New Visa Route Available

New Visa Route Available

The Home Office has introduced a new immigration route, Global Business Mobility, to support companies expanding their presence in the UK. It includes a number of new visa options for foreign workers: Senior or Specialist Worker, Graduate Trainee, Secondment Worker, Service Supplier, and UK Expansion Worker. Companies will need a sponsor licence to provide a certificate of sponsorship for these new visas, but eligible foreign workers will not need to prove their knowledge of English when applying.

Most foreign workers in construction are likely to be ‘skilled workers’ and will require a Skilled Worker visa to work in an eligible occupation. The Build UK flowchart providing an overview of the process of employing a foreign worker, along with our detailed guidance on How to Get a Sponsor Licence and How to Apply for a Skilled Worker Visa, have been updated to reflect the latest requirements.

FIS Statement: Inflation and Product Availability in the finishes and interiors sector, the what, why, when and how?

FIS Statement: Inflation and Product Availability in the finishes and interiors sector, the what, why, when and how?

FIS Statement on Inflation and Material Shortages (March 2022)

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.  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 (last updated 31st March 2022)

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.

What’s going on with shipping rates? – McKinsey’s analyse why container shipping costs are surging and give their take on what lies ahead for the industry.

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.

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.

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.

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.

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 (21 April 2022).

Buckinghamshire Skills Show – FIS Construction Ambassadors, helping industry recruit

Buckinghamshire Skills Show – FIS Construction Ambassadors, helping industry recruit

FIS is hugely excited to have signed up to the Go Construct/STEM Ambassador Scheme. Go Construct STEM Ambassadors bring the construction industry to life. Ambassadors engage with young people at educational events across the UK to raise aspirations, showcase career options and support learning.

As a sector, we need to really get ahead of bringing in new talent.  There are lots of opportunities within our industry for new entrants and career changers. Careers in the finishes sector are not however widely publicised; teachers and influencers and therefore young people are not aware of the work and training options available. We need to be more visible as people and as businesses!

One of the ways FIS is helping to promote our sector is through the Go Construct/STEM Ambassador Scheme. Go Construct STEM Ambassadors are construction people who act as the face of the industry. Ambassadors bring the construction industry to life, engaging with potential recruits at educational events across the UK. showcasing career options and supporting learning. Examples of Ambassadors activities include running a trade stand at a careers fair, delivering a talk and sharing experiences of getting into and working in the industry, leading practical sessions or workshops, giving young people a taste of life in construction offering site visits and work experience.

Marie Flinter and Catherine Bullough at FIS are helping to drive this great initiative forward and FIS were delighted to be invited to take part at the Spring 2022 Buckinghamshire Skills Show.

Catherine Bullough said:

With over 5000 young people and job seekers visiting the show over two days, we were certainly kept busy speaking with visitors to our stand who were interested in finding out about careers in the finishes and interiors sector. Over 120 businesses and associations attended, so we also had a great opportunity to network with fellow exhibitors such as CITB, the National Federation of Demolition Contractors and Morgan Sindall. It was a real pleasure to attend such a well organised event; we literally just had to turn up with our stand which gave us loads of time to interact with the students and their teachers

One of the career challenges for our sector is that it can be overshadowed by the more talked about trades such as brick work and plumbing. So, we need to be louder and out there! We need lots more people from industry to become ambassadors for the sector and really shout about what a great job being a dryliner or a plasterer or a ceiling fixer is.  Anyone working in the industry can be a Go Construct STEM Ambassador. Go Construct/STEM have resources available which can support your ambassador activity with access to a national network of likeminded people

Whether you’re a first-year apprentice, a qualified dryliner or a company director, we’d love your support to help more people experience the many varied opportunities in our sector. You just need to be passionate about construction and the built environment and be willing to share your experiences with others.

To find out more about the Scheme, please contact either Catherine or Marie at FIS 0121 707 0077 catherinebullough@thefis.org marieflinter@thefis.org. For more information on the Go Construct STEM Ambassador Scheme click here

Are you struggling with labour shortages and recruitment?

Are you struggling with labour shortages and recruitment?

The first of our Regional Training and Recruitment Intervention Events took place in London on Tuesday 22 March 2022.  With labour shortages and recruitment, a key challenge within the sector, presentations and discussion focused on the scale of the problem, local opportunities and provided ideas to support recruitment and retention.

The events are moving round the country and we will also be visiting Leicester, Bristol, Dartford, Manchester and Glasgow. We hope you can  join us at one of these meetings to start the conversation on how we can work together to tackle the skills crisis our sector is facing. To register visit https://www.thefis.org/events/

FIS presented the estimated size of the challenge and suggested systems and methods that employers could use as support.  An outline of the nine government funded schemes was given.  Anthony Frayne from CITB publicised an increase to the grants available specifically for Dry Lining Traineeships and Apprenticeships.  Speakers Rachel Roberts from Greater London Authority presented what is available for employers locally and Jacqui Wordsworth explained the work of, and the support, provided by Women in Construction.  All speakers suggested sources of recruitment that may not have been considered by some and discussions bore out an ambition to promote and attract more people into the sector.  The responses reflected a desire to encourage people from schools, colleges, universities and the rich mix of gender and ethnic diversity available in this country into the finishes and interiors workforce.

John Llamas, Community and Skills Manager, Mace said:

“Really useful meeting this morning and great to see the network working afterwards. Well worth attending if you want to get some insight into support available, how to refine and improve what you are doing to find new people and start the conversation about how we can work better as a supply chain.”

George Swann FIS Skills and Training Lead said

“The loudest message from the London event is FIS know there are employers who are finding it hard out there but as a member of FIS you are never alone, please contact us, if we have not got an answer for you we will know someone who has.  To support recruitment from Schools and Colleges FIS have started to build a network of Construction STEM Ambassadors, as an Ambassador the commitment is two visits per year, if you feel this scheme may help your recruitment needs give us a call”.

Join us at our Regional Training and Recruitment Intervention Events

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FIS Writes to Mayor of London on calls for temporary visa scheme

FIS has written to London mayor Sadiq Khan to follow up on his calls to create a temporary visa scheme for construction workers to tackle the double impact of Brexit and the pandemic on the building industry.

London Mayor Sadiq Khan is proposing that ministers create a Coronavirus Recovery Visa of at least a year, to help sectors struggling with shortages of workers, including construction.

Mayor Khan said: “Tackling London’s housing crisis has always been one of my top priorities since becoming Mayor. We’ve worked tirelessly over the last five years to get London building again, and the construction sector forms a key part of London’s Covid recovery plan. However, both our recovery and efforts to deliver the genuinely affordable homes Londoners desperately need could now be put at risk if there isn’t the skilled workforce available to build them.

“The Government must look beyond their current blinkered approach to immigration and recognise the impending crisis that is already enveloping one of our most vital industries.

“Training our own people to take on jobs in the construction sector is an admirable aim and one we’re working hard to meet but in the meantime, we need skilled tradespeople on site now to manage the short-term crisis and build a strong recovery.”

FIS has written a letter of support the the Mayor.  The organisation has repeatedly raised concerns with the Home Office over recent years that the points based immigration system fails to recognise core trades as “skilled workers”, lacks flexibility to manage “shortages” and has not factored in the impact of COVID on preparing for and now addressing labour concerns in the sector.   Often working on short notice or late in the programme, the sector is typified by rapid turnaround of projects and high levels of contingent workers, which I believe makes us more seriously impacted even than other parts of construction.

Pressure is most acute and well exemplified in the Dry Lining sector.  It is estimated there were approximately 60,000 people employed across the UK as Dry Liners at the start of 2020. To meet demand and address inevitable churn, the occupation has an annual recruitment rate (ARR) of approximately 1,200 individuals per year.  Going in to 2020 the level of EU workers was 40% across the UK, but could be as high as 80 or 90% in London.  A proportion of this workforce came to UK to work and have not put down strong roots and potentially split their time between here and home (working a few months of the year).

 In the letter FIS CEO, Iain McIlwee, comments “Before we worry about who has left, you will see the gap in our figures, across the UK (higher in London) we were hitting close to half of our annual recruitment with immigration.  Plainly put we need to double what we did in terms of recruiting domestic workers, particularly difficult in the current climate.  Beyond this, for every 5% of EU workers that have decided not remain in the UK, we need to find an additional 1,200 workers (effectively doubling our annual recruitment rate again).”

Iain goes on to inform the mayor that “The sector has been identified by CITB as a top 4 priority in terms of shortages and is actively engaged in training reform with a new Apprenticeship Standards and a number structured specialist induction and recruitment programmes run in partnership with the Department of Work and Pensions, but the education and training infrastructure needs time to develop.  We need to evolve the culture in the sector and have to remember that a new recruit tomorrow is not fully productive (in fact initially drains time) – apprenticeship and VQ durations are typically 18 months for Dry Liners and ceiling fixers and 36 months for Plasterer.  COVID has impacted our ability to prepare for and now availability of workers and wage inflation is adding to the challenge and making it more difficult to address.”

If you are having issues recruiting or want to talk to FIS about taking  on an Apprentice, visit the FIS Skills Hub  or call 0121 707 0077 and ask to speak to one of our skills and training  experts.