27 Jul 2016

Construction SMEs Still Face Late Payment Challenges – NFB

Construction SMEs are still facing challenges in avoiding late payment and accessing public procurement, according to the National Federation of Builders (NFB). Despite making up 18% of all businesses in the UK private sector, NFB Chief Executive Richard Beresford said construction SMEs are still owed over £30 billion in unpaid invoices.

In a manifesto commitment, the Government has pledged to spend £1 in every £3 on SMEs by 2020. With the appointment of Emma Jones MBE as Small Business Crown Representative, the organisation said it was looking forward to continue the good working relationship which it enjoyed with her predecessor, Sir Stephen Allott. Mr Beresford said: “We look forward to working together with Emma Jones on solutions to current issues concerning greater SME engagement and payment performance in public procurement.”

UK’s Skills Shortage Is A ‘Catastrophe Waiting To Happen’ – DTL

The UK’s skills shortage is a “catastrophe waiting to happen”, according to Develop Training Limited (DTL). The training specialist has called on Prime Minister Theresa May to introduce initiatives to attract workers into the utilities sector. Chris Wood, Chief Executive Officer of DTL, said the crisis “threatens to turn out Britain’s lights”.

“A solution to the twin problems of a chronic skills shortage in our utilities industry and high youth unemployment is obvious – train young people to take the places of the ageing workforce, but it just isn’t happening at anything like the rate that it needs to be,” he said. “The new PM and her Cabinet must make it a government priority to look into ways to correct this issue as a matter of extreme urgency. “We all need confidence that our lights will stay on, our heating will continue to keep our houses warm and our taps keep providing running water, but the day is fast approaching when there will simply not be enough workers to do these vital jobs.”

UK Infrastructure Projects

Balfour Beatty has warned the UK Government that major infrastructure projects are under threat following the country’s decision to leave the European Union. In its ‘Infrastructure 2050’ report, the contractor said prolonged periods of uncertainty will impact infrastructure investment “in the medium to long term”. With a skills shortage currently affecting the industry, uncertainty around the free movement of labour “could cause the industry recruitment and staffing difficulties and may increase costs where demand for labour outstrips supply, with the subsequent risk of project delays.” The contractor added: “This will be particularly relevant for mega projects such as HS2 and the nuclear new build programme. In our view, this requires an early and integrated policy response to both retain the skills of those who have migrated here and to ensure that the UK remains an attractive place for talented people to move to. The country must maintain its skills base.”

While private investment may also be slow as the UK negotiates its exit from the EU, Balfour Beatty said the current climate is ideal for the UK government to borrow money in order to finance infrastructure projects. “Infrastructure investment delivers significant benefits, not only in terms of direct employment relating to the build and long term maintenance of a scheme and the spend that goes via the supply chains; there is also a well-documented multiplier effect,” it said. “Economists estimate that every £1 spent on construction generates £2.84 in total economic activity at least 90% of which stays in the UK. “This could be an opportunity for the much talked about diversification of the economy away from financial services and back towards industries such as engineering, construction and manufacturing, as the UK may no longer be bound by single market rules which restrict a more active industrial policy. This, in turn, would support the rebalancing of the economy more evenly across the regions .”
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20 Jul 2016

Procurement body Scape is boosting the value of its national construction framework to £7bn from an original £5.5bn.

The price hike makes it the country’s most valuable framework. The increase comes as Scape published an OJEU notice for the mega-deal.

Scape said: “The subsequent uplift of £1.5 billion follows feedback from Scape’s ongoing market consultation sessions and is reflective of the growing demand for programme certainty and efficient project delivery across the public sector to deliver across the United Kingdom.” The five lots, with their revised lot values, are

: The new framework will be awarded to multiple lead contractors after the existing deal was dominated by Willmott Dixon.

Bidders will be able to win up to two of the three regional lots or one of the two UK-wide lots, enabling access to multiple providers on the framework.

A single managing contractor will lead each lot supported by an extensive local supply chain.

Mark Robinson, Chief Executive of Scape Group, said: “Since we announced the framework we have engaged in detailed market and client consultation which made it clear that increased values for the options within the framework are essential in helping public sector bodies meet their growing demand for high quality and cost-effective buildings.

“We have listened and we have adjusted the upper value of this framework to take into account the anticipated demand for construction projects over its life.

“This view has not been impacted by recent political events, it is very much business as usual in providing our clients with scalable levels of efficiency and capacity.”

It is expected that successful bidders will be announced in February 2017 and it will fully replace the existing National Major Works framework by May 2017.

12 Jul 2016

Construction companies have been fined £8m for safety offences since sentencing guidelines were changed earlier this year.

New guidance was introduced in February instructing courts to consider the size of a company when it comes to imposing safety fines.

Penalties have soared since then including a £2.6m fine for Balfour Beatty Utility Solutions after a worker was killed in a trench collapse.

Insurance and risk specialist BLM has been tracking fines since the changes.

BLM found that out of 101 health and safety fines issued since February, 38% affected those in the construction sector.

The three highest fines alone totalled £5.6m while directors of two construction companies were also given custodial sentences.

Helen Devery, partner and head of SHE practice at BLM said: “These new guidelines have introduced fines that are proportional to the size of the company, meaning that both small and large businesses will feel the same impact.

“It is expected that fines will remain high for larger firms that are charged with serious offences so businesses need to work harder than ever to avoid incidents and the subsequent negative impact on their people, productivity and profits.”