As part of its work to reduce pressure on public transport during lockdown, Transport for London (TfL) has used data provided information to help businesses identify hotspots on the network. Construction sites should continue to stagger shifts and coordinate with neighbouring sites to reduce the number of workers around these hotspots at the busiest times. Workers who change at Stratford, West Ham and/or Canning Town are being asked to travel further into London and change at Mile End (for Bond Street), Bank (for London Bridge), Embankment (for Waterloo) and Whitechapel (for Canada Water).
Workers continue to be encouraged to walk or cycle to work where possible, and Build UK has produced a simple guide for workers on travelling to work, as well as a helpful poster which can be displayed on site.
The Construction Leadership Council (CLC) welcomes the announcementmade recently by the Housing Secretary, Rt Hon Robert Jenrick MP on expansion of the Building Safety Fund. This included full funding for the removal of unsafe cladding for leaseholders in all residential buildings 18 metres and over (6 storeys) in England; and a finance scheme to provide reassurance for leaseholders in buildings between 11 and 18 metres (4 to 6 storeys).
The CLC recently submitted an industry wideresponseahead the Chancellor’s Budget Statement on 3 March 2021. This focussed on a small number of key interventions including an increase in the funding for the Building Safety Fund to cover the remediation of all eligible buildings and other matters.
Government and industry must continue to work together to ensure the tragedy of the Grenfell Tower fire does not happen again.
The majority of this work is being led by the Ministry of Housing, Communities and Local Government (MHCLG) through their Building Safety Programme and is structured around four key areas: identification of unsafe buildings, making those buildings safe, identifying system problems, and fixing the system.
The construction industry must play its part too and there is already significant work underway.
The Construction Leadership Council Building Safety workstream aims to support CLC and industry engagement with the Grenfell Inquiry, Building Safety Programme, new regulatory bodies and wider work for the built environment. Key objectives include identifying the intersections between the core work of the CLC and Building Safety Programme, where appropriate enhancement and contribution to key building safety regime objectives and driving industry awareness and understanding – key is leadership and culture change both in the immediate (new and existing High Risk Residential Buildings buildings) and longer term for the entire industry.
Over the past two years the Competence Steering Group (CSG) has assembled a coalition of organisations from across the built environment and fire industries together with organisations representing building owners and managers. Their aim was to come up with a blueprint to improve competence for those working on higher-risk buildings, and drive a culture change right across the industry.
The group has produced 2 reports – Raising the Barpublished in August 2019 and Setting the Bar published in October 2020. The work was initiated by the recommendations in Dame Judith Hackitt’s review Building a Safer Future. Since the publication of the ‘Setting the Bar’, the CSG and its 13 Working Groups have consulted widely and taken on board feedback as they have continued to develop sector frameworks. These frameworks will provide the skills, knowledge, experience and behaviours needed to carry out specific roles, and deliver a more rigorous approach to the essential training and assessment that is required.
In addition, MHCLG has commissioned the National Standards Body, BSI, to develop the National Standards for the overarching competence framework and accompanying Publicly Available Specifications (PAS) standards for the three regulated roles of Principal Designer, Principal Contractor and Building Safety Manager.
Improved product safety is also a key part of building safety reforms. Work has been ongoing over the past few years to ensure that the products that go into buildings are safe and therefore buildings are safe. This work has been aligned with the recommendations in Dame Judith Hackitt’s 2018 report Building a Safer Future and the draft building safety bill published by MHCLG in July 2020. This includes the industry development of a code for construction product information, led by the Construction Products Association’s Marketing Integrity Group. The aim of the code is to have a robust and consistent approach to how construction product information is communicated. The draft code proposes the principles of clear, accurate, up to date, accessible and unambiguous information through 11 clauses.
Throughout 2021, the Building Safety workstream will look to share and update the industry via the CLC website on key work and announcements. Most recent activity includes:
The Government has announced a new national regulator for construction products operating within the Office for Product Safety and Standards (OPSS). An independent review has also commissioned to examine weaknesses in previous testing regimes for construction products, and to recommend how abuse of the testing system can be prevented.
Launch of the industry consultation on a proposed new code for construction product information.
Recent article by Graham Watts, Chief Executive of the Construction Industry Council, a Member of the MHCLG Industry Response Group and Chair of its Competence Steering Group.
All in the industry must engage and play their part to improve.
Iain McIlwee FIS CEO added “It is clear that the industry is needs to pull out all of the stops to ensure that profound changes to culture and process happen, but for me the fund still falls short of attacking the problem head on. Cladding is but one issue, it is not addressing the wider aspects that were uncovered in Grenfell and previous disasters. It also concerns me that there is now talk of a levy on development, which could potentially impact funding for future works. For me we are still looking at systemic failure – the Building Safety Fund needs to be more ambitious and better targeted. The Pension Protection Fund offers a good parallel and has been effective in targeting and overcoming A more thinly spread levy, linked to e.g. Insurance Premium Tax that does not leave lease-holders with debilitating loans and further angst”.
The £20 million SME Brexit Support Fund, offers support to help small businesses adjust to new customs procedures, rules of origin, and VAT rules when trading with the EU.
Eligibility: The SME Brexit Support Fund could give you up to £2,000 if your business has up to 500 employees, and no more than £100 million annual turnover.
SMEs who trade only with the EU, and are therefore new to importing and exporting processes, can apply for grants of up to £2,000, to pay for practical support including training and professional advice to ensure they can continue trading effectively with the EU.
For more information on the SME Brexit Support Fund, click here.
Full guidance on how you can use the grant, who can apply and how to apply, click here.
An online portal has been launched to make it even easier for business in the private sector to get involved and find out more about offering rapid testing in the workplace. Business that are open during lockdown can now sign up to rapid testing programmes that identify cases of Covid-19 in employees who are not showing symptoms, to help stop the spread of Covid-19, and ensure vital public and economic services can continue.
Businesses can register to order coronavirus rapid lateral flow tests for employees if:
Your business is registered in England
You employ 50 people or more
Your employees cannot work from home
Testing is key to breaking the chains of transmission. Around one in three people who have coronavirus have no symptoms and may be unknowingly spreading the virus. This expansion of testing will find more positive cases, keeping workers who cannot work from home unknowingly passing on the virus and protecting vital public services. For more information, click here.
Some key points on how this will impact businesses in the Finishes and Interiors Sector:
Key points:
Main focus is to root out the 1 in 3 that have the virus, but show no symptoms
Will support community testing, still open to construction workers for smaller sites
Links with a digital platform and the employee is notified. Employer doesn’t receive “personal medical information”.
The system is based on the Lateral Flow Test and will detect a positive test in 95% of cases when people at their most infectious. Government guidelines have been updated to reflect that self-isolation is essential if someone receives a LFT (it doesn’t need to get rechecked on a PCR test).
In terms of false positives, it is apparently close to 100% specificity (>99%)– Government have emphasised “very, very few people will get a false positive”.
It can’t be mandatory, but will be strongly encouraged.
Plan is to test on sites twice a week (if people visit multi sites, it isn’t a passport system so may get tested multiple times)
It will add to standing time on site
FIS has been consulted and has fed in information related to the introduction and has raised questions around multiple site visits and employer/employee rights. If you have any questions or comments, please don’t hesitate to contact iainmcilwee@thefis.org
It is National Apprentice Week (8 to 14 February 2021). This week provides an opportunity for organisations to showcase the contribution they are making to the future finishes and interiors workforce and society. The Week can provide a platform to come together and celebrate apprenticeship journeys and successes as well as to say ‘Thank You’ to everyone who makes them possible.
All week, young people in England and Wales have been learning how they can pursue a rewarding career in construction this National Apprenticeship Week (NAW), with events and conversations that took place across the country. With approximately 2200 new workers needed in the finishes and interiors sector each year up to 2025, and the CITB Migration Report showing that 16% of companies across construction will look to provide more apprenticeships in response to the challenges of Covid-19 and Brexit, it’s a great time to be talking about apprentices and engage young people in the process.
What can you do?
Taking on an apprentice or utilising the new Construction Traineeship initiative is a fantastic opportunity for any business, although FIS do appreciate that many of you face challenging times. FIS are asking you to post details of apprenticeship opportunities, on the FIS JobSpot and let us know about work placement opportunities. The FIS website has a range of tips and advice on how you can look at taking on apprentices, take a look at the FIS Apprentice – Guidance for Employers you’ll find it at the bottom of the page at Apprenticeships. Young people looking to learn about becoming an apprentice can get some great information from the CITB Go Construct. Scottish Apprenticeship Week will be taking place from Monday 1 to Friday 5 March 2021.
As the Government looks to construction to be a trailblazer in leading Britain’s economic recovery, there are great opportunities and incentives for employers to start getting new talent into finishes and interiors businesses. Up to £2,000 is on offer for each new apprentice an employer hires by 31 March this year, with 19,000 applications for this fund received already. In addition to this there is also a further £1000 of funding available for apprentices under 25 who have an education, health and care plan or have been in the care of their local authority. There’s also currently a £1,000 boost to help companies taking on new trainees and further support via CITB funding and grants for organisations in scope. FIS are a KickStart Gateway organisation and can help members take advantage of this scheme which may encourage you to take on an apprentice.
Post your apprenticeship opportunities on the National Apprenticeship Service websites England by clicking here, and on Welsh Government Apprenticeship Vacancy Service by clicking here; and on the FIS JobSpot
Reposting content from Go Construct and on your own social channels, using the tags, and;
Sharing your apprentice stories with FIS so we can encourage other members
Tag your on social media so everyone can see and share your posts.
This is an opportunity for the finishes and interiors organisations to talk openly with young people and those looking for a career change about the opportunities they have to pursue a rewarding career in the sector, while also attracting new talent where people may be looking for a career change. There is a commitment to get more learners from further education into jobs and apprenticeships, while also increasing the number of apprentices completing their training contact your local college to see if they can help.
Still time to get involved
“Build the Future” is the theme for NAW2021 and the core focus is to encourage everyone to consider how apprenticeships help individuals to build the skills and knowledge required for a rewarding career. Key to this is positive stories, if you are thinking about taking on an apprentice in the finishes and interiors sector, have an apprenticeship success story (either yourself or someone you supported with an apprenticeship that has flourished in your business) please contact the FIS Team.
For the very first time, National Apprentice Week is entirely based in a digital world. From virtual career fairs through to factory tours. There will be personal stories from apprentices and employers about their own journeys and experiences and why apprenticeships help to #BuildTheFuture.
Individuals, employers, training providers and communities are being encouraged to get involved, to celebrate apprenticeships and how they:
TRAIN apprentices, and future proof their workforce and careers though apprenticeships;
RETAIN apprentices, gaining the skills and knowledge needed by the business, and seeing apprentices thrive, whilst having impact;
ACHIEVE a real return on investment from apprentices; realising the business benefits of apprenticeships, with apprentices progressing in their chosen careers.
A toolkit is available now to support the apprenticeship community with planning their activity for National Apprenticeship Week 2021.
You can also join in the conversation with the #AskAnApprentice or #AskAnEmployer sessions to help employers, potential apprentices, teachers and parents understand the real benefits of apprenticeships.
For updates on National Apprenticeship Week and the campaign follow National Apprenticeship Service on our social media channels:
FIS has a raft of information on Apprenticeships, including our Guidance for Employers. If you have plans for National Apprentice Week or have a story that you want to share/tell, please get in touch so we can share via SpecFinish and our Social Channels.
Alternatively give us a call on 0121 707 0077 or email info@thefis.org – we will be happy to help.
Positive stories from the Finishes and Interiors Sector
Find out more about some of the amazing apprentices who have been recognised through the FIS Fit-Out Futures Awards.
For updates during the week follow FIS on Twitter or FIS on Linkedin and if you are sharing an apprenticeship story, please tag us in so we can help amplify on behalf of our community.
The Construction Leadership Council has submitted an industry wide response ahead the Chancellor’s Budget Statement on 3 March 2021.
The submission outlined how the construction sector could most effectively support the UK’s recovery in line with the Government’s key policy priorities to achieve Net Zero, Building Safety, Levelling Up, stimulating economic activity and protecting jobs.
We focussed on a small number of key interventions to drive immediate economic growth and market confidence. These included: Committing to a National Retrofit Strategy; Offering Incentives for the commercial property sector; Expanding the Building Safety Fund; Making the Infrastructure Bank an effective vehicle for regeneration; Securing Local authority funding; Extending the Stamp Duty Holiday and Duty review; Withdrawing Reverse Charge VAT; and Extending employer apprenticeship incentives and Apprenticeship Levy flexibility.
In a letter received today, the Government has set out that it remains committed to introducing the VAT domestic reverse charge for building and construction on the 1 March 2021. The letter from the Rt Hon Jesse Norman MP, Financial Secretary to the Treasury states:
“The Government is determined to tackle VAT fraud in all its forms, and therefore remains committed to introducing the VAT domestic reverse charge for building and construction services on 1 March 2021. As you know, the reverse charge aims to remove the ability of fraudulent operators to collect VAT and then disappear without remitting the VAT to HMRC. The Government still believes it is necessary to bring in the reverse charge now to combat criminal attacks on the VAT system; another delay or cancellation at this stage would create further uncertainty and cost to businesses which have already spent a great deal of time preparing for the change. The Government acknowledged in its response to the industry.”
FIS President Helen Tapper summed up the concerns from industry well in here recent statement as part of the #StopReverseVAT campaign:
“We are a £6m specialist fit-out business who works both for main contractors and directly for clients. Setting aside admin, we anticipate the overall cash cost to the business will be around £175k, a scary number, but for some working exclusively as a sub-contractor, the impact will be far, far worse. After the most harrowing 12 months we have known in our 35 year history where we have lost work, lost money on work, continue to get drawn into difficult contractual issues but have done all we can to carry on and do our bit, this will be a very difficult pill and not one all will be able to swallow.”
FIS CEO Iain McIlwee responded to the letter: “I am frankly appalled by the small thinking from Government, it just seems to me that good hard working businesses, that have carried the economy through the recent pandemic, risking health and having to draw on all reserves of resilience (not to mention cash reserves!) are being hammered because of HMRC’s inability to get on top of alleged VAT fraud. The letter points to Government advice on reducing cashflow impacts, but it will not be enough for many – the numbers are eye watering. It made sense to delay it last year, but there has been no meaningful review and the conditions in the market are wholly different to when the original consultation took place, not least because of the damage of the pandemic and Brexit slamming the door on immigration (which has in part addressed the issue of fraudulent operators to disappear). If it made sense to delay last year, the case is even stronger, Government want us to build build build, but with what? Construction relies on cash in the supply chain and they are taking vital cash out of the system and in the process will crippling businesses and constraining others from investing in innovation and growth.”
To see details and engage in the #StopReverseVAT campaign, visit Linkedin or twitter. If you are inclined to write to your MP on this, contact iainmcilwee@thefis.org for a template letter that you can use as a base.
This excellent report (published by the Foundation of the Wall and Ceiling Industry and made available to FIS Members via the Association of the Wall and Ceiling Industry -AWCI) explores how construction technology is impacting the means and methods of wall and ceiling construction and draws on original interviews with industry thought leaders working in this sector in the US to provide insight into how technology is transforming the sector.
Background
The need for wall and ceiling contractors to work more productively and safely in today’s labour-constrained construction environment is driving investment in
project management software, tracking and tagging systems and prefabrication machinery at wall and ceiling firms.
“The big drivers for me are productivity, quality and safety,” says Stephen Eckstrom, president, California Drywall Company. “I’m going to adopt more technology
if these [drivers] improve.”
Technology Investment Is Increasing
While many in the commercial construction industry have been slow to adapt to new technologies, according to various sources, technology investment is increasingly being seen as important.
“[Technology] will ensure that your company is positioned to offer new levels of service that may set you apart from competitors,” says Nancy Brinkerhoff, president and CEO of Ironwood Commercial Builders in Northern California and 2019–2020 president of AWCI.
“Companies not on board the automation revolution will be left behind,” says S.S. Saucerman in the AWCI’s Construction Dimensions article, “The Weakest Link? Us.”
How Is Technology Defined?
Technology is “the science or study of the practical or industrial arts,” says Webster’s New World College Dictionary. This definition1 suits the objective of this paper,
which is to discuss “practical” applications that affect the wall and ceiling industry’s workflows. Technology includes software, tools, collaboration methods, ways to
gather and analyse data and more.
What Is Meant by Means and Methods of Construction?
The means and methods of construction is a central principle of construction contracts in which the contractor controls the processes and materials used to build
structures falling within his or her scope of work. Often, contractors must provide their own incidental design input, value engineering or minor plan modifications to resolve on-the-spot difficulties during construction. The goal of contract fulfilment is to complete a project efficiently, profitably and within specifications. This is where investment in technology can have an impact.
FIS is grateful to the Association of the Wall and Ceiling Industry (AWCI), our sister organisation in the US who has given us permission to share this report with our membership. It is published by The Foundation of the Wall and Ceiling Industry. The Foundation’s mission is to be an active, unbiased source of information and education to support the wall and ceiling industry.
An overhaul of the Prompt Payment Code (PPC) to crack down on delayed invoices owed to small businesses has been announced by the government today (19 January).
Under new reforms, companies that have signed up to the Prompt Payment Code will be obliged to pay small businesses within 30 days – half the time outlined in the current Code.
Despite almost 3,000 companies signing the Code, poor payment practices are still rife, with many payments delayed well beyond the current 60-day target required for 95% of invoices. Currently, £23.4 billion worth of late invoices are owed to firms across Britain, impacting on businesses’ cash flow and ultimate survival.
To help tackle the problem, businesses owners, Finance Directors or CEOs will be required to take personal responsibility by signing the Code, acknowledging that suppliers can charge interest on late invoices under the Code and that breaches will be investigated. Those signed up to the Code will redouble their efforts to ensure payments are made on time and breaches will continue to be publicised by the government in order to encourage compliance.
The move comes as the government seeks to strengthen the powers of the Small Business Commissioner (SBC) to ensure larger companies pay their smaller partners on time. New powers proposed in a recently closed consultation include legally binding payment orders, launching investigations and levying fines.
Small Business Minister Paul Scully said:
Our incredible small businesses will be vital to our recovery from the coronavirus pandemic, supporting millions of livelihoods across the UK.
Today, we are relieving some of the pressure on small business owners by introducing significant reforms to the UK payments regime – pushing big businesses to pay their suppliers on time.
By signing up to the Prompt Payment Code and sticking to its rules, large firms can help Britain to build back better, protecting the jobs, innovation and growth which small businesses drive right across the UK.
Late payment continues to blight the construction sector with many main contractors reporting greater than 30% of invoices not paid within terms. Late payments impact their bottom line, which can hold back investment or job creation and, in the worst cases, lead to job losses and business closures. The reforms aspire to help to build a culture of prompt payment between companies and challenge UK businesses to change their practices and stand by small partners at a critical time for the UK’s economic recovery.
The changes coming into effect immediately are:
requiring a company’s CEO or Finance Director, or the business owner where it is a small business, to personally sign the Code to ensure responsibility for payment practices is taken at the highest level of an organisation
introducing a new logo for signatories to use in external communications to show their commitment to the Code, making it more damaging to a company’s reputation to breach it
acknowledgement as a condition of signing the Code that suppliers can charge interest on late invoices
enabling administrators of the Code to investigate breaches based on third-party information
In addition, the new requirement for signatories to pay 95% of invoices from small businesses (those with less than 50 employees) within 30 days will be effective from 1 July 2021. The target for larger businesses will remain 95% of invoices within 60 days.
The PPC currently has over 2,800 signatories, who are required to pay 95% of their invoices within 60 days or else be publicly struck off the Code until substantial changes to their payment practices have been made.
FIS CEO Iain McIlwee said:
Ultimately anything that puts further pressure on companies to pay is good, but let’s not kid ourselves that this is anywhere near enough. We have seen companies topping the league of contract awards whilst suspended from the Code and underhand tactics such as no December payments built into contracts to massage working capital figures. We also know that late payment is just one tool in the box of the unscrupulous – how much time is wasted and angst caused whilst we quibble over tiny amounts as a thinly veiled excuse to withhold larger sums or companies imposing spurious penalties ostensibly because of a delay caused by the sub-contractor, but more typically because of poor programming.
Payment malpractices remain a cancer at the core of construction and until we really, wholesale, buy into the principles set down in the Construction Playbook and track payment within contracts, impose new tools like project bank accounts and scrap outmoded cash retentions through our “standard” contracts and stop rewarding those who choke the supply chain of vital cash with contracts, we won’t see the profound change and with it the modernisation of construction that we are all working towards.
When a company is struck off the Code for poor practice, this is publicly announced by the Small Business Commissioner’s Office. A record of signatories and struck-off companies is maintained on the Prompt Payment Code and SBC websites.
To support members in dealing with COVID requirements and the latest edition of the Site Operating Procedures in Scotland (issued this month by Construction Scotland), new guidance has been issued by the CICV Forum Health and Safety Subcommittee, supported by FIS. Whilst it is targeted at the Scottish Operating Procedures, this guidance is developed by a panel of experts and draws on the best available guidance, nationally and internationally.
Community testing an important strand of a wider plan to increase availability of asymptomatic testing. The ambition of that plan is that anyone that cannot work from home during periods of national restrictions has access to rapid asymptomatic testing through one of 3 delivery channels:
1. Institution/employer-led testing
NHS Test and Trace is working with government departments, institutions and employers across both public and private sectors to support delivery of asymptomatic testing to organisations with more than 250 employees, including those providing critical services. Delivery will be through on-site testing in the workplace, the option to refer employees to a particular testing site and rollout of testing at home to individuals (subject to further MHRA approvals). NHS Test and Trace will provide tests, other peripherals, standard operating procedures, training and other guidance (tests will be provided free to private institutions until the end of March). This franchise model builds on the rollouts that have already been undertaken for NHS staff, adult social care sector, universities and schools.
2. Community testing
Expanding the Community Testing Programme to all local authorities in England until at least end of March with establishment of asymptomatic testing sites (ATS) in communities focusing testing of those people that are permitted to leave home for essential reasons, including those unable to access asymptomatic testing through other routes. Community testing is the route through which staff of employers smaller than 250 people would access asymptomatic testing.
3. Home testing
Accessing testing through either a collection or postal model (once this is approved).
Government recognise that as each of these channels develop and are scaled up, there is potential for overlap and will therefore work closely with local authorities, regional convenors and NHS Test and Trace to ensure a common understanding of approach to ensure citizens are directed to the most appropriate asymptomatic testing channel for their needs. We will also ensure information on which employers are engaged in institutional testing is made available to local authorities to aid planning of their community testing programmes.
Find out more via online briefings
DHSC has (via BuildUK) provided the information below and is running a series of webinars daily 2-3pm from Wednesday 20 January – Friday 29 January detailing what the testing programme entails.
If you have suitable sites and would be interested in being considered for the programme please attend one of the webinars next week to get chapter and verse an if still keen to go ahead email iainmcilwee@thefis.org.
Joining Instructions – MS Teams Link – active daily 2-3p, from Wednesday 20th January to Friday 29th January.
The Department for Business, Energy and Industrial Strategy (BEIS) has launched a series of new, on demand videos to help businesses familiarise themselves with the new rules and the actions they should take. Businesses can find out more about 18 topics, including importing and exporting, trade, data, and audit and accounting. There is even some construction specific content.
List of video explainers
Businesses Engaged in Emissions Trading
Businesses Hiring Overseas Staff
Businesses Involved in the Horizon 2020 Funding Service
Businesses Involved with Data
Businesses Operating Online
Businesses Preparing and Auditing Financial Accounts
Businesses who Import and Export
Businesses Providing Services to EU Markets
Businesses Shipping Waste between GB and EU
Businesses Working with Intellectual Property
Chemical Regulations
Moving Goods into, out of, or through Northern Ireland
Placing and Selling Goods on the Market
REACH Chemical Regulations
Recognition of Professional Qualifications
Rules of Origin
Trade Tariffs
Businesses and Trade Agreements (not yet available)
Content is split into 12 sectors with Construction and Housing an option to help refine information and help save time trawling through. Highlights include a video dedicated to Moving Goods into, out of, or through Northern Ireland and a simple introduction to Rules of Origin, which have been flagged as a potential stumbling block for companies in our sector.
Register now to immediately access the video content.
Residents will be protected through the establishment of a national regulator which will ensure materials used to build homes will be made safer, the Housing Secretary Robert Jenrick has announced today (19 January 2021).
The regulator for construction products will have the power to remove any product from the market that presents a significant safety risk and prosecute any companies who flout the rules on product safety. This follows recent testimony to the Grenfell Inquiry that shone a light on the dishonest practice by some manufacturers of construction products, including deliberate attempts to game the system and rig the results of safety tests.
The regulator will have strong enforcement powers including the ability to conduct its own product-testing when investigating concerns. Businesses must ensure that their products are safe before being sold in addition to testing products against safety standards.
This marks the next major chapter in the government’s fundamental overhaul of regulatory systems. The progress on regulatory reform includes the publication of an ambitious draft Building Safety Bill, representing the biggest improvements to regulations in 40 years, and a new Building Safety Regulator that is already up and running in shadow form.
Housing Secretary Rt Hon Robert Jenrick MP said:
The Grenfell Inquiry has heard deeply disturbing allegations of malpractice by some construction product manufacturers and their employees, and of the weaknesses of the present product testing regime.
We are establishing a national regulator to address these concerns and a review into testing to ensure our national approach is fit for purpose. We will continue to listen to the evidence emerging in the Inquiry, and await the judge’s ultimate recommendation – but it is already clear that action is required now and that is what we are doing.
Business Minister and Minister for London Paul Scully said:
We all remember the tragic scenes at Grenfell Tower, and the entirely justified anger which so many of us in London and throughout the UK continue to feel at the failings it exposed.
This must never happen again, which is why we are launching a new national regulator for construction materials, informed by the expertise that already exists within the Office for Product Safety and Standards.
Chair of the Independent Review of Building Regulations and Fire Safety Dame Judith Hackitt said:
This is another really important step in delivering the new regulatory system for building safety. The evidence of poor practice and lack of enforcement in the past has been laid bare. As the industry itself starts to address its shortcomings I see a real opportunity to make great progress in conjunction with the national regulator.
Iain McIlwee, CEO of Finishes and Interiors Sector (FIS) stated:
Bad enforcement is worse than bad regulation as it tilts the market in the favour of the unscrupulous. At the heart of FIS strategy is the FIS Product Process People (PPP) Quality framework, it is no coincidence that the first P is Product. We welcome the new regulator and the principles set down in the Building Safety Bill and look forward to working with all involved in helping to lead improvements in quality and safety in the market.
The regulator will operate within the Office for Product Safety and Standards (OPSS) which will be expanded and given up to £10 million in funding to establish the new function. It will work with the Building Safety Regulator and Trading Standards to encourage and enforce compliance.
The government has also commissioned an independent review to examine weaknesses in previous testing regimes for construction products, and to recommend how abuse of the testing system can be prevented.
It will be led by a panel of experts with regulatory, technical and construction industry experience and will report later this year with recommendations.
In what may well be good news for some companies in the Finishes and Interiors Sector, The Supreme Court has substantially allowed the Financial Conduct Authority’s (FCA) appeal on behalf of policyholders. This completes the legal process for impacted policies and means that many thousands of policyholders will now have their claims for coronavirus-related business interruption losses paid. The impact of this judgement on covering costs associated with the delay in start or abandonment of construction projects is yet to be fully uncovered, but below we explore what the judgement means and how to start assessing your policy.
Background
Many policyholders whose businesses were affected by the Coronavirus pandemic suffered significant losses, resulting in large numbers of claims under business interruption (BI) policies.
Most SME policies are focused on property damage and only have basic cover for BI as a consequence of property damage. But some policies also cover BI from other causes, in particular infectious or notifiable diseases (‘disease clauses‘) and prevention of access and public authority closures or restrictions (‘prevention of access clauses‘). In some cases, insurers have accepted liability under these policies. In other cases, insurers have disputed liability while policyholders considered that they had cover leading to widespread concern about the lack of clarity and certainty.
The FCA’s aim in bringing the test case was to urgently clarify key issues of contractual uncertainty for as many policyholders and insurers as possible. The FCA did this by selecting a representative sample of 21 types of policy issued by eight insurers. The FCA’s role was to put forward policyholders’ arguments to their best advantage in the public interest. 370,000 policyholders were identified as holding 700 types of policies issued by 60 insurers that may be affected by the outcome of the test case.
The High Court’s judgment last September resolved most of the key issues but, because we were unable to reach agreement, insurers and the FCA made ‘leapfrog’ appeals to the Supreme Court (without going to the Court of Appeal first).
What does the judgement determine
The Supreme Court judgment is complex, runs to 112 pages and deals with many issues. In summary, the FCA argued for policyholders that the ‘disease’ and ‘prevention of access’ clauses in the representative sample of 21 policy types provide cover in the circumstances of the coronavirus (Covid-19) pandemic, and that the trigger for cover caused policyholders’ losses.
The High Court’s judgment last September said that most of the disease clauses and certain prevention of access clauses (12 policy types from the sample of 21, issued by six insurers) provide cover and that the pandemic and the Government and public response caused the business interruption losses. The six insurers appealed those conclusions for 11 of the policy types, but the Supreme Court has dismissed those appeals, for different reasons from those of the High Court.
It should be noted that the judgment focussed primarily on policies where notifiable diseases were not specified. It remains the case that the majority of business insurance policies specify covered diseases, with COVID-19 typically not included, and hence they do not provide cover for business interruption in respect of the Covid-19 pandemic.
On the FCA’s appeal, the Supreme Court ruled that cover may be available for partial closure of premises (as well as full closure) and for mandatory closure orders that were not legally binding; that valid claims should not be reduced because the loss would have resulted in any event from the pandemic; and that two additional policy types from insurer QBE provide cover. This will mean that more policyholders will have valid claims and some pay-outs will be higher.
The FCA’s legal have published a bulletin on their website, which may be referred to for further detail.
What today’s judgment means for policyholders
This does open wider potential for claims within the Finishes and Interiors Sector as the judgment brings to an end legal arguments under 14 types of policy issued by six insurers, and a substantial number of similar policies in the wider market which will now lead to claims being successful.
The test case was not intended to encompass all possible disputes, but to resolve some key contractual uncertainties and ‘causation’ issues to provide clarity for policyholders and insurers. The judgment does not determine how much is payable under individual policies, but provides much of the basis for doing so.
Following the High Court’s judgment, insurers decided to pay claims on some policies and the FCA has asked insurers to progress claims on other policies that the High Court said provided cover so that they could be settled quickly following the appeals to the Supreme Court.
Each policy needs to be considered against the detailed judgment to work out what it means for that policy. Policyholders with affected claims can expect to hear from their insurer soon.
Next steps
In short, check your wording – if you have “disease clauses” or “prevention of access clauses” that referenced notifiable diseases without specifying the diseases which were covered and you can identify a quantifiable loss then you may be able to make a claim. If this is the case, make contact with your broker and explore with them the potential and how to structure your claim. Remember – Policyholders with questions should approach their broker, other advisers or insurer. Policyholders who remain unhappy following their insurer’s assessment of their claim may be able to refer their claim to the Financial Ombudsman Service, whose role is to resolve individual disputes.
If you need a second opinion or wish to discuss you clause/claim, please contact the FIS on 0121 707 0077 or sent outline details (including policy wording and an outline of what you believe you claim entitles you to) to info@thefis.org and we can arrange to have the policy reviewed.
The Supreme Court’s judgment will be distilled into a set of declarations. The FCA and Defendant insurers are working as quickly as possible with the Supreme Court to enable the Court to issue its declarations.
The FCA will publish a set of Q&As for policyholders to assist them and their advisers in understanding the test case. The FCA will also publish a list of BI policy types that potentially respond to the pandemic based on data that we will be gathering from insurers.
The FCA has published draft guidance for policyholders on how to prove the presence of coronavirus, which is a condition in certain types of policy. The consultation closes on 18 January, but the FCA is extending the closing date to 22 January only for any supplemental comments arising from the judgment. The FCA will issue finalised guidance as soon as possible after that.
The FCA will continue to keep policyholders appraised of matters as they progress, through its dedicated webpage.
Additional Information
The judgment is available on the Supreme Court’s website.
1) Can I export tariff free under the new UK-EU trade deal?
As of 1 January 2021, goods exported to the EU are eligible for zero tariffs if the goods meet the Rules of Origin requirements set out in the Agreement and have the right documentation. If not, the goods may be subject to EU tariffs.
The same applies for imports to the UK from the EU.
2) What are Rules of Origin?
Rules of Origin determine the ‘economic nationality’ of a good. They are a standard part of free trade agreements (FTAs).
Rules of Origin ensure that only goods produced in the countries party to the FTA (the UK or the EU) benefit from zero tariffs.
3) How do I comply with Rules of Origin?
First, traders need to understand whether their good meets the applicable rules. To do this they need to classify the good to find its Harmonized System Code and then consider the relevant rules for that good. Traders can do this using this online tool.
Second, traders need to understand how to demonstrate origin to the customs authorities and what paperwork they need to include with the good when exported. Traders can self-declare goods meet the rules by making out a statement on origin. Alternatively, the importer can use importer’s knowledge, and traders may need to provide other information. Traders should look at the origin procedures in the text of the Agreement.
4) What if I am importing goods into GB and then (re-)exporting them to the EU?
The UK is no longer part of the EU Customs Union. This means that goods imported into GB cannot move freely between GB and EU Member States or vice versa. To be eligible for zero tariff export to the EU, these goods still need to comply with Rules of Origin. This means there must be some production in the UK. This applies to EU origin goods as well as to goods from the rest of world.
If traders move goods through GB from one EU Member State to another without the goods entering UK customs territory (i.e. without entering free circulation in GB), the goods may not need to meet Rules of Origin.
6) Can I use a customs agent to help me with Rules of Origin?
Compliance remains ultimately the responsibility of the exporter.
7) Do I need a declaration from my supplier?
If the goods you are exporting incorporate originating materials from a supplier, you may need a declaration from your supplier to meet Rules of Origin requirements.
Until 31 December 2021, exporters may make out statements on origin based on supplier’s declarations even if they do not have all the relevant supplier’s declarations in hand at the time they make the statement on origin. Exporters must be confident that the exported goods meet the Rules of Origin requirements and may be asked to retrospectively provide a supplier’s declaration after this date.
Following a meeting with HMRC this week, FIS has joined forces with a number of trade bodies from across the construction sector to urge the Chancellor to review the implementation of the Reverse Charge VAT on the 1st March 2021. FIS has consistently pushed back against the introduction of this new mechanism to collect VAT from the construction supply chain. This follows a letter sent prior to Christmas which has to date received no response from the Chancellor.
Re: Call to withdraw reverse charge VAT in Construction
We are writing to you as the major trade bodies in the construction industry to follow-up on our letter of
10 December 2020, and reiterate our call to you to withdraw the introduction of reverse charge VAT.
We have appreciated the Government’s explicit recognition of the role construction is playing in keeping
vital services and infrastructure running during the pandemic, and the construction sector remains
committed to working with the Government to play a positive role in the country’s longer term economic
recovery.
Reverse charge VAT will restrict cashflow in a vital industry, especially to the smallest firms, at just about
the worst time. This policy risks reversing what modest recovery the industry has made from the
pandemic and will limit the scope for protecting and creating jobs at a time when our country needs a
strong construction sector the most.
As set out in our previous letter, the on-going emergency support for the business community in response
to COVID-19 has been very welcome. However, reverse charge VAT, especially if implemented at this
time, risks negating these benefits. Indeed, the combination of the latest lockdown restrictions, together
with on-going issues in accessing materials from the EU, means that the timing presently could not be
worse.
The policy needs to be withdrawn as a matter of urgency and we hope you will use the forthcoming
Budget to make this change.
In doing so, the Government will avoid significantly negative consequences for the industry. Due to the
public interest nature of this issue, we will be releasing this letter to the media.
Whilst FIS will continue to press, however, companies should be starting to prepare for introduction.
FIS has developed a Reverse Charge VAT toolkit that includes a simple introduction, template resources and a cashflow calculator available here.
Following the communication to, and other engagement with the construction sector on Friday, TfL have now issued a further update on the public transport network in London. Please circulate this to all stakeholders. We would also like to clarify that the previous communication originated with TfL, and not the Secretary of State for Transport.
To aid social distancing for those who do need to travel, TfL continues to run as many services as possible on the public transport network and has an enhanced cleaning regime in place to help keep everyone safe.
However, from 06:00 to 08:00, there are some busy locations at the east end of the TfL network, including on the Jubilee line and at interchanges with national rail, DLR and Overground services.
We would appreciate your help with managing this demand to support social distancing and help ensure the safety of our workforce and others travelling on the network by:
Staggering shifts and/or changing operating hours to help the workforce avoid travelling during the busiest times on the network (06:00 to 08:00). Working with local planning authorities to change site operating hours further if necessary;
Coordinating with neighbouring major sites to stagger operating times or workers’ shift times, to reduce the overall numbers using local public transport stations and services during the busiest times; and
Allocating those shifts starting and finishing around peak travel times (05:45 to 08:15 and 16:00 to 17:30) for workers who can walk or cycle to and from work.
FIS has recieved via BEIS and BuildUK an urgent message from the Secretary of State for Transport and Transport for London.
There is significant pressure on the public transport network in London and the Government is looking at options for reducing the number of passengers at peak times.
If the situation does not improve and construction workers are identified as significantly contributing to overcrowding then more direct action or restrictions could be imposed.
They are urging our members with sites in London to work with their supply chain and neighbouring sites to introduce staggered start and finish times and support workers to avoid travelling during peak times of 05:45 – 08:15 and 16:00 – 17:30 and to walk or cycle as part of their journey.
Amidst a tighter lockdown in Scotland, First Minister, Nicola Sturgeon has further tightened the rules on entering private homes during lockdown in Scotland, but aside from this construction sites can continue so long as they can operate within the standard operating procedures for Scotland.
Last week First Minister Nicola Sturgeon did suggest that construction could be subject to tighter rules and was under review, pointing to the Irish decision to call a halt on construction works, but went on to applaud the industry for efforts made. Whilst tighter restrictions announced today do not go as far as asking construction sites to stop, work in private homes is being restricted (by law) to essential “maintenance, upkeep and functioning”.
Other restrictions being brought in to force include:
Only shops selling essential items – such as clothing, footwear, baby equipment, homeware and books – will be allowed to offer click and collect.
Collections must be outdoors, with appointments staggered to avoid queuing.
Takeaways can no longer allow customers indoors, and must instead operate from a hatch or doorway.
A ban on the consumption of alcohol outdoors in all level four areas – which includes all of mainland Scotland and some islands – meaning takeaway pints will not be allowed.
Reducing the size of groups that can meet outdoors.
It was also announced that statutory guidance will be published for employers to support people working from home.
New rules that will come into force on Saturday, with further detail to be published over the coming days.
As the pandemic continues and a further lockdown in place, there remains a real concern that parties to construction contracts will become embroiled in costly and long-running disputes over the effects of COVID-19 on projects. This is reflected in the latest report from the Construction Leadership Council (CLC).
The Contractual Practices Working Group of the CLC Business Models Workstream recently conducted a questionnaire and a series of interviews with a range of leading industry professionals in the field of construction claims and disputes and contracting parties in the supply chain. Many respondents represent a significant client base from within the construction supply chain and across many sub-sectors. The aim was to help improve the CLC’s understanding on the impact of COVID-19 on contracts and the possible nature and volume of potential claims and disputes now, and in the future.
Of concern is the increase in the number of claims under construction contracts being rejected because of COVID-19. Initial indications found that whilst parties may be inclined to settle an entitlement to additional time for completion, there is a reluctance to agree financial losses, costs and expenses (which is the greater source of contention).
It is too early to know what will happen with those rejected claims. However, there have been positive early signs of commercial settlement to avoid disputes, but at present lower value disputes were considered easier to pursue, leaving COVID-19 related disputes – being more complicated – to a later date in 2021.
The CLC continues to monitor the situation with respect to the potential for widespread disputes and urges all parties to act fairly and responsibly to preserve the competence, capability and capacity within industry to meet the challenges of 2021.
A snapshot of current thoughts and perceptions is published in the summary notehere.
In light of latest changes and new support through the Government’s Plan for Jobs, FIS has updated the FIS Guide to Taking on an Apprentice. This simple guide is designed to support businesses in taking that vital first step in taking on an apprentice. It sets out to introduce companies to the raft of support that is available to them and to understand what their options are.
FIS Skills and Training Lead commented “Taking on an apprentice will ensure the succession of the current workforce. This FIS guide is designed to help and support employers through the apprenticeship process, but the main message is that FIS are here to help at every stage. With new restrictions on immigration and tightening in requirements to demonstrate competence in construction, it is more than ever vital that businesses in the finishes and interiors sector look to apprenticeships and traineeships to attack any emerging shortage of skilled workers.
There are encouraging signs with additional financial support from Government, growing interest from training providers in the new Interior Systems Installer Apprenticeship in England and activities like BuildBack and KickStart coming on stream to support recruitment and new entrant development. But all of this will be in vain if companies and employers don’t rise to this challenge and invest in the home population.”
