FIS Members invited to HS2 “Meet the Bidder” event

FIS Members invited to HS2 “Meet the Bidder” event

FIS Members have been invited to attend the Meet the Bidder event hosted jointly by the Civil Engineering Contractors Association (CECA) and HS2.  Tier 1 contractors Taylor Woodrow and Gulermark are seeking to engage their supply chains for HS2’s development at Washwood Heath, Birmingham.  This event will offer the chance to understand the opportunities available and for those attending to have 1-2-1 meetings with the short-listed tenderers.

The event will take place on the 7th December 10am – 1pm and will be hosted on MS Teams.

The buyers for this session are seeking bidders in the following areas:

#General #civils and #RC work
#Drainage and #utilities
#Highways #pavements and #surfacing
#Landscaping
#Fencing
#Street #lighting & #EV #charging
#Secondary #steelwork
#GRP platforms
#Building #envelope (#cladding #roofing #glazing #curtain walling)
#Internal and #external doors
#Buildings #fitout (#drylining #ceilings #flooring #carpentry #floor #finishes)
#Insulation (#waterproofing #fireproof)
#Floor & #wall #finishing (#ceramic #vinyl #wood)
#Specific #ceilings & #floors (#raised #floor #works #acoustic #ceiling)
#Epoxy #floor #finishing
#Painting
#Windows & #glazing #supply & #install
#Doors (#fire #doors #folding #doors #wooden #doors)
#Street #furniture

If you wish to participate, please email marieclaudehemming@ceca.co.uk

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Workloads in the finishes and interiors sector hold up

Workloads in the finishes and interiors sector hold up

Whilst uncertainty has dominated headlines, workloads in the finishes and interiors sector held up well in the quarter.  The picture is more mixed when we look to sales, with the balance experiencing growth reducing from 29% to 17% (when comparing to the last survey period) and those experiencing a decline increasing from a fifth to a third of respondents.

Against a backdrop of uncertanty, looking ahead to 2023, those predicting growth in sales are in the minority (just a fifth of responses). Those seeing the market as static or declining are equally split leaving an overall balance of 20% anticipating a reduction in sales. Again the picture for workload is more optimistic with sales from 2022 washing through and a balance of 19% still anticipating growth.  Concerns were experessed about the sub-contractor squeeze as tender price increases do not fully reflect the significant increase in operating costs.

Uncertainty is casting doubt on the viability of some future projects with nervousness amongst investors linked to political and economic uncertainty. It is therefore not surprising to see demand move ahead of labour shortages as the biggest expected constraint for the marke, however, commentry still flags the “alarming lack of quality and reliable labour”.

The full FIS State of Trade Survey Q3 2022 can be downloaded here.

FIS Responds to Big Building Regulations Consultation

FIS Responds to Big Building Regulations Consultation

This week FIS submitted our response to the consultation on implementing the new building control regime for higher-risk buildings and wider changes to the building regulations for all buildings.  The consultation was split into 12 consultation sections relate to the proposed changes to Building Regulations under Part Three of the Building Safety Act 2022.  It starts to give greater insight into how the Building Safety Regulator intends to manage the Building Control Process for Higher Risk Buildings alongside the wider Building Regulatory Process, where the two will align, the additional informaton requirements for Higher Risk Buildings and provide a bit more context in terms of Gateways, Competence, Compliance and Enforcement.

The key areas covered were:

  • New dutyholder and competence requirements on all building work and additional duties for those working on higher-risk buildings. These new roles and requirements aim to ensure a stronger focus on compliance with the regulations
  • A series of robust hard stops (“gateway points”) to strengthen regulatory oversight before a higher-risk building is occupied
  • The approach to Regulator’s notices to support building projects which comprise both higher-risk building work and non-higher risk building work
  • Stronger change control during the construction of higher-risk buildings
  • Additional requirements for building work carried out in existing higher-risk building work e.g. refurbishments
  • The process of certifying building work that have been carried out without building regulations approval (regularisation)
  • Establishing greater record keeping and management in higher-risk buildings (golden thread of information)
  • A mandatory occurrence reporting system in higher-risk buildings
  • More rigorous enforcement powers for building work in all buildings to focus incentives on the creation of reliably safe buildings from the outset and the approach taken to the review and appeal of building control decisions
  • Wider changes to the building regulations to align the existing system with the new system
  • The transitional provisions for changing to the new higher-risk building regime

You can access all the consultation information here (now closed).

FIS responded to 11 of the 12 consultation areas.  In the response FIS raised concerns about some of the timings associated with the Building Control Approval Process and particularly the impact of decision times in the hard-stop gateways.  The FIS also called for support from Government to ensure consideration as to how this will be managed in the standard form contracts, particularly in the initial periods as the process develops and becomes more efficient.  The FIS also noted that the Regulator needs to be prepared to provide quick and clear determination of issues and agile guidance is required to support the transition period.

FIS repeated throughout the response that procurement needs to change and there should be checks and balances through the supply chain to assess the practicality of delivery and ensuring that time and resources is available.

FIS was supportive of Mandatory Reporting requirements, but noted the importance of clarity and potentially the need for anonymity in the process.  The organisation also some concerns around proportionality related to historic prosections and impact on future supply chains.

The final note of caution was around competence and the need to manage the transition to the new era of proving competence as the infrastructure to support evolves.

Commenting on the consultation FIS CEO Iain McIlwee stated:

“Reading through this gives real insight into how much the construction process is going to change and how much resources is going to be required to support it.  This is not just about High Rise Buildings, but in this consultation we see profound change to the entire process and findings from our research into procurement and tender processes were very relevant – this is more about setting up than signing off.  The direction of travel is something we can applaud and we agreed with the vast majority of the statements in the consultation, where we have advised caution is largely around ensuring that we don’t tie ourselves in buerecratic knots and we deliver a streamlined compliance regime that is resourced to enforce – at the end of the day good legislation with bad enforcement is perhaps the worst of all worlds.  We have also emphasised in the transition period the regulators are going to need to work closely with the industry – the delays could criple companies and guidance needs to be agile as it is a complex process and the early guidance will be tested.  We don’t want to be stepping over the bodies of those that were first to the breach as we step forward into a better lanscape for construction!”

If you wish to see a full copy of the FIS Consultation response, email iainmcilwee@thefis.org.uk

For more information on the Buidling Safety Act, click here – this is a regular item at all upcoming FIS Regional Events and Working Groups and you can quiz FIS staff and external experts. 

New Competence Requirements in the Construction Products Sector

New Competence Requirements in the Construction Products Sector

Last week, FIS Technical Director, Joe Cilia joined representatives of the CPA to discuss a new white paper on new requirements for competence in the construction products sector.

The White Paper outlines proposals for a standard to unite everyone who uses or works with construction products under a single consistent way of defining construction product competence. It will apply to all the built environment sector, so this is one of a series of webinars for the different industries and this webinar is particularly aimed for manufacturers of construction products..

The panel discussed various topics ranging from implementation to how the white paper will take a coordinated approach for the built environment to unite behind this standard.

You can download your copy of the white paper here.

Rewatch the discussion here.

Initial Impacts of Recent Market Chaos on Housing and Construction

Initial Impacts of Recent Market Chaos on Housing and Construction

It is still clearly early days into the chaos in the financial markets following the Chancellor’s ‘Mini Budget’. The CPA Summer forecasts certainly didn’t have banks stopping lending for mortgages (40% of all mortgage products had been withdrawn as of Thursday morning) or the Bank of England having to do £65 billion of Quantitative Easing otherwise all pension providers becoming insolvent on our list of key risks. However, there are some impacts for UK construction that we can identify.

The depreciation in Sterling will lead to further increases in construction materials inflation. It’s worth keeping in mind that construction materials prices in July 2022 were already 24% higher than a year earlier and 46% higher than in January 2020, pre-pandemic. Sterling has depreciated 12% against the Dollar since the end of July. This will exacerbate cost inflation as depreciations in Sterling increase the price of imports.

FIS Members can read the full report CPA – Impacts of Recent Market Chaos on UK Housing and Construction here

National Mourning – Guidance for Construction Operations in London

National Mourning – Guidance for Construction Operations in London

CLC has produced advice for London based operations in and around central London during the mourning period.

You can download the document here.

Cognisant of the need for a collaborative effort in this sensitive period and also that many businesses are already under intense pressure, FIS is urging all to consider the principles of the Conflict Avoidance Pledge.  As part of this, members should consider the contractual position and the potential for a Force Majeure event if the contract has that ground of relief in it.  Consideration should be given to contacting your “employer” for an “employer instruction”, which would help to clarify the situation with respect to the time and money associated with any stand-down and help avoid potential disputes in the future.

You can download a Force Majeure template notice of claim form here

FIS has further information available via our Contractual and Legal Toolkit and Helpline.

Construction Product Availability Statement from the CLC

Construction Product Availability Statement from the CLC

Statement from John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, co-chairs of the Construction Leadership Council’s Product Availability working group

A slight slowing of the market over the summer holiday months has resulted in product availability broadly improving.  Some issues remain, with extended lead times continuing for aircrete blocks, bricks, gas boilers and various items containing semi-conductors and other electronics.

Price inflation remains the biggest issue for the entire industry and further significant increases in inflation are anticipated due to energy, raw material and labour cost rises.

We also note that although the UK Government’s recent announcement of a six-month energy price cap for business users will help manufacturers here to some degree, the risks around supply and cost of energy threaten manufacturing throughout the EU.  While EU policy-makers wrestle with their own solutions, the possibility of factory shutdowns on the continent may lead to shortages of products, materials and components exported to the UK.

The root cause of the problem affecting smart meters, electrics, white goods and gas boilers is set to continue into 2023 as sub-component manufacturers struggle to secure supplies of semi-conductors and electronic components in a highly competitive market.  Electrical component shortages are similarly affecting manufacturers in the wider electrical sector, likely to lead to reduced availability and increased prices.

Lead times for most roof tiles are improving.  Separately, we are concerned to hear increasing reports of ungraded and poor battens being stamped as standard.  Contractors are warned to ensure that correct battens are being used.

High demand for bricks, particularly for new housing, continued over the summer and led to reduced stock levels.  This pattern is expected to continue in September, but manufacturers are delivering to agreed schedules with customers.  Energy price hikes present a further challenge to both domestic and imported bricks, although Government support may ameliorate this issue for UK manufacturers.  Aircrete supply has been compounded by a production issue at one of a major manufacturer’s sites, which meant deliveries were reduced in August.

Uncertainty around energy supply in Europe could also impact raw materials for paints and coatings, which are already affected by raw material shortages.  Medium-term, there is a need to amend the UK REACH registration process to ensure chemical registration is not made so difficult and expensive that UK manufacturing loses access to key substances for products.

Overall steel supply has improved, but the EU has completely filled their quotas from non-EU countries, including the UK.  Heavy sections cannot be transported from the UK mainland to Northern Ireland without incurring tariffs.

Rising energy costs are likely to affect timber prices as we move into Q4 and Q1 2023.  There are good stocks on the ground of both structural softwood and wood based panels, but stocks at ports are much lower and buyers will need to consider forward purchases to ensure the specifications they require are available through to year end and into 2023.  Price pressure eased considerably over the summer but log prices remain firm as demand for pulp and paper, pallets and fuel wood is currently very strong throughout Europe.  With energy costs rising, forward replacement prices for structural softwood are unlikely to be at current UK levels.

The effect of high inflation and softening demand has seen shipping output and punctuality improve, and costs for some key UK routes down by a third since the beginning of the year.  It is too early to gauge the impact on the construction sector of industrial action at Felixstowe, but we know that some businesses are suffering logistical headaches and added costs owing to re-directed deliveries.  This Group will also monitor the two-week strike planned for 19 September at Liverpool’s port, Britain’s fourth largest.

Finally, we are saddened to note that the year to June recorded the highest annual level of insolvencies amongst UK construction firms since the financial crisis over 10 years ago, despite strong demand throughout the first half of the year.  The key risk going forward, given the substantive rise in insolvencies, is to what extent sharp cost rises and slowing demand over the next six months will exacerbate the rise in insolvencies.

For all the work FIS is doing around inflation and availability, including recommended contractual terms click here

Commemorating the life of our Queen

Commemorating the life of our Queen

All at FIS are saddened by the loss of our Queen and join our community and nation in mourning, but also express our gratitude for her unwaivering period of public service.  We send our deepest condolences to her family in their time of mourning.

The Government is currently working with the Royal Household on how to commemorate the life of Her Majesty, and further guidance will be available in coming days.

At present businesses across the UK should continue to operate normally but there are some considerations you may wish to make, including:

  • providing an opportunity for your staff to offer their condolences, either by providing your own book of condolence or by directing them to the online book of condolence at the Royal website;
  • identifying arrangements made by Local Authorities to lay floral or memorial tributes;
  • signposting staff on how to donate to one of The Queen’s patronages, with information available on the Royal website;
  • identifying whether your business location is likely to be impacted by arrangements made by Local Authorities, or events planned in central London, and planning your response;
  • considering any changes you might wish to make to your website and social media activities; and
  • where you have flags, lowering them to half mast.

The Royal Household will be the primary source of information on mourning arrangements, and will set out arrangements on Lying-in-State and the State Funeral.  Businesses are encouraged to follow updates on www.gov.uk and the  Royal Website.

Your Local Authority will also be updating their own websites on local arrangements, including any events they may organise which might impact on the locality of your business or local travel.  Members working in London will need to consider carefully the impact on logistics in London in the wake of increased visitors and possible road closures.  We are aware that the CLC are in contract with TFL to ensure any major issues are addressed and communictaed.

The Demise of her Majesty Queen Elizabeth II: National Mourning Guidance

Changes to the Building Regulatons – Aligning with the Building Safety Act

Changes to the Building Regulatons – Aligning with the Building Safety Act

The Building Safety Act marks a wholesale change to the way the building process and demonstration and enforcement of compliance associated with buildings deemed higher risk (see consultation, now closed, on the definition of higher risk buildings) will be managed.

The Act provides a framework for change and Government is now consulting on how elements of wider regulation need to change and principles set down within the Act that will be brought through in secondary legislation.

A portal is now open looking at policy proposals for legislation government intend to introduce to create the building control procedure for higher-risk buildings, as well as wider changes proposed to improve the building control system overall.

They are seeking now views on:

  • New duty holder and competence requirements on all building work and additional duties for those working on higher-risk buildings. These new roles and requirements aim to ensure a stronger focus on compliance with the regulations
  • A series of robust hard stops (“gateway points”) to strengthen regulatory oversight before a higher-risk building is occupied
  • The approach to Regulator’s notices to support building projects which comprise both higher-risk building work and non-higher risk building work
  • Stronger change control during the construction of higher-risk buildings
  • Additional requirements for building work carried out in existing higher-risk building work e.g. refurbishments
  • The process of certifying building work that have been carried out without building regulations approval (regularisation)
  • Establishing greater record keeping and management in higher-risk buildings (golden thread of information – and a key consideration as to how accoutability and responsibility are managed)
  • A mandatory occurrence reporting system in higher-risk buildings
  • Wider changes to the building regulations to help align the existing system with the new system
  • More rigorous enforcement powers for building work in all buildings to focus incentives on the creation of reliably safe buildings from the outset and the approach taken to the review and appeal of building control decisions
  • The transitional provisions for changing to the new higher-risk building regime

The impact on the wider Building Regulations and Building Control Process

As part of this work there is a focus on aligning changes and requirements of higher risk buildings with wider changes to the building regulations – this is consistent with concerns raised through the development of the Act that highlighted concerns over the complexity of a two tier system of Buildinig Control and that Building Control Authorities will now be regulated through the HSE.

Aspects of this includes recommendation of a more onerous application that, instead of depositing full plans, applicants intending to carry out building work on a building that is not a higher-risk building will need to submit a building control approval application with full plans to the local authority prior to commencing building work. The building control approval application will be required to demonstrate how the proposed building work complies with all applicable building regulations’ requirements.   It is likely to lead to greater detailing requirements related to functional requirements of the regulations.

It is also notable that demonstration of competence requirements and demonstration of competence will be under closer scrutiny through the new process for all aspects of the Building Regulations and more consistet with the concepts of accountabilty and dutyholders outlined in the Act as well as a press for greater collaboration, with the inclusion of statements such as:

We propose that the following duties will apply to all dutyholders during design and construction, they must:

  • Plan, manage and monitor their work to ensure the building work complies with building regulations;
  • Cooperate with other dutyholders (e.g. share information, have effective routes of communication, and support other dutyholders in achieving compliance with the regulatory requirements imposed by the new regime for higher-risk buildings, including meeting gateway two and three, golden thread and mandatory occurrence reporting requirements); and
  • Ensure they and the people they appoint are competent (have the necessary skills, knowledge, experience and behaviours and where organisations are involved, the appropriate organisational capability) to carry out design work and building work they are engaged to do and only undertake work within the limits of that competence.

These dutyholders will be aligned to the those in the Construction (Design and Management) Regulations 2015 (CDM).

There are also some interesting aspects related to the Golden Thread that may be complex to manage in the context of start/stop Gateways:

It is expected that the design and construction phases will overlap and influence each other, rather than run consecutively. The Principal Designer should be responsible for updating and managing the golden thread during the design phase. We propose that they will be specifically responsible for:

  • Creating and developing the golden thread (although initial information about the building may be provided by the client) and managing and updating this throughout the design phase;
  • Finalising the golden thread and handing it over to the Principal Contractor on completion of the design phase;
  • Collaborating with the Principal Contractor to ensure any design work done during the construction phase is captured in the golden thread;
  • Ensuring that the golden thread meets the required standards/principles; and,
  • Cooperating and sharing information with the Principal Contractor as necessary.

Associated charges for the Building Control Process also form part of this consultation.

 A New In Occupation Regime

Consultation is also taking place on concerning the in-occupation regime for occupied higher-risk buildings, whilst most of this is not on the surface directly relevant to the construction process and FIS members, it does include some important information related to O&M Manuals and the requirements of the Golden Thread.   The CPA has prepared an excellent summary that FIS Members Can Download here

Next Steps

The consultation deadline is the 12th October.

Full details of the consultation are available here – please consider responding directly, but also sending any specific comments through to FIS on iainmcilwee@thefis.org.uk that we can build in to any required sectoral response.

Aspects of this consultation will be discussed at the upcoming FIS Working Group Meetings – see details of times and locations here.  The FIS will be feeding in our views and working closely directly with the Department and with Construction Products Association and the Construction Leadershp Council to ensue that the industry is seeking concesnus and is aligned and collaborating when we focus on compliance.

Right to Work: Ukrainian & Afghan Workers and end to COVID relaxations

Right to Work: Ukrainian & Afghan Workers and end to COVID relaxations

Employing Ukranian and Afghan Workers

Minister for Refugees Lord Harrington has written to businesses confirming that Ukrainian and Afghan nationals have a right to work in the UK where they have resettled under the Ukraine Family Scheme, Homes for Ukraine Scheme, Afghan Relocations and Assistance Policy or Afghan Citizens Resettlement Scheme. Although the exact process will be determined by how the individual arrived in the UK, employers should conduct right to work checks in the usual manner and contact the Home Office Employer Checking Service (ECS) if further verification if required.

In his letter the Minister re-iterates that all employers in the UK have a responsibility to conduct simple right to work checks before employing someone. These checks are required regardless of nationality – even British citizens are caught by the measures.

Afghan nationals who have resettled in the UK under the Afghan Relocations and Assistance Policy or the Afghan Citizens Resettlement Scheme, and Ukraine nationals who have resettled in the UK under the Ukraine Family and Homes for Ukraine Schemes have a right to work. To evidence that right, employers should conduct right to work checks in the usual way.

For Ukraine nationals, the exact process required of the employer is shaped by how the individual arrived in the UK and the documentation held. But, broadly speaking, at the time of writing:

  1. Where an individual has a stamp in their passport which provides a time-limited right to work, the employer will need to manually check the passport as set out in published guidance, and perform a follow-up check to ensure the required documentation to evidence the right to work for a longer period (i.e. a Biometric Residence Permit) has been obtained;
  2. Where an individual has an eVisa (digital evidence of their immigration status, accessible online), the employer should use the online right to work checking service on GOV.UK in the same way as they would for others in possession of a biometric card; and
  3. Where an individual does not have a passport but instead has an Entry Clearance vignette attached to a ‘Form for Affixing the Visa’ (FAV), where necessary this document can be used as proof of right to work in conjunction with confirmation from the Home Office Employer Checking Service (ECS) in the form of a PositiveVerification Notice (PVN). However, in most cases, shortly after arrival a BiometricResidence Permit is available for collection, and this should be used to access the online checking service.

Where necessary, employers may contact the Home Office Employer Checking Service(ECS) verify right to work:

End of COVID-19 Temporary Changes

The temporary changes to right to work checks introduced in response to COVID‐19, which allow employers to undertake checks via video calls and use scanned copies rather than original documents, are due to end on 30 September 2022. After this date, employers are recommended to verify an individual’s right to work using a certified digital identity service provider (IDSP).

The relevant guidance on Right to Work Checks can be accessed here.

You can visit the FIS Employment Toolkit Here

FIS State of Trade Survey: Cautious optimism prevails for the next 12 months

FIS State of Trade Survey: Cautious optimism prevails for the next 12 months

The market has remained bouyant in Q2 2022 with 54% of respondents reporting growth – this is a similar number to reporting same in Q1 2022, but with the vast majority now seeing sales growth in excess of 5%.  This is positive, but there has also been an upturn in the number of companies reporting declines of over 5%, up from 15 to 21%, underpinning that the market remains volitile.

The annualised picture also shows that, in terms of volume, the market has been pretty strong, with just 7% of businesses indicating that workload has actually decreased by over 5%.  Again anticipated sales are, on the whole, optimistic, with a 67% (down from 75% in the last survey) anticipating growth in sales and 59% reporting an increase in workload in the year ahead (down from 62%).

The key risks to the sector are identified as:

  • A prolonged war in Ukraine leads to material availability issues and continued inflation
  • Inflation impacts viability of planned and future projects
  • Inflation drives aggressive tendering – squeezes margin and impacts viability of businesses, particularly where fixed term prices are imposed unsympathetically.
  • Inward Investment becomes less attractive as companies consider the impact of potential future sanctions in the UK.
  • More ethical scrutiny of investors starts to impact sources of inward investment.
  • Prolongued Labour Shortages constrain growth
  • Retrospective elements of the Building Safety Bill create a blame culture that in turn leads to higher business failure rates and availability of insurance

FIS State of Trade Survey Q2 2022

Changes to the Building Regulatons – Aligning with the Building Safety Act

Building Safety Regulator a new approach to enforcement

The Building Safety Act passed into Law in April 2022 and it brings into being a new Regulator – The Building Safety Regulator will help to deliver the two underlying objectives of the Act, namely securing the safety of people in and around buildings in relation to risks from buildings and improving building standards.

Contrary to popular belief, the The Building Safety Regulator has a wider remit than High Rise High Risk Buildings and is tasked to:

  • implement a new, more stringent regulatory regime for high-rise buildings in England
    • being the building control authority in England for building work on high-rise buildings
    • overseeing and enforcing the new regime in occupation of high-rise buildings
  • oversee the safety and performance of all buildings. This has two aspects:
    • overseeing the performance of other building control bodies (local authorities and registered building control approvers (currently known as approved inspectors))
    • understanding and advising on existing and emerging building standards and safety risks
  • promote competence among industry professionals and regulators to raise standards in the design, construction, and management of buildings

The Regulator will be part of the Health and Safety Executive (HSE) and so the mechanisms and enforcement approach will be familiar to the construction sector already immersed in compliance with CDM.

In a new Factsheet the Building Safety Regulator starts to outline how they imagine this will work in practice, starting with the clear principle (akin to that in CDM) that the person or entity that creates, or is responsible for, a building safety risk should be responsible for preventing, managing, and controlling that risk. This includes building designers, who have a responsibility to design a building that complies with relevant building regulations.

Regulatory intervention will be targeted on activities where there is high actual or potential harm arising from any breach. In judging how far dutyholders have taken steps to reduce or mitigate safety risks, the Building Safety Regulator will balance the degree of risk against the money, time or trouble needed to avert that risk in the particular circumstances, as well as the impact of any action on businesses and residents.

The Building Safety Regulator will expect that dutyholders, in turn, will adopt a sensible and proportionate approach to managing safety, focusing on significant risks.

It is intended that the Building Safety Regulator will employ a variety of methods to encourage and support dutyholders to meet the requirements of relevant Building Regulations and to manage fire and structural risks in buildings in a sensible and proportionate way. This reflects the aims in chapter 8 of the document: A reformed building safety regulatory system: government response to the Building a Safer Future consultation, published by MHCLG in April 2020.

The appropriate and proportionate use of enforcement powers, regulatory tools, and sanctions by the Building Safety Regulator will be set out in a published Enforcement Policy Statement (EPS) in due course.

For further information about the Building Safety Act, including an outline summary of what it all means to the finishes and interiors sector, click here

For further information from the HSE on how they will be supporting compliance and enforcing in the event of non-compliance click here.

 

FIS Focus: Vital Information on Inflation and Product Availability

FIS Focus: Vital Information on Inflation and Product Availability

FIS Position and Support on Inflation and Material Shortages

The past two years have, without doubt, been some of the hardest times businesses in the finishes and interiors sector have faced.  Uncertainty and challenge continues into 2022.  After rapid inflation in 2021 across all material groups, the year started with concerns around the impact of ongoing labour shortages, but in recent weeks the escalation of tragic events in Ukraine have started to put pressure on energy and fuel prices further pressure on the supply chain.  This has resulted in the announcement of further price increases and rapid inflation for key materials, fuel and energy.  Of particular concern for FIS members are increases in insulation, steel and plasterboard.

Where this impacts existing contractual relationships members are reminded to check contractual terms and consider the relevance and application of any fluctuation clauses.  If you are unable to rely on standard fluctuation clauses, an early conversation with your client in terms of your ongoing ability to fulfil the contract in the wake of rapid and unexpected price increases is essential.

Where you are currently tendering, consider carefully the impact of the current inflationary environment, look to link any fluctuation to material and product prices rather than general inflation or ensure that quotes are time stamped and limited.  Where you cannot negotiate a shared risk approach with your client, you need to seriously consider what could worse case scenario mean to your business if prices drifted?

We encourage all in the construction sector to consider seriously the impact of imposing fixed prices at this time.  The sector is working on every tighter margins and this could impact the resilience and ongoing viability of of businesses in the supply chain.  Where concerns are raised, a pragmatic, understanding and collaborative approach is essential.  It is vital that we work together to avoid conflict and we further encourage all companies to consider signing and adopting the principles set down in the Conflict Avoidance Pledge that has be developed by the Royal Institute of Chartered Surveyors (RICS) and endorsed by the Construction Leadership Council (CLC).

Below we provide some information on the market forces that are resulting in ongoing inflationary pressures and additional advice and guidance related to managing businesses and contracts in a high inflation environment.

The aim is to keep it refreshed so our members are have a clear picture and can have informed decisions up and down the supply chain.

When can we expect an end to all of this?

With such a perfect storm of complex and cumulative issues it is difficult to know when we will start to notice improvement or how much worse things may get.  The old adage hope for the best, but prepare for the worst comes to mind.

The FIS is an active participant in the Construction Leadership Council who continue to monitor the situation through a dedicated working group of subject experts – you can access the latest Construction Leadership Council Product Availability Statement here (27 July 2022).

Certainly data from the RICS (published November 2021) construction materials costs in the UK continue to escalate, reaching a 40 year high based on the annual growth of the BCIS Materials Cost Index.  According to Joe Martin, BCIS Lead Consultant “The pressure on materials prices and availability is expected to continue at least until the end of 2022. Labour shortages are expected to evolve as the significant driver for overall construction cost increases next year and the construction sector would need to compete for it with other sectors”.

Above was before the situation escalated in the Ukraine.  The Construction Products Association have prepared for FIS Members an update on the wider impacts of this tragic conflict.

Demand Related Issues

The impact of higher than anticipated demand in key sectors like housing and the domestic refurbishment sector (fuelled by growing household savings) have exceeded expectation.  It is not simply UK demand, but we operate in an increasingly globalised market.  A surge in Chinese consumption is linked to faster than expected recovery from the pandemic fuelling property development and investment in infrastructure and notably by global demand for appliances and electronic goods (many of which are manufactured in China).

Supply Side Issues

As we step into 2022 the rapid escalation of events in the tragic Ukraine has sent oil and gas prices and hence energy costs across the world into a period or rapid inflation which is now feeding through into the price of construction products and logistics.   Since 1 April 2021, wholesale gas had risen from around of 50p/therm to around £2.80/therm by the end of March 2022.

You can track natural gas prices here.

Whilst the UK in not overly reliant on Russia or Ukraine for construction products (which together account for just 1.2% of imports of construction products, some areas such as flat glass and certain timber products have a more significant share from these markets.  Projects could also be impacted by shortages of products such as concrete reinforcing bars or other unrelated shortages (such as bricks) which are still ongoing.

The global situation remains volatile and it is impossible to predict accurately the ongoing impact on material and product prices.  Beyond the escalation in Ukraine, tension between the US and China and genuine concerns about UK Conformity Assessment (UKCA) marking implementation limiting availability at the start of 2023 as manufacturers struggle to get products tested in a compliant fashion in time and guidance remains unclear.

Logistical and Freight Challenges

Beyond supply and demand, inflation and availability problems has been further compounded by a number of issues related to freight and logistics, in 2021 we had the Suez Canal logjam, Brexit and pandemic uncertainty .  An ongoing shortage of lorry drivers has also been reported and has put upward pressure on transport costs.   Whilst shipping freight prices have started to ease in 2022, the invasion of Ukraine has pushed up fuel prices.

Squeezing the supply chain

A key concern is that in the wake of double digit inflation in the price of some materials and increasing labour costs and despite an increasingly healthy pipeline, we are not seeing equivalent inflation in tender prices, which means margins are likely to be squeezed and in extreme cases businesses could be driven into recession.

The  latest tender price reports from MACE is showing that current tender price inflation ran at 7.5% in 2021 and are expected to rise by 5.5% in 2022..

How can I track and report price movements?

There isn’t currently an index of prices specific to products in the Finishes and Interiors Sector, but you can draw out the main material movements via the Office of National Statistics, note this is lagging and prices are changing fairly rapidly at the moment.  It also doesn’t necessarily reflect prices on the ground due to specific grades/distribution buffering etc.

The World Bank commodity price index and London Metals Exchange give a high level picture, but doesn’t get into the detail on products used in the finishes and interiors sector.

The RICS publish the annually the BCIS Material Price Index

Probably the best reference is via the merchant groups, for example :

For the sake of balance, if you publish a similar index, please don’t hesitate to pop a link over by email or in the chat and we’ll include it here.

Information on price of paint from the British Coating Federation

FIS track labour prices on a half yearly basis with information available to contributors.  If interested in learning more email iainmcilwee@thefis.org.

 

Top tips for contracting in a high inflationary market

FIS have produced a new factsheet for members looking at some standard clauses to include with quotations and top tips for contracting at a time of high inflation.

Build UK have also produced information to inform the entire supply chain on how to manage relationships in an uncertain inflationary environment 

Bring your concerns to FIS

If you feel you are being treated unfairly, talk to us, we will do what we can.  We can, through our own contacts in the industry, the CLC and contact with the Small Business Commissioners Office and Civil Service shine a light on negative trends and poor behaviour, it can be done anonymously and handled sensitively so as not to damage your relationships.

FIS is urging the supply chain to heed the advice of the Construction Leadership Council and adopt a collaborative approach and ensure that there is ongoing and open communication through the supply chain and we are doing all we can to work together rather than tearing lumps off of each other.

Too often construction get contractual and adopts a siege mentality, parcelling up and firing risk out hoping it sticks elsewhere.  The much talked about transformation must start now, rather than pushing risk down the supply chain, we need to be communicating with clients, helping them to understand that these events are beyond the control of individual companies and we need to work together to resolve and manage.

Our supply chain has had an unprecedented and difficult year, we need to nurture it back to health, not return to old and punitive ways that will ultimately drive people out of business to the detriment of all.

Useful links:

FIS Webinar: Managing your business in a time of shortage – Listen again here

You can access the latest Construction Leadership Council Product Availability Statement here (27 July 2022).

Construction Product Availability Statement from the CLC

Latest Construction Product Availability Statement from the CLC

Against the backdrop of ongoing volatility, we today received the latest update from the CLC Product Availability Committee.  From an availability perspective the overall tone is positive.  The specific challenges in Northern Ireland aside and despite ongoing reports of chaos at the Ports, the decision to delay the latest round of post-Brexit customs checks means that general product availability continues to improve across virtually all categories.

The Statement also identifies that inflation associated primarily with the ongoing conflict in Ukraine appears to have stabilised, with softening demand, particularly in the retail end of the market contributing.  The underlying conditions remain concerning, however, with many UK manufacturers purchase energy on forward contracts to help manage risk. The current extreme price volatility means that some firms are experiencing electricity cost fluctuating by up to 300% on a day-to-day basis, which may affect the financial viability of some energy-intensive manufacturing particularly during the winter months.

One area for FIS Members to be wary is glass.  There are fresh concerns over the availability and cost of imported glass later in the year, with European plants anticipating reduced production stemming from uneconomic energy costs.

You can read the full statement here.

For all the work FIS is doing around inflation and availability click here

 

Materials performance in extreme heat

Materials performance in extreme heat

With the heatwave this week resulting in record temperatures melting runways and sending the train network into chaos, we were confronted with the stark fact that, at times, we are expected to work in atypical temperatures and we need to consider the full implications of this and what it means, not just to the way we work, but the materials we work with.

FIS reminds all members to check material data sheets for guidance around continuous working temperatures.

To protect members and support contractual issues that may arise, FIS has developed a factsheet focussed particularly on the performance of plasters and compounds in hot conditions and how this can affect the finish and performance of plaster specifically over 25oC.

The factsheet FIS knowledge Materials Performance of plasters and compounds in extreme heat can be downloaded by FIS Members here

The HSE provides a wealth of information to support businesses having to manage hot weather working, this is all linked from our H&S Toolkit here.

Changes to the Building Regulatons – Aligning with the Building Safety Act

Leaseholder Protection, the Defective Premises Act and Non-Cladding Remediation

In the week that the Grenfell Inquiry came to an end (the inquiring but anyway, it will be a while before the conclusions are made) we were greeted with a barrage of updates as  Rt Hon Greg Clark picks up the mantle as Secretary of State for Levelling Up, Housing and Communities from Michael Gove.  The announcements included that 48 Developers have pledged to remediate fire safety defects in buildings over 11 metres that they have played a role in developing over the past 30 years.

This has been followed by a raft of new guidance around how government is going to honour their commitment “to protecting innocent leaseholders from the unfair burden of remediation costs to make their home safe”.  Their focus is now the buildings with 2 or more residential dwellings and at least 11 metres in height or has at least five storeys (whichever is reached first).  Whilst a lot of attention is on the cladding, the guidance makes it clear that the scope of this new regulatory framework is now far broader too.

Through the Building Safety Act Courts have been granted new powers to extend liability to associated companies . The aim is to ensure that civil cases for claims against defective buildings can be brought against companies associated with a developer, preventing the use of complex corporate structures to avoid liability. The government is clear that developers must pay to fix buildings they had a role in developing or refurbishing, even where they no longer own the building. The Act ensures that building owners who are – or are associated with – the developer must pay for the remediation of historical safety defects.

The guidance published this week starts to look at the definition of “relevant defect” and what buildings (and leaseholders) are in scope of the protections.  There is plenty of information published on cladding where cladding remediation is regarded as the removal of or replacement of any part of a cladding system that meets both of the following conditions:

  • it forms the outer wall of an external wall system
  • it is unsafe

But the wider relevant defect approach which identifies that non-cladding remediation is work is undertaken to fix a relevant defect, which is not an unsafe cladding system defect.

Examples of non-cladding remediation include:

  • replacing inappropriate fire doors
  • fixing missing compartmentation, which limits how easily fire can spread through a building
  • replacing combustible walkways or balconies
  • reinforcing low-strength concrete beams to improve structural integrity
  • fixing any other defect in scope of the relevant defect definition that is not a defect of the cladding system

Whilst the developer is in the cross-fire there it feels inevitable that the disputes will not have gone away and the battle ground has shifted.  The likelihood is that the developers will be seeking redress through the supply chain and we got more than an inkling of this in the judgment recently handed down in the case Mulalley bs Martley Homes.  Here contractor Mulalley was engaged on a design and build JCT 1998 Standard Form of Building Contract in 2005 to re-clad the exterior of the five tower blocks for Martley Homes.  Full details of the case are available here (and well worth reading), but the headline is that that contractor is now required to pay £8 million in compensation.  Commenting on the case FIS CEO, Iain McIlwee stated:

“This case is the first of many that will start to set precedent on historic claims and now that the Defective Premises Act has been updated and extended, it is likely that this will spread beyond the realms of cladding.  We remain committed to ensuring that the mechanisms to manage disputes advance at the same speed as the Polluter Pays agenda so that the judgments are fair, but that  huge time and resources is not wasted on legal fees and that we can focus our energies as an industry on getting to grips with the unacceptable legacy that the systemic failure created”

Detailed guidance from the FIS on the Building Safety Act via our Quality Hub here.

You can access the full range of guidance published this week here.  We have included links to some of the most relevant sections below:

Building Safety Act:  Sector Prioritised in Competence Drive

Building Safety Act: Sector Prioritised in Competence Drive

Following the Grenfell Tower fire, FIS has been working at the heart of Working Group Two (WG2), established as one of the Competence Steering Group (CSG) working groups to look at the competence of those installing fire safety systems.  This remit subsequently expanded to cover all installers working in construction and the built environment.

WG2 has recommended that the industry should adopt a framework for all the installer sectors working on in-scope buildings that can be applied to other project types. The framework will consist of:

1. Accredited third party certification of companies
2. Level 2 or 3 qualifications for individuals
3. A card scheme such as, but not limited to, the CSCS
4. CPD refresher training and the maintenance of individual skills
5. All installers have a core knowledge of fire safety in buildings – training to be standardised and made mandatory

In line with these recommendations, WG2 has completed the first phase of its work benchmarking the existing competence arrangements of six pilot installer sectors which have the potential to significantly impact on life safety. The six pilot sectors are:

1. Domestic Plumbing and Heating
2. Dry Lining
3. Fire Detection and Alarms
4. Fire Stopping Specialist
5. Rainscreen Cladding
6. Roofing

The objective of ‘Pilots – phase one,’ was to establish the current competence arrangements, compare them to the WG2’s
recommendations and BSI Flex 8670: Core criteria for building safety in competence frameworks – Code of practice and identify
any gaps.

These Pilots have been completed and WG2 will now move to phase two and the six pilot installer sectors will reconvene with their own Chairs and Terms of Reference, to develop their sector-specific competence frameworks to meet the recommendations set out in Setting the Bar. This work is expected to last between six to nine months with each sector developing a timeline and implementation plan for addressing the shortcomings.

FIS has helped to assemble a working group to focus on Dry Lining, with the initial meeting of the Working Group Chairs scheduled for September.  The organisation is providing support to this group to link to the work around firewalls identification and labelling and ensure that competency frameworks developed and the processes, support required to deliver the required level of competence are practical and to identify any obstacles to systemic success.

FIS CEO Iain McIlwee commented: “The Building Safety Act is here and we need to ensure that we have robust processes to meet the exacting requirements.  Competence is at the heart of it and we looking forward to using this pilot to pull together a lot of hard work that has been put in by members and particularly our Skills Board to ensure that we don’t just know what good looks like, but we know how to get there.  This is a great opportunity to show that the sector is stepping up.”

The latest report Working Group 2 report which provides more context is available here – if you are interested in finding out more about this work and getting involved in the pilot group email iainmcilwee@thefis.org

Find out more about the FIS Competency Passport system here

Find out more about the Building Safety Act here

FIS Wage Rate Index – Half 1 2022

FIS Wage Rate Index – Half 1 2022

To help track movement of wage rates in the UK FIS launched in 2021 The FIS Wage Rate Index.  The aim of this work is to support contract negotiations and to help track the impact of shortages on the cost breakdown of projects.

The survey is conducted every six months and FIS is encouraging all contractor members to take part to add to the rigour and value of the survey.  Data is published as a price index to allow for regional rate variations and all company specific data is managed in the strictest of confidence.  The survey covers core trade roles, labourers, apprentices and construction and site managers.

THE DETAILED RESULTS OF THE SURVEY WILL BE MADE AVAILABLE EXCLUSIVELY TO CONTRIBUTERS.

You can complete the survey via the link here. The survey will close on 8th July 2022.

Amendments to Approved Document B

Amendments to Approved Document B

Government have now published a new document that sets out amendments to guidance previously published in Approved Document B: Fire safety, Volume 1 – Dwellings and Volume 2 – Buildings other than dwellings.

These amendments will be incorporated in the online available Approved Document B Volume 1 and Volume 2 as from 1 December 2022.  The changes highlighted in this amendment booklet take effect on 1 December 2022 for use in England.

The 2019 edition incorporating the 2020 amendments will continue to apply where a building notice or an initial notice has been given to, or full plans deposited with, a local authority before 1 December 2022 and either the building work to which it relates:

  1. has started before that day; or
  2. is started within the period of six months beginning on that day.

The changes focus on the following fire safety provisions:

  1. Ban of combustible materials in and on the external walls of buildings:
    Consequential amendments following the laying of the Building (Amendment) (England) Regulations 2022.
    Updated provisions in Section 10 and 12 of Volume 1 and 2 respectively for residential buildings (purpose groups 1 and 2) with a storey 11m or more in height.
  2. Secure information boxes: A new recommendation for secure information boxes in blocks of flats with storeys over 11m.
  3. Evacuation alert systems: A new recommendation for evacuation alert systems in blocks of flats with storeys over 18m.
  4. Clarifications and corrections: Clarification of further diagrams, further text clarifications and corrections.

A full copy of the document containing details of the amendments is available here.

The current Approved Document B: Fire safety, Volume 1 – Dwellings and Volume 2 – Buildings other than dwellings (2019 edition incorporating the 2020 amendments) is available for reference here

This announcement coincides with additional information published related to updated requirements for Non-Combustible Cladding.

Fire Door Safety Alert: Clarification around FD20s

Fire Door Safety Alert: Clarification around FD20s

Approved documents supporting compliance with the Building Regulations refers to an FD20 Fire Doorset in certain circumstances.  This is no longer a commonly tested option with many manufacturers no longer testing to this standard and certification companies not offering 3rd party accreditation for FD20 products.  In January this year, The Building Control Alliance took the decision to withdraw Technical Guidance Note 9 – Fire Doors in Dwellings in January 2022.  This document set down a deemed to satisfy option that supported the determination of an FD20 based on the following descriptor:

It is still common for an FD30 fire rated door leaf to be installed in a site made frame without the installation of intumescent seals. Whilst this practice may not be directly supported by an appropriate fire test or independent certification, this method of installation has been widely accepted by building control (without objection from DCLG) as providing a sufficient level of protection to escape routes within dwellings.

NHBC has this month published, Technical Guidance note 6.7/19 – FD20 Fire doors (England and Wales) to clarify the situation with FD20 doors.  The Guidance asserts:

Where a fire door is required by the building regulations, this includes the complete door assembly, whether assembled on site or delivered as a completed assembly, consisting of the door frame, leaf or leaves, essential hardware, edge seals and glazing, and any integral side panels. Together these components form the fire door, defined as a ‘fire doorset’ within the approved documents England.

Where the building regulations requires a minimum of a FD20 fire doorset and these are not available to purchase, a fire doorset capable of exceeding the minimum requirement should be selected, typically a FD30 fire doorset.

Where a FD30 fire doorset is purchased to meet a building regulation requirement to provide a FD20 fire doorset, the FD30 fire doorset must be installed in strict accordance with the manufacturers guidance to achieve the FD30 fire doorset performance, in order to ensure the minimum FD20 requirement is met.

From the 1st July 2022 NHBC will only accept fire doorsets which meet the requirements of the building regulations. Separate door frames and doors which have not been tested together will not be acceptable.

The full Technical Guidance Note is available to view on the NHBC Website here.