Industry still blighted by serious payment issues, CICV survey reveals

Industry still blighted by serious payment issues, CICV survey reveals

Construction businesses in Scotland are still suffering the scourge of late payments, outstanding retentions and unexpected charges, a new survey by the CICV has revealed.

Some 68% of respondents said their payment terms were altered negatively, with 60% claiming adjustments to payments were made with little or no explanation. And 69% of those surveyed said the time and cost of chasing outstanding moneys was their most significant problem when it came to payment.

The in-depth survey on cashflow and payments was undertaken to help an accurate picture of the current financial landscape in the Scottish construction industry.

Answered by those businesses which operate both as main and subcontractors in the public and private sectors, its key findings included:

  • 52% reporting that they still have problems getting retentions paid
  • 44% revealing that they had been hit with unexpected charges
  • 40% disclosing that they “always or often” had payments reduced
  • 30% saying payment delays have a “major impact” on their company.

Some 50% of respondents said they required external assistance to deal with payment disputes, with 54% saying they had referred a dispute to adjudication.

And 62% of those surveyed also said they were aware of project bank accounts, but only 17% had actually used them.

Len Bunton, Chair of the CICV’s Pipeline & Commercial sub-group, said:

“From these findings, it is clear – and also rather depressing – that cashflow and payment issues are still major problems in the construction industry in Scotland.

“It is especially frustrating to see so many financial disputed still going to costly adjudication and so little take-up of solutions like project bank accounts and the Conflict Avoidance Process – despite evidence that they do work and help to improve all-important cashflow.”

The survey also invited respondents to provide anecdotal evidence of cashflow and payment issues, along with suggestions of how to improve the current situation.

One said: “I’d like to see less subcontracting and more directly employed trades so there’s a joined-up process and effectively one large purse with collective ownership. The minute we sub-contract we divide, and priorities, focus and responsibility aren’t truly shared.”

Another told the poll: “We have problems with the public sector with too many authorisations that prolong and delay payment. A simplified process would help.”

A third added: “Many years ago, main contractors had to show proof of payment to sub-contractors before they received their next payment. Implementing such a practice for all sub-contractors would hugely improve the payment process.”

While a fourth respondent said simply: “Employers need to be held accountable and measured against the agreed payment terms within the building contract.”

The CICV is now devising a series of measures to help combat issues highlighted in the survey, including the imminent publication of a best practice guide. The collective is also planning an online webinar, offering contractors practical advice to help them avoid payment pitfalls.

David MacDonald, who is also a member of the CICV’s Pipeline & Commercial sub-group, added: “The many troubling issues highlighted by this survey simply reinforce the need for the industry to resolve matters before they escalate into disputes.

“The best practice guide, to be published by the CICV shortly, is designed to be used to eliminate poor commercial management and assist contractors to be much more alert to potential problems and risks.

“The planned webinar will also help contractors navigate the perilous waters of payment, which are clearly still littered with many difficulties.”

The survey is the latest in a string of practical and constructive initiatives launched by the CICV since its creation as the Construction Industry Coronavirus (CICV) Forum in March 2020.

Made up of 28 trade associations, professional services bodies and companies, it has maintained a steady supply of information and practical advice to the sector as well as carrying out surveys, producing animations and posters, hosting webinars and maintaining close dialogue with Scottish Government ministers.

  • A full copy of the survey can be download here.
Consultations launched to support Building Safety

Consultations launched to support Building Safety

The Health and Safety (HSE) and Building Safety Regulator (BSR) have recently launched several consultations and research in connection with building safety.

Professional Conduct Rules for Registered Building Control Approvers (RBCAs)
The BSR will be operating as part of the HSE from April 2023. Building control professionals will have to register with the BSR to perform building control work in England. The professional conduct rules sets out standards of professional conduct and practice that registered building control approvers are expected to meet.

The professional conduct rules are mandatory principles of conduct and standards applying to all who wish to register with the BSR as Registered Building Control Approvers (RBCA) in the private sector.

The HSE are seeking views on the proposals and the consultation closes on 17 February 2023.

Draft Code of Conduct for Registered Building Inspectors
Building control professionals will have to register with the BSR to perform building control work in England. The code of conduct sets out standards of professional conduct and practice that registered building inspectors (RBIs) are expected to meet.

The code of conduct are mandatory principles of conduct and standards of behaviour for RBIs, whether they work in the private or public sector.

HSE are seeking views on the proposed code of conduct and the consultation closes on 17 February 2023.

Managing Building Safety
The BSR is inviting views on their information document that highlights the necessary competency for those managing high risk buildings (HRBs), including a summary of the recent British Standard, publicly available specification (PAS):

  • PAS 8673:2022 Built environment – Competence requirements for the management of safety in residential buildings – Specification

 The consultation will close on 24 April 2023 and can be found here.

Building Safety Competence Information for Principal Contractors and Principal Designers
The BSR is inviting views on their information document that highlights the necessary competency for the new principal designer and principal contractor roles, including a summary of the recent British Standards, publicly available specifications (PAS):

  • PAS 8671:2022 Built environment – Framework for competence of individual Principal Designers – Specification
  • PAS 8672 Built environment – Framework for competence of individual Principal Contractors – Specification

 The consultation will close on 24 April 2023 and can be found here.

HSE Research Project – Accountable Person and Principal Accountable Person
The HSE has commissioned an independent research agency, Kantar Public, to interview people working in private and public sector housing organisations who will be an Accountable Person or Principal Accountable Person; will make decisions about the role; are knowledgeable about the role; and/or who will work on important aspects of the role (such as building registration, resident engagement and complaints handling).

All interviews will be conducted by independent, experienced researchers at Kantar Public. For further information or to register your interest to participate in this research, please email marios.zampetis@kantar.com

FIS announces Innovation Awards Shortlist

FIS announces Innovation Awards Shortlist

FIS has announced the shortlist for its inaugural Innovation Awards. The awards aim to shine a light on innovation, debunking the myth that our sector is not innovative.

The Awards comprise four categories, Digital, Sustainability, Product-Fit Out and Product – FF&E. A judging panel was set up for each category, who indpenedetly assesed all entries.

Digitl

  • FireDNA – Monitoring Passive Fire Products
  • Chalkstring
  • Performance Based Pay

Sustainability

  • Breathaboard
  • Awallsz Prefabricated Solutions
  • DESSO Origin

Product – Fit Out

  • eekowall
  • Siderise MC Mullion Overclad
  • Drywall Pro-Cut

Product – FF&E

  • Rockfon
  • Wiesner-Hager
  • Yo-Yo DESK Ltd

Congratulations to those who made the shortlist, and thank you to everyone who entered. We will be announcing the winners at the FIS Awards Ceremony on 27 February in London. Reserve your place here.

No Going Back: creating career opportunities for ex-offenders

No Going Back: creating career opportunities for ex-offenders

FIS is working with No Going Back (NGB), an innovative programme of training, support, employment, and housing funded and driven by 35 Livery Companies working collaboratively to reduce re-offending.

With Employment being such a major part of changing people’s lives when people leave prison, helping to dramatically reduce the likelihood of reoffending, between 23 January – 3 of February 2023, New Futures Network are hosting ‘Unlocking Construction’ employment events in prisons across England & Wales. and NGB are delighted to be a part of this in HMP Onley, Brixton, Wandsworth, and Thamesmead.

HMP Wandsworth and HMP Onley would like to invite Employers from the Construction Industry inside to be part of a special employment event on Wed 25 January (Wandsworth) and Wed 1 February (Onley) to support men into sustainable jobs in the construction sector upon release. This could be men with experience or those who are looking to pursue a new career in the sector.  As more than 80% of men released from HMP Onley return to London and the Home Counties, many fantastic potential candidates are keen to find out about jobs on release.

For those attending, the events will follow the format:

HMP Wandsworth – Wednesday 25th January at 1:30 pm (likely finish time 4pm)

An interactive session in the Bounce Back Dry Lining workshop for serving prisoners who are interested in working in Dry Lining – some are currently doing the dry lining training course, and others have completed it.

This event is to improve their awareness of, and access to information on further training and employment opportunities available by introducing them directly to specialists and employers in the sector.  It would give the men a chance to raise any questions to address challenges or concerns relating to employment or training within the sector. The prison will also pre-select a couple of men who are work-ready and approaching release for employers to speak with individually.

HMP Onley – Wednesday 1st February at 8:30 am (likely finish time is 4pm) POSTPONED DUE TO RAIL STRIKE, BUT IF YOU WANT TO BE KEPT UP-TO-DATE ON THE REVISED DATE, USE THE CONTACT LINKS BELOW

HMP Onley are hosting a Construction Fair on the day, with a cross-section of employers from the industry to support men into sustainable employment upon release. This could be men with experience or those who are new and looking to pursue a career in construction.

They are running a morning and afternoon session to allow more prisoners to take part and fit around the prison regime. More than 80% of men released from HMP Onley return to London and the Home Counties, there are many fantastic potential candidates who are keen to find out about jobs on release.  For employers attending, there would also be an opportunity to have a prison tour to visit the Industry Workshops and recently launched Employment Hub.  Training programmes running in this facility include Dry Lining, Carpentry and Joinery and Flooring.

NGB are also happy to facilitate visits in other prisons.

If you are interested in attendng one of these prison visits or finding out more about opportunities to engage in a programme in your local area (or arranging a seperate arrangement for these two facilities), please email jokeane@bouncebackproject.com asap (copy beenanana@thefis.org) or call the FIS on 0121 707 0077.

Lens Blog: Suspension

Lens Blog: Suspension

FIS Consultant Len Bunton looks at the Contractors Right of Suspension and the process that should be followed.

Members can see the full blog

These monthly Blogs are designed to help FIS Members avoid common traps and build on our focus on collective experience.  They share ideas about improving the commercial management of your contracts. In other words, instilling best practice into the way FIS members run and manage their business. What I have endeavored to suggest is ways to ensure you get paid on time, and what you are due.