In light of secondary legislation to the Building Safety Act and The Building Regulations (Amendment) which came into force on 1 October 2023, many people are looking to existing contractual arrangements and asking if they already fulfil new requirements, or in some cases presuming that they already do due to a resemblance.

This is of particular concern where provisions from the Building Safety Act apply to all building projects, not just to higher-risk buildings (HRBs).

As legislation does not prescribe the fine detail of processes, many of the mechanisms used to facilitate provisions under the legislation such as change control, information management, competence management and mandatory occurrence reporting already exist and are being used.

Whilst this can be viewed as a positive reflection of progress, consider that both compliance and non-compliance can both look very similar to what we are used to seeing on-site, but “business as usual” is by no means the way forward.

Considering the appointment of a “Principal Designer” and Principal Contractor” as an example, these are required by the amended Building Regulations and do not apply only to HRBs as follows:

11D.—  (3) The appointments under this regulation must be made—

(a) in relation to a project which includes higher-risk building work for which an application for building control approval must be submitted to the regulator, before that application is submitted;

(b) in relation to any other project, before the construction phase begins.

Whist these roles need to be appointed, there is no text in the legislation that prohibits a party from sharing these roles and the associated liabilities, meaning that it is quite possible for a D&B contractor to act as both principal contractor, and principal designer.

The danger comes from the presumption that parties on site can fulfil these roles by their function alone without being appointed, or have been appointed when they haven’t, and it bears repeating that according to the Building Regulations:

11D.—  (1) Where there is more than one contractor, or it is reasonably foreseeable that more than one contractor will be working on a project, the client must appoint in writing—

(a) a designer with control over the design work as the principal designer for the purposes of these Regulations, and

(b) a contractor with control over the building work as the principal contractor for the purposes of these Regulations.

Outside of the principal roles, it is important to remember that “designer” and “contractor” are defined only by function, and are not appointed, so consider that it is possible to fulfil these roles unintentionally.

SpecFinish – The Unintentional Designer

FIS – Introduction to the Building Safety Act

The government has today announced tougher measures to tackle the issue of late payments to small businesses. These new measures will be included in the upcoming Prompt Payment & Cash Flow Review, due to be published shortly and will improve delivery and enforcement of policies, enabling more small businesses to get paid on time.

Late payment of invoices and long payment terms are key issues that businesses, especially SMEs, highlight as a barrier to their growth. Owners and managers are forced to spend disproportionate time chasing payments; resulting cash flow problems cause even good, viable firms to struggle.

In 2022, Small and Medium-sized Enterprises (SMEs) were owed on average an estimated £22,000 in late payments. Improving payment culture in the UK will support smaller businesses, many of which do not have the resources to accommodate long or late payments from their business customers and could boost the economy by £2.5 billion annually.

That is why the Government is extending and improving the Reporting on Payment Practices and Performance Regulations and conducted the Prompt Payment and Cash Flow Review.

New measures to be announced in the review will include:

• Extending the Reporting on Payment Practices and Performance Regulations 2017. Following consultation, Government will take forward legislation to extend payment performance reporting obligations.
• We will include new metrics for reporting, including a value metric, so businesses and commentators can see the value of invoices, including invoices paid late, and a disputed invoices metric.  We will also introduce reporting on retention payments for businesses in the construction sector.
• Providing greater advice to small businesses on negotiating payment terms that better suit them, and on how going digital can help them get paid quicker and manage their cash flow.
• Broadening the powers of the Small Business Commissioner: Introducing broader responsibilities, enabling the Commissioner to undertake investigations and publish reports where necessary on the basis of anonymous information and intelligence. This will require primary legislation, so will be subject to the legislative timetable.

The stronger measures will benefit UK businesses by fostering a stronger payment culture and providing businesses with more predictable and reliable cash flow, allowing businesses to spend and invest with greater certainty.

It will reduce the time spent by businesses chasing payments, freeing up more time for other activities that will help them to grow. Tackling late and long payments provides an opportunity to increase investment and productivity across the economy.

This will improve payment culture in the UK to support smaller businesses, many of whom do not have the resources to accommodate long or late payments from their business customers.

FIS Chief Executive Iain McIlwee said:

“It is great to see these recommended changes are being implemented.  This is an area where FIS has long been calling for reform and we have worked closely with a number of specialist organisations this year to highlight our concerns around current reporting practices and to call for a more realistic measure of late payment centered on value that would limit gaming of the system.  The new reporting requirements linked to retention and disputed invoices are also welcomed.

Whilst we would rather see retention ended all together, or at the every least protected in trust, this is again a step forward as it starts to hold businesses to account for behaviours.  If you can measure it, you can start to manage it. 

We will continute to lobby for reform and particularly a review of the payment certification process.  We will also work with colleagues from across the sector to ensure that we aren’t just counting better, but there is enforcement against these measures that sees good behaviours rewarded through procurement and bad practice driven out of our industry.”

Secretary of State for Business and Trade Kemi Badenoch said:

SMEs make up 99 per cent of firms in the UK and are the lifeblood of our economy. I know that late payments are a massive barrier to growth and I am determined to fix that.

The measures we’re announcing will take a big step towards making sure SMEs get their payments on time, helping firms to grow and prosper.

Small Business Minister Kevin Hollinrake said:

Small businesses form a crucial part of large companies’ supply chains. Without them, they couldn’t do business. It’s only right that they should be paid promptly for their services.

SMEs that are paid on time can do more business, scale up and make more profits, delivering growth for the economy.

FIS Calls for payment and retention overhaul