15 Mar 2016

Construction legislation: 11 things to watch out for in 2016

There are a number of pieces of legislation and guidance set to affect construction this year. Here are 11 you need to look out for.

There are a number of areas of legislation, guidance and practice that will impact the construction industry in 2016.

Here is a brief round-up of what to expect this year:

Small Business, Enterprise and Employment Act 2015

The move towards increased transparency of payment terms and the protection of the supply chain continues with an upcoming statutory duty on companies to publish a half-year detailed report on their payment practices.

The duty to report is currently set to apply from April 2016 although government guidance on the content of this has not yet been published

Build UK’s payment group is currently working to jointly agree a standard, workable, interpretation of the format of the payment report.

CIS compliance test

New regulations are expected to come into force on 6 April 2016 relaxing the compliance test for a subcontractor to be permitted to receive payments gross under the construction industry scheme (CIS).

These will improve the operation, and reduce the compliance burden, of the CIS.

National Minimum Wage and National Living Wage

As part of the July 2015 Budget, the government announced that it would introduce a premium over and above the National Living Wage for workers aged over 25.

The first premium, in April 2016, will be set at 50p, which will result in a higher National Minimum Wage of £7.20 for older workers.

Modern Slavery Act 2015

The Modern Slavery Act 2015 requires commercial organisations with turnover of over £36m to issue a formal statement each year recording action taken to ensure their business and supply chains are free from slavery and human trafficking.

There is a transitionary period for compliance. The first organisations required to comply will be companies whose financial year end is on or after 31 March

Insurance Act 2015

The Insurance Act 2015 comes into force on 12 August 2016. It introduces a duty of “fair presentation” of risk.

Disclosure must be made in a reasonably clear and accessible manner. Representations of fact must be “substantially correct” and representations of expectation or belief must be made in “good faith”.

The Enterprise Bill requires that insurers pay all claims within a “reasonable” time or be liable for damages.

Building information modelling

In 2012, the UK government stated that all government projects would be required to operate at BIM level 2 by 2016.

The Scottish government recently followed suit with a 2017 deadline.

In February 2015, the UK government published Digital Built Britain, setting out its blueprint for implementing BIM level 3.

This is likely to require new BIM protocols for dealing with information and new contracts, including paperless contract models.

European Single Procurement Document (ESPD)

The ESPD is intended to reduce the administrative burden for tenderers.

It will allow all businesses to electronically self-declare that they meet the necessary regulatory criteria or commercial capability requirements.

Only the company that wins the contract will need to submit all the documentation proving that it qualifies for the contract.

Persons with significant control

From 6 April 2016, unlisted UK companies must take reasonable steps to ascertain and record, in a dedicated register, details of each individual who exercises control or significant influence over the company – known as persons with significant control, or PSCs.

Health and safety offences

New sentencing guidelines for health and safety offences came into force on 1 February 2016.

These continue the recent trend for increasing fines as well as taking a harder line on what constitutes offending behaviour.

They include fines of up to £10m and unlimited fines or custodial sentences for directors and senior managers if found guilty of consenting, conniving or neglect in the commission of the offence by the company.

Corporate criminal liability

Last year the courts approved the first deferred prosecution agreement (DPA) in relation to the corporate offence of failing to prevent bribery under the Bribery Act 2010 and the Serious Fraud Office brought the first charges against a corporate for the same offence. This trend is likely to continue, and in February 2016 Sweett Group was ordered to pay around £2.35m for a serious breach of the Bribery Act 2010.

Draft legislation has been published for a proposed new corporate offence of failing to prevent the facilitation of tax evasion. If enacted in its current form, a company would be criminally liable if persons associated with it facilitate tax evasion.

Gender pay gap

Draft regulations published in February 2016 aim to address the gender pay gap by imposing mandatory reporting of pay data for employers with more than 250 staff.

A consultation is under way and the regulations are expected to come into force in October 2016.

15 Mar 2016

Report Highlights Need To Tackle Key Skills Within Construction

More needs to be done to tackle a lack of key skills within the construction industry, according to a new report. The 300-candidate survey, conducted by BRE Academy, found that sustainability and environmental skills as well as trades such as plastering, electrical and plumbing were in short supply across the sector. However, BIM and management skills were seen as lacking on a wider scale, as well as an individual company or organisation basis. In addition, 91% of respondents highlighted a problem with the industry’s image, saying people outside of construction have a ‘different perspective’ of the sector then those within it.

BRE Academy Director Pauline Traetto said that in order to support growth in the industry, creating an engaged workforce is “critical”. “Construction currently contributes £92 billion a year to the UK economy with a workforce of 3 million people,” she said. “Only by grappling with the skills shortage highlighted in this report in areas like sustainability and digital design will the industry be able to deliver a low carbon, high performance future.” Other key features of the report include 61% of respondents saying the industry needed to do more to promote diversity, while 74% said career pathways for young entrants should be ‘actively promoted’. A further 67% said there should be more focus on promoting construction’s hi-tech and digital aspects.

15 Mar 2016

Nearly 60% Of Bosses Began Construction Career As An Apprentice – FMB

New research has revealed nearly 60% of SME construction bosses began their career as an apprentice. The data, from the Federation of Master Builders (FMB), shows that half of owners were also running their own company within seven years of completing their training. In addition, 98% of respondents said they valued an apprenticeship over a degree when looking for new staff Brian Berry, Chief Executive of the FMB, said the data demonstrates an apprenticeship is “the perfect springboard” for a construction career.

“Of those who went on to start their own businesses, more than one in two reached that goal within a mere seven years of completing their apprenticeship training, showing that you can go from being a brickie to a business owner in no time at all,” he said. “Even if running your own firm isn’t what you aspire to do, a construction apprenticeship can nevertheless provide the foundation for a highly rewarding career. Almost 80% of our SME construction bosses said that employment in the sector offers high levels of job satisfaction with tangible results and 87% believe an apprenticeship teaches useful and practical skills. “What’s more, by the age of 23, a bricklayer with five years’ experience can earn up to £31,000 and rising in some cases to £52,000 in London. Given the high levels of university tuition fees, young people have every reason to properly consider a more vocational education and pursuing a career in construction looks an increasingly shrewd move.”