it needn’t be a hard one.

The Government’s Research and Development (R&D) tax relief incentive, which was first introduced over two decades ago, recognises investment in innovation and could feasibly help construction businesses to not only fund digitalisation projects, but ease the financial burden they’ll soon be facing in the form of IR35 and the reverse VAT charge.

Better yet, as COVID has forced every business to adapt in some way during the last twelve months, there’s a real opportunity for businesses to revisit the incentive if they didn’t qualify previously, or reap the rewards from reactive measures that qualify for tax relief.

While awareness of R&D tax relief in the construction sector has been growing year-on-year, many businesses still aren’t using the relief to their best advantage. For example, an investment in digitisation should be made in the knowledge that the scope for R&D tax relief becomes far broader once that digital transformation and competence is achieved. In this way, R&D tax relief can be used in a more strategic, forward-looking manner, funding the innovation that businesses need to undertake to aid their recovery.

And if you take a look at the impact of IR35, which is likely to discourage contract labour, as it will become more expensive, R&D can indirectly provide the answer here too. Although the government has suggested that businesses could simply employ these workers, the contract workforce has historically enabled businesses to dial up and down their labour capabilities to meet project demand – and the ability to do so will be essential for construction firms as margins continue to tighten.

While a traditional construction workforce tends to be intensive on-site, the innovative introduction of modern methods of construction (MMC) reduces the need for this, as more time is spent in the highly-skilled design development and fabrication phases. And herein lies a tangible, and eligible, R&D opportunity.

It’s important to remember that not everyone has been reticent to change, and over time we’ve started to see distinct types of business operate within the sector.   Firstly, crisis-resilient digitised consulting firms and large contractors that are already claiming R&D tax relief, and are planning to use it strategically to ease the cash flow burden; and secondly the more traditional contractors who are typically more risk averse – and who need to re-evaluate innovation and R&D the most.

There is also notable progress in public works projects, where digital transformation, and MMC, are actively being mandated in December 2020’s Construction Playbook, which addition champions the UK Building Information Management (BIM) Framework.  Larger private projects are regularly BIM-mandated during inception, and that can be expected to become the norm as clients and regulatory bodies become aware of the enormous benefits, which will soon force businesses to take the first step or risk falling even further behind.

Given everything that businesses are facing right now, it’s all too easy for decision makers to let the opportunity of R&D tax relief pass them by. But, just like digital transformation, you should view R&D tax relief as an investment into the future funding of the business – and if you aren’t incorporating this into your business strategy, you can bet that many of your competitors are.

Fit for the future

The UK construction sector is facing immense, and unprecedented, pressures right now – and the introduction of IR35 and the reverse VAT charge has come at the worst possible time for businesses at the start of recovery from the pandemic.

However, in the wake of the perfect storm created by COVID-19, Brexit, and the resulting economic downturn, construction firms have a real opportunity to plot their path for the future – and R&D tax relief could offer generous funding should they decide to embrace the opportunities triggered by technological change and an investment into innovation.

In the not too distant future, the sector truly could be two-tiered – made up of those with the technological capability to deal with the digital project demands of the future, such as BIM and MMC, and those that are strictly low-tech artisanal builders. As a result, construction businesses will need to decide which side of the sector they’d prefer to sit.

Regardless of their decision, one thing is clear. If businesses are to survive any potential challenges ahead, they must be adaptable, and they must be strategic.

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