Build UK has published the latest payment results submitted by its members under the Duty to Report on Payment Practices and Performance, which continues to drive greater transparency across the construction sector and is leading to improved payment practices.

Contractor members showed particularly positive results, significantly reducing the time taken to pay invoices to an average of 36 days, down from 45 days just 18 months ago. Over a third have actually improved their performance by 15 days or more during this period. On average, Contractor members now pay 91% of their invoices within 60 days, up from 80%.

Build UK has been benchmarking its members’ payment performance since July 2018, in line with the target set out in the Government’s Construction Sector Deal. Build UK also continues to provide information on the payment performance of central Government departments, with 13 of the 16 departments paying over 95% of their invoices within 30 days.

Compiling data in this way has presented a coherent picture of payment practices within construction, which has been welcomed by Government for driving culture change and enabling informed decision-making.

This initiative, alongside the recent publication of guidance to support the Build UK recommendation on contract terms, is part of Build UK’s wider strategy to promote collaboration in the supply chain and tackle the wider issues associated with the high risk, low margin construction business model.

Build UK Deputy Chief Executive Jo Fautley said:

“We have seen consistent improvement from our members since Build UK began benchmarking their payment performance in 2018. Contractor members in particular have taken the opportunity to change the industry’s approach to late payment, recognising the importance of transparency to drive good practice. There is still work to be done but these latest results show that we are definitely heading in the right direction.”

Hot on the heels of the National Apprenticeship Week, it’s time for Scotland to showcase their apprentices.

‘Talent without Limits’ has been announced as the theme, which will celebrate the diversity and value that apprenticeships bring to employers, apprentices and communities across Scotland today. From highlighting the breadth of industries and roles available to the talent and energy apprentices bring into the workplace.

We urge all our FIS members based in Scotland and Approved Training Providers to let us know about any plans they have for the week and refer any stories/case studies that could help to promote the sector  – email details to yasminkauser@thefis.org or call 07741 552080 and DON’T FORGET to enter your apprentices into the FIS Scottish Awards – Apprentice of the Year category. The deadline for entry is 29 February. 

Check out our FIS Apprenticeship hub and watch and read some of the success stories here: www.thefis.org/skills-hub/careers-index/apprenticeships/

FIS Chief Executive Iain McIlwee attended Build UK’s ‘Any Questions?’ event last week, which delivered an informative and thought-provoking debate.

With HS2 being given the ‘green light’ earlier in the week, the event provided the ideal opportunity to think strategically about how construction must change to deliver an infrastructure revolution.

What matters to construction

• The panel was clear that collective culture change was required, with Nick Smallwood (Infrastructure and Projects Authority) pointing out that it starts at the top, giving the industry leaders in the room a clear role to play.
• Procurement took centre stage, from the impact of Carillion’s collapse and the transfer of risk through the supply chain, to the need for greater investment in technology and innovation. This will require a clear pipeline of work and more consistency from clients, which in turn would enable the supply chain to increase efficiency and productivity.
• Processes, people and skills were identified by Mark Farmer (Cast Consultancy) as crucial to winning back public confidence in the aftermath of Grenfell, while Ann Bentley (Rider Levett Bucknall) was passionate about the industry doing more to address the legacy of the fire and demonstrate that new buildings are both fit for purpose and perform as intended.
  Driving demand for more Modern Methods of Construction with its potential to meet challenging housing targets was raised – can this new way of working also address the desire for greater flexibility and job security?
• The panel was unanimous in its view that we should focus on the positives of working in construction, which included well paid roles at all levels when compared to other sectors.
• This led onto discussion of the current levy and training systems, and whether they are delivering the apprentices the industry needs. Peter Lauener (CITB) rose to the challenge, setting out how CITB was moving from being a delivery body to an enabling one, supporting employers to meet their skills needs.
• Finally, with the attention on net zero carbon, it was agreed that collective action is needed in an industry which contributes 40% of carbon emissions, and this will require a concerted effort from the whole supply chain.

After the probing questions and robust responses, the audience was left in no doubt that the current ways of working are unsustainable and the key question for the industry is whether it is truly ready to do things differently. This presents a huge opportunity, with Build UK and its members well placed to offer the leadership and collaborative working environment that can deliver lasting change and transform construction into a world-class sector.

The Scottish Government is now consulting on retentions and appears to favour a statutory retentions deposit scheme (the link to the consultations is here).  One option is supporting a statutory scheme to ring-fence the monies.  The consultation closes on 25 March 2020.

Regarding the Aldous Bill, which has been calling for a retention in trust policy in England, this Bill lapsed prior to the autumn prorogation of Parliament, but a new and similar Bill is being championed in Parliament by Lord Mendelsohn.

In support of this work SEC Group has worked up a scheme that could be used to ring-fence cash retentions.  SEC has been working as part of a consortium (involving a financial services company, a major insurer, a large tier 1 contractor and a software developer) and has now developed the structure for an IT platform that will support a retentions deposit scheme.  This factsheet provides a simple explanation of how the scheme will operate.  This will help to inform policy and future legislation.

The Construction Leadership Council is still favouring support for the Build UK Retentions Roadmap, which is anticipated to yield zero retentions by 2025.

We would be grateful if you could feed any views on this in to iainmcilwee@thefis.org

For more advice from FIS on retentions, visit the FIS Contractual/Legal Knowledge Hub here

One-day workshop: Low-cost automation for SMEs – 26 February

Digital Construction on a Shoestring is an approach to increasing the digital capabilities of companies in the construction sector by deploying low-cost solutions one at a time.

Featuring interactive discussion and demonstrations, the event will showcase the Shoestring approach, which aims to rapidly accelerate digital use by reducing both the cost and complexity of solutions using off-the-shelf technologies and open source software.

The workshop is aimed at:
• Manufacturing SMEs, trade associations and networks
• Low-cost solution providers
• Regional business councils
• Manufacturing systems research groups

The workshop is being hosted at Cambridge University on 26 February and is free to attend – although places are limited. More information is available here.