Almost two thirds (65%) of small building companies won’t last more than two months without cash grants from the Government, according to new data from the Federation of Master Builders (FMB).

Faced with relentless overheads, supply chain blockages, site closures, and difficulty accessing Government financial support schemes, stranded small contractors are facing a grim future without urgent help. The FMB survey asked 332 small to medium-sized (SME) construction firms about the impact of the coronavirus. The results revealed:

Trading

  • 68% of builders have stopped at least 91% of their operations and new inquiries have dropped by 64%.
  • Of the work that has stopped, 80% say this is due to supply chain issues restricting the availability of products and materials; 65% experienced problems maintaining social distancing rules on often small, domestic sites.

Eligibility for Government schemes

  • Just 4% of builders who have applied for the Coronavirus Business Interruption Loan Scheme (CBILS) have been successful. 86% are still waiting to hear from their bank, with 44% waiting more than 10 days.
  • 95% of builders have not received Business Rates Relief from their local authority, with most being ineligible due to not owning business premises.
  • 69% of directors of small limited companies said 80% of their monthly PAYE salary (available through the Coronavirus Job Retention Scheme) would not provide enough support to them during lockdown, as most of their income comes from dividends which isn’t covered by the scheme.

Ability to continue their business

  • 84% of builders have ongoing costs that aren’t covered by Government schemes, the most common being insurance, rent, bills and vehicle and plant hire.
  • 65% of builders say their business can survive for two months or less in the current circumstances, with almost a quarter (23%) saying that they will struggle to even get through the four weeks.
  • 60% of builders believe the Government has not done enough to support them.

Brian Berry, Chief Executive of the FMB, said: “If the Government doesn’t act by extending grant support to more small businesses, the coronavirus will wipe out thousands of small building companies, significantly reducing the capacity of the construction industry to build the homes and infrastructure we need. Builders are suffering because work has stopped, through no fault of their own, but bills are still landing on their doormats. Builders urgently need more money in the bank to get through lockdown.”

“The Government must step up its support for builders immediately with a cash grant system not linked to the business rates system. Builders in Scotland and Wales have access to cash grants, but those in England are being left out. The Government should ensure that small businesses across the UK have access to similar support, to help them to get through these difficult times, and get building again, when this is over.”

 

Essential safety work to replace unsafe ACM cladding on high-rise buildings will continue during the Covid-19 emergency, following a commitment from local leaders to Housing Secretary Robert Jenrick MP. The move is intended to ensure the safety of those living in high-rise buildings with unsafe cladding or insufficient fire safety measures is prioritised.

Earlier this year the government announced a new £1 billion fund to pay for the removal and replacement of unsafe cladding for high rise buildings.

Construction sector specific guidance on how to apply social distancing in the workplace in England. This was also reviewed by Public Health England and the Health and Safety Executive and includes updated guidance for construction workers making clear that ‘work on-site can continue if done in accordance with the social distancing guidelines wherever possible’.

Faithful & Gould has been appointed to advise those planning and doing ACM cladding remediation work, including identifying and increasing awareness of safe practice under current Covid-19 restrictions.

Where work continues on-site, detailed guidance is available from the Construction Leadership Council on further reducing the risk, including measures for maintaining high standards of hygiene.

A number of sites across the country have been leading the adopting safe working procedures. Contractors have been adapting their procedures in ways that include; having decontamination areas on site, enabling workers to hose down overalls before safe disposal; providing additional toilet and washing facilities, reducing the number of workers gathering together; and splitting up work teams with a view to minimising the risk of infection.

Housing Secretary Robert Jenrick MP said: “The new building safety regime will put residents’ safety at its heart and follows the announcement of the unprecedented £1 billion fund for removing unsafe cladding from high-rise buildings in the Budget.”

The National Fire Chiefs Council has also published revised guidance on waking watch interim measures, in the context of Covid-19, that reflects higher rates of occupancy and vulnerability due to people staying home for an extended period of time.

HMRC is gearing up to open it Coronavirus Job Retention Scheme (CJRS) web portal on Monday 20 April and it anticipates that the payments to firms will start to be made from 25 April onwards. But business is seeking confirmation from Government that the scheme will be extended beyond the end of May.

The news come as cash starved businesses look to government to get liquidity into businesses across the the economy, however pressure is growing on government to confirm that CJRS will continue beyond the end of May. At a CBI briefing led by its director general Carolyn Fairbairn, business leaders warned that redundancies could start to be announced from 18 April onwards.”

Firms planning more than 100 redundancies are required to give 45 days notice and start consultation. Where there are more than 20 potential redundancies then 30 days notice is necessary.

HMRC has been advising firms about change to the CJRS relating to employee eligibility:

  • you can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying us of payment of that employee on or before 19 March 2020
  • employees that were employed as of 28 February 2020 and on payroll (i.e. notified to us on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.

More information on this can be found on GOV.UK.

How to claim

As you prepare to make a claim, please note:

  • the online claim service will be launched on GOV.UK on 20‌‌ April 2020 – please do not try to access it before this date as it won’t be available
  • the only way to make a claim is online – the service should be simple to use and any support you need available on GOV.UK; this will include help with calculating the amount you can claim
  • claims will be paid within 6 working days; you should not contact us unless it is absolutely necessary – any queries should be directed to your agent, representative or our webchat service

Information you will need before you make a claim before 20‌‌ April 2020:

  • a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
  • be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
  • the following information for each furloughed employee you will be claiming for:
    1. Name.
    2. National Insurance number.
    3. Claim period and claim amount.
    4. PAYE/employee number (optional).
  • if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
  • if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.

HMRC also advise firms should retain all records and calculations in respect of claims.

Guidance on GOV.UK is being regularly updated so please review it frequently.

 

 

Framework provider Pagabo has appointed Lord Kerslake, the former head of the civil service, as non-executive chairman. He will have a remit to define the organisation’s approach to the way frameworks operate and their pivotal role in the construction industry – and the wider business world.

Lord Kerslake, who is former permanent secretary for the Department for Communities and Local Government and was chief executive of the Homes and Communities Agency for two years, will be helping the framework provider develop its connections to other sectors and strategically assisting Pagabo to expand its ambitions through innovative thinking.

Lord Kerslake said: “Pagabo is a hugely exciting business and a challenger brand in the sector. I am honoured to join the board at Pagabo and contribute to its innovative approach to the sector and into the wider industry.

“Frameworks now play a significant role in the way the industry as a whole operates, and Pagabo’s technology-led approach is leading the field in delivering solid pipelines of work for suppliers and social value for its clients.

“Pagabo has plenty of ambition and is looking to develop into other markets that complement its framework business predominantly around technology and innovation but continues to provide advice and support to its ecosystem, including in this difficult time with Covid-19. We are currently in a response phase and then we will move into recovery. A vibrant construction sector is vital to the economy’s recovery and Pagabo is ready to play its part.”

Simon Toplass, chief executive of Pagabo, said: “Lord Kerslake’s vast experience and expertise will bring new insight, support and contribution to the Pagabo organisation, supporting our progressive approach and establishing us further as a challenger brand to the traditional framework model.”

As part of his role, Lord Kerslake will be working with the rest of the Pagabo board to help it become a key player in the UK’s future public sector procurement policies, as well as its role enabling social value and developing innovative ways to deliver procurement.

During April Pagabo passed £2.63 billion of social value enabled with its two biggest frameworks – Major Works and Professional Services.

High Speed 2 (HS2) has reached the next stage as four joint venture companies receive approval to begin the detailed design and construction phase but construction must follow Public Health England (PHE).

The Government’s ‘Notice to proceed’ marks the formal approval for the project to begin the construction phase and HS2 Ltd is now entering Stage 2 of the main works civils contracts, with each held by a specific joint-venture.

At a time when the construction sector faces uncertainties during the coronavirus outbreak, issuing ‘Notice to proceed’ provides a vote of confidence in construction companies and the wider supply chain supporting HS2.

HS2 Minister Andrew Stephenson said: “While the government’s top priority is rightly to combat the spread of coronavirus, protect the NHS and save lives, we cannot delay work on our long-term plan to level up the country.”

The Department for Transport has awarded four consortia contracts for the full detailed design and construction of Phase One of the HS2 railway. Through these contracts, small and medium businesses have the guarantee of a pipeline of activity for the future, helping to protect jobs and boost certainty for them in the current climate.

The joint-ventures that are responsible for each package of work will be able to commence work in line with Public Health England’s guidance around construction work continuing during the coronavirus outbreak, in a way both safe to their workers and the public.

The GMB Union responded to the news and Eamon O’Hearn, GMB National Officer, said: “HS2 is a project of national importance but the safety of its workforce, and supply chain, must be the overriding priority.

“Construction should be conditional on rigorous observation of social distancing, provision of personal protective equipment where required, individualised risk assessments for workers with underlying conditions, and mandatory dialogue between contractors of all levels and recognised unions.

The joint ventures, originally awarded contracts by HS2 Ltd in July 2017, are:

  • SCS Railways (Skanska Construction UK Ltd, Costain Ltd, STRABAG AG)
  • Align JV (Bouygues Travaux Publics SAS, a subsidiary of Bouygues Construction, Sir Robert McAlpine and VolkerFitzpatrick, a subsidiary of VolkerWessels UK)
  • EKBF JV (Eiffage Genie Civil SA, Kier Infrastructure and Overseas Ltd, BAM Nuttall, Ferrovial Agroman)
  • BBV JV (Balfour Beatty Group Ltd, VINCI Construction Grands Projets, VINCI Construction UK Ltd, VINCI Construction Terrassement)

As well as contracts being awarded today, the Department for Transport has today published the new Full business case High Speed 2 Phase One, setting out the strategic and economic case for the project.

The Construction Leadership Council (CLC) has published the much anticipated Version 3 of its Site Operating Procedures. The refreshed procedures incorporated construction specific social distancing  guidance from Public Health England (PHE).

The key changes in Version 3 include confirmation that the HSE is the enforcing authority for PHE guidelines and that sites will be required to monitor the implementation of the procedures. The procedure clarifies who should not travel to work and provides guidance for those who have no option but to share transport to work.

There is also information about the hierarchy of controls which should be implemented to reduce the risk of transmission where social distancing of 2 metres cannot be achieved.

A CLC statement said: “This guidance is intended to introduce consistent measures on construction sites of all types and sizes in line with the Government’s recommendations on social distancing and ensure employers and individuals make every effort to comply.”

Build UK welcomed the latest procedure but has asked PHE to clarify the guidance for construction states that “where face-to-face contact is essential, this should be kept to 15 minutes or less wherever possible”.

In addition Build UK is seeking further guidance on the use of RPE on construction sites as a means of reducing the transmission of Coronavirus (Covid-19).

A J Morrisroe & Sons have produced an informative video to explain Covid-19 health and safety advice. You can watch it here

More construction sites are are expected to open this week by implementing new ways of working required for the ‘social distancing’ environment caused by the coronavirus crisis.

The Construction Leadership Council plan to reveal Version 3 of their  Site Operating Procedures later today. These are expected to include the latest Public Health England (PHE) guidance on social distancing in the workplace during coronavirus crisis (COVID-19). The procedures will include additional information about the hierarchy of control measures to reduce the risk of transmission, and the need to monitor implementation of the procedures.

In a stement this morning Build UK said:  “The relentless pace and volume of change, along with the unprecedented level of information to be absorbed, has created significant challenges for many in the industry.”

An industry insider told Spector magazine that: “Where sites have been operating principal contractors have tried to introduce measures to avoid breaching social distancing, such as one way pedestrian routes into and around sites, but part of the problem is not all workers seem worried. Many think they are indestructible.”

Last week Public Health England (PHE) updated  guidelines in the sector-specific Construction guidance said: “Where it is not possible to follow the social distancing guidelines in full in relation to a particular activity, you should consider whether that activity needs to continue for the site to continue to operate, and, if so, take all the mitigating actions possible to reduce the risk of transmission.”

PHE also commented about travel to work where there is no option but to share a car with people who are not part of the same household. PHE said:”Journeys should be shared with the same individuals and with the minimum number of people at any one time.”

The construction sector is continuing to battle for survival and it’s making valiant efforts to keep the industry functioning during the coronavirus crisis. But as the exit strategy debate evolves can the new voice of construction make sure that specialist contractors are heard and understood? Adrian JG Marsh considers the options.

Since the coronavirus crisis started the Construction Leadership Council (CLC) has become the much quoted voice for construction. However, does the unelected council truly have a mandate and does it have the capability to represent and harness the innovative culture of specialist contractors?

How is it that a team of industry leaders can craft guidance to cover safe working site operating procedures to combat the coronavirus crisis in response to growing criticism from the Court of Public Opinion, issue these guidelines in a fanfare, only to have an updated version of Site Operating Procedures withdrawn in a matter of hours because they are unworkable.

Clearly the Great Burghers of Construction who sit on the CLC Coronavirus Taskforce who led this initiative have been found wanting. Those preparing the procedures demonstrated a lack of knowing what it is like to operate at the workface of a construction site. If they had that knowledge they would not have made such a pigs breakfast of a set of safe working procedures.

Part of the problem might come from the fact that of the 14 members of the CLC Taskforce, only one and half have involvement in the specialist subcontracting supply chain that delivers the majority of work on construction sites.

Specialist contractors represent approximately 40% of construction output and they employ on either a PAYE or Labour Only Subcontractor basis, a significant segment of workers who are being put at risk on construction sites. They also accept a considerable amount of the risk on construction contracts.

Public Health England says employers should ensure that employees are able to follow safe working guidelines including, where possible, maintaining a two-metre distance from others. So what happens when, where possible, is not possible?

Clients have a responsibility in setting a new agenda and work constructively with the supply chain to find a safe and an efficient-as-possible way of working. But yet again the fragmented structure of the construction sector stumbled and lost valuable time.

Even the Government has been found wanting. No Government minister had been present at any CLC meeting in 2019. So it really comes as no shock that they don’t know how the construction sector operates. And when they came to appoint a Taskforce, they went to a group of people who, bar one and a half, do not employ the majority of workers who install services and systems on site.

But let’s not get bitter and twisted. Construction must take a lot of the blame for getting to where it is today. It’s structure is fragmented and confusing to outsiders, so there is no wonder that its voice has often been lost so that the Government is unsure who to talk to.

If construction’s to successfully emerge from the crisis and rebuild a strong and dynamic industry it should take stock now and learn a lesson. Out of the tragic events of the coronavirus crisis there will be positives.

It should be welcomed by all that a single group, the CLC, is being seen as the voice of construction. The fragmented and complex network of representative bodies has started to feed concerns up and across the construction landscape to the CLC as the single point of contact with a listening Government.

It might not be perfect at the moment but the CLC has to be retained going forward and help to establish a clear strategy that reignites the whole industry when lockdown ends. Who leads that strategy would do well to recognise that specialists are an integral part of the supply chain, and that they should be more involved, and avoid confrontational factional interests seeking to return to the pre-crisis status quo.

We are all in this crisis together and, perhaps by working together with a single cohesive voice, we might then be able to finally deliver on Sir Michael Latham’s 1994 vision of a truly world class industry and confine fragmentation, inefficiencies, adversarial attitudes, and a lack of respect for employees to history and another era.

 

Adrian JG Marsh
Editor – Spector magazine

New data published from the Office for National Statistics (ONS) showed that Construction Output decreased by 1.7% in February – the largest fall in monthly growth since October 2019 and there was also a 5.6% fall in private housing repair and maintenance in the three months to February 2020, the largest fall in this series since October 2012.

The ONS data reveals that this is the first time the industry has experienced three consecutive monthly falls since March 2018.  It means the industry will not have a cushion to fall back as the impact of the pandemic really bites. Construction is more affected than many other industries as most workers are unable to work from home.

“These figures are a worrying sign of sluggishness in the construction sector, which was already evident before the coronavirus outbreak,”  said Clive Docwra, Managing Director of leading construction consulting and design agency McBains,

“The drop in private new housing, which fell 7.7% on the previous month, is a cause for concern as it is the second largest fall since monthly records began in 2010. The bad weather in February was clearly a factor, but the more ominous sign on the horizon is the impact of Covid-19.

“On the back of these disappointing figures, the industry is bracing itself for a severe downturn over the next few months, with Covid-19 already resulting in empty sites and a significant proportion of planned investment on hold.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said: “Repair and maintenance plummeted during a wet winter, and builders have not had the opportunity to revive workloads due to the coronavirus lockdown. They have been suffering due to conditions outside of their control, and further Government help is needed to get this important sector through the crisis.

“The Government must ramp up its support for builders by allowing Directors of small Limited companies to use their dividend payments in their Job Retention Scheme claims. A cash grant mechanism to get builders through this tough time should also be developed, and all financial schemes must come on line as soon as possible.”

Interserve is due to complete the new NHS Nightingale Hospital Birmingham today. The initial phase of the development will have capacity for 800 patients but the new facility will be able to accommodate up to 4,000 patient beds.

Working on behalf of the NHS and the University Hospitals Birmingham NHS Foundation Trust (UHB), Interserve Construction delivered the first phase of the critical NHS facility in an intense building project with more than 400 employees and contractors working on site 24 hours a day for the past seven days. This was achieved in line with the social distancing guidelines set out by the UK Government.

Inter serve has been supported by 60 Gurkhas, who are providing essential labour and distribution delivery, as well as helping to put the beds in place.

The new hospital is the second of several under development in the UK, with others under construction in Manchester and Glasgow in light of the developing situation with COVID-19.

Paul Gandy, Managing Director, Interserve Construction, said:“The NHS Nightingale Birmingham has been built at a remarkable pace and with huge discipline. Our 400 employees and contractors have worked over 40,000 hours since Saturday to build this hospital, employing great logistics and project management skills. The NHS Nightingale Birmingham shows what can be achieved when people come together across the construction sector to protect the NHS and save lives.

“As the principal contractor working with UHB, our key supply chain partners and the NEC, our people have been working on site 24 hours a day to create this lifesaving medical facility.”

Dr David Rosser, Chief Executive, UHB, said: “The extraordinary effort in creating the Nightingale Hospital Birmingham is a total team effort. Without this collective purpose we would not have been able to make the staggering preparations to deliver this facility.”

Saqib Bhatti, the local MP, said: “The colossal effort from the NHS, UHB and Interserve is testament to what can be achieved by this country in a time of crisis. I am proud to have Nightingale Hospital Birmingham in my constituency, and to have witnessed the NEC’s rapid transformation from a thriving events hub to a lifesaving care facility.”

NHS Nightingale Hospital Birmingham in Numbers

  • 400 employees and contractors from Interserve
  • More than 64 miles of cable laid
  • 10 miles of copper piping
  • 15,000m2 of plywood
  • Vinyl flooring across the equivalent of 11.5 football pitches
  • 4,000 patient beds at completion
  • The metal used in the bed bays, laid end to end, would stretch over 22 kilometres