Procuring for Value

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Earlier this year, the Construction Leadership Council (CLC) called for an outcome based, transparent and efficient industry in its Procuring for Value report.

The report outlined how the industry needs to change to improve productivity, end user satisfaction and safeguard those in the industry, providing recommendations on how government, clients and the industry can develop a brand-new approach to procurement. Bringing construction productivity up to the national average would deliver an extra £15bn of value each year. We need to get clients away from just accepting the lowest bids regardless of quality and the report suggests ways of doing that. It recommends the development of an industry-wide definition of value that takes into account more than just capital cost.

It advocates the production of new forms of contracts that reduce the role of lawyers in the industry. What tends to happen is that most companies hand over the responsibility of administration of contracts to legal advisors with an enormous focus on the theoretical transfer of risk downwards, rather than the placement of risk. Failure to fully understand obligations under the contract, coupled with commercial pressures exerted to ignore the contract (payment terms being the best example of this) create a very uncertain landscape in which some construction activity takes place. The lack of contractual recognition of the whole-life value and the failure to incorporate whole-life risks mean that there is a growing view that current industry forms of contract will not meet future requirements. Contractual models need to be versatile enough to accommodate changes in the sector such as offsite manufacturing, BIM and other advances in technology.

This is the perfect opportunity to make the next generation of contracts cloud based. A contract that creates a living set of priced risks where every relationship has transparency. We need to investigate how contractual forms within the built environment can become digitally enabled and SMART-cloud based to introduce transparency and whole-life project focus.

Based on how the industry has always delivered, the current forms just won’t facilitate innovations, so something needs to change. Construction needs to change. Ann Bentley urges ‘every rung of the supply chain to take responsibility and understand their impact on the industry and the larger financial picture that is at play’ and the report highlights as an industry how we can do just this.

The report builds on the 2016 Farmer Review and proposes steps to implement the construction sector deal by extending existing government policy and industry best practice.

Constructing Excellence in the North East are holding an event on Procuring for Value, looking at the report and what the industry can be doing. It will feature talks from Ann Bentley, Global Director at Rider Levett Bucknall, and Procuring for Value lead for the Construction Leadership Council and Rob Charlton, CEO, Space Group.

 

To register for this event please contact Grace on 0191 5007880 or grace@cene.org.uk

The Rising Threat of Fraud in the Industry

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Over the last few years, the rules surrounding the Construction Skills Certification Scheme card have changed a lot, which means the way fraudsters are working have changed a lot too.

Before 2014, the procedure for obtaining a construction skills card bearing the CSCS logo was relatively straightforward. You could go to the CITB test centre, sit their health, safety and environment test, pass the test and have a card within 48 hours. But as the rules have changed, going as far as chips and ghost marks as well as requiring qualification certificates to be sent into CSCS as part of an application, fraudsters have evolved.

The CITB fraud team have stepped up their search recently as the industry is being targeted more by human traffickers and organised crime rings, due to it being relatively low-risk but high reward. On most of the cases the CITB fraud team are working on, they found that perpetrators using counterfeit skills cards and qualifications often have ties with organised crime groups that are linked to trafficking and modern slavery. One ongoing case has shown that facilitators are making £50,000 – £60,000 a week on this type of activity. There have also been instances where illegally trafficked people found to be in possession of fake cards will admit they didn’t take the test and they sent their photo as part of a package before leaving their country of origin. It really is as organised and calculated as that, and it needs to stop.

It is currently difficult to estimate the number of individuals working with fraudulently obtained skills cards, but the CITB fraud manager, Ian Sidney, believes it is only a small proportion. However, even if it’s just 1 or 2% that’s still too many, that’s hundreds or thousands of people who aren’t trained and are putting themselves and others in danger when working on site.

Clearly, this is not an issue the industry can tackle alone, but there are ways in which we can help. Cards can now be read electronically, something all site managers should be doing. This will alert them to a situation where fraud has been detected and a card cancelled. I understand that a lot of sites still operate with a visual inspection, but that’s where things need to change. We’re all creatures of habit but if it’s going to help with bigger criminal cases, it’s something we need to be doing to protect our industry. The way in which CSCS operates has been radically overhauled in the last seven years and we should be moving with them. The CSCS are now in a position where pretty much all cards are being issued on the basis of a qualification and by 2020, they all will be – so with more effort from industry workers, we should definitely see a change in the next few years.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.

The Skill Mill – giving young offenders a second chance

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Research shows that ex-offenders who manage to find employment are less likely to re-offend. Given the skills shortage, our industry could be an ideal place to teach them the skills they need to get into employment.

There are a number of programmes across the country looking at young offender intervention, and The Skill Mill is one that was home-grown. It started here in the North East and has since grown around the country. The Skill Mill is a Not for Profit Social Enterprise providing employment opportunities for young people aged 16-18. It was established to combine the provision of high quality and cost-effective outdoor work with maximum social impact.

The young employees undertake accredited training and achieve a nationally recognised qualification. They acquire knowledge and skills by working alongside local private contractors and partners. The first site was set up in Newcastle in 2014 and has since expanded to Liverpool, Leeds, Durham and North Yorkshire. Each site takes on four young people for 6 months, paying them minimum wage. It gives them real work experience, a nationally recognised qualification and further opportunities for progression at the end of the programme.

Workers are selected based on a combination of attitude, skills, punctuality and vulnerability. It’s not the usual case of choosing those who is right for the job, it’s quite the opposite. Those who are already ‘work ready’ are not selected; they focus on those who need extra help.

The idea initially came about after the Environment Agency approached the Newcastle Youth Offending Team about cleaning up local waterways, and from that, The Skill Mill was born. It mainly undertakes water and land-based management, helping to reduce flood risks and improve the local environment. Since then, they’ve been commissioned to undertake several projects across the North East. Newcastle City Council commissioned them to protect a low-lying area of the Quayside from coming Spring Tides. The team-maintained culverts around Newcastle, clearing them of silt and other blockages, reducing flood risk and ensuring the structures were accessible for inspection by the Newcastle City Council engineers. The team have also replaced all the wooden sides of the flower beds and planters around Merchants Wharf, a job that was well received by local residents.

There is a 11.5% reoffending rate among those who have already taken part in the programme and when you compare that to the national reoffending rate of 42.2%, it proves it really is working. The end goal is getting all participants into full time employment. Across the five sites in England, from the last cohort of 20 young people, all went on to find employment after the placement ended.

A further six sites are launching next year around the country, funded through a social impact bond from the government’s Life Chances Fund. I’m looking forward to seeing how many more people benefit from the programme and in turn, how the industry benefits from the new talent pool.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.

Our Ecological Responsibility

By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

Eco-friendly, or ecological, construction is building a structure that is beneficial or non-harmful to the environment. Solar power, water-saving appliances and ‘green’ buildings are all terms we’re familiar with, but now wildlife-safe design is receiving more attention than ever before.

Everything from bats and badgers to nesting birds and invasive non-native species, can be found in and around construction sites and land designated for development. Any of these can put a stop to a project or jeopardise planning permission, so it’s important surveys, assessments and mitigation measures are taken. The term ‘protected species’ refers to species that are protected by legislation. The Wildlife and Countryside Act and the Natural Environment and Rural Communities Act make it an offence to intentionally, or recklessly kill, injure, or take a protected species, or damage, destroy or obstruct access to structures or places used by protected species for shelter, breeding or protection.

The industry inevitably involves disturbing existing sites which can impact the ecology. Most development proposals will have the potential to impact on the local biodiversity of the development site either through the direct loss of habitats, the reduction in the value of the habitat or the ability of the habitat to support the species that depend on them. Ecological surveys identify the habitats and/or species that exist within an area at the time of the survey. It is important to ensure that protected species are identified as early as possible in the development of a project, when it is straight forward to accommodate any necessary changes or constraints. It also adds time to a project, so it’s best to identify them as early as possible. After carrying out assessments, if wildlife is identified then they require relocation before any work is started.

During the recent restoration of Lindisfarne Castle in Northumberland, a site of Special Scientific Interest (SSSI), Datim Building Contractors employed a range of initiatives to manage the habitat supporting the wildlife living on the exposed castle and crag. The team considered the findings of weekly ecology surveys and were able to adapt their work to accommodate recommendations from the surveys. A breeding pair of barn owls took advantage of the perfect conditions created by the covered scaffolding to rear two broods of chicks. Once the birds had fledged, Datim even built a ‘swiss chalet’ nestbox to continue to provide shelter for the birds once the scaffolding was removed, enabling the works to continue.

I’d like to think we’re an industry that takes its ecological responsibility seriously, protecting the local wildlife and eco-system wherever possible, so although its legally our responsibility, it’s something that we want to do as well. We all have the same goal, to complete projects as quickly and as efficiently as possible, with wildlife moved to new, safe home where needed.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.

01/11/18 Final Budget before Brexit

 By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

On Monday, Chancellor Philip Hammond announced his latest Autumn budget, the last before Brexit. Within it was plenty of news for the industry, with housing, apprentices and infrastructure all being mentioned, but being announced so close to Halloween, did he deliver a trick or a treat for the industry?

The Chancellor announced that the government have committed an extra £500m of funding to the Housing Infrastructure Fund, which is expected to unlock 650,000 new homes. Although £291m of which is set to go to London, that’s still over half to be shared around the rest of the country – fingers crossed for some for the North East. He said the fund would receive a £38bn boost by 2023/24. I’m not usually the pessimist but that’s a lot of money in a short space of time, so I won’t hold my breath on that just yet. He also announced that the Letwin Review, the investigation into why the UK isn’t building enough homes, recommends reforming the planning system to speed up building, but there are no plans to act upon the suggestion – another case of all talk and no action.

Controversial PFI and PF2 contracts, under which private companies provide public services and infrastructure, are to be completely abolished. All existing contracts under the PFI and PF2 system will be honoured but Hammond said he would never sign off on a PFI contract.

Addressing the newly introduced Apprenticeship Levy, the Chancellor confirmed that smaller firms who train apprentices would have their contribution to the apprenticeship levy halved, falling from 10% to 5%. Apprenticeship starts have plummeted over the last year following the introduction of costs to small firms who want to get young people into work. Dropping the proportion of apprenticeship training costs footed by small firms is a much-needed development which should lead to even more apprenticeship starts.

The Budget briefly, and I mean briefly, mentioned how Brexit will affect the industry, stating that “The government will review its existing support for infrastructure finance, to ensure that it continues to meet market needs as the UK leaves the EU.”
Overall, it was a Budget that made some small adjustments but

lacked bold, long-term commitments, which I think we all expected. While austerity may be coming to an end, it certainly hasn’t ended. While we might have been promised less potholes in the road, with Brexit looming, I think we’re all in for a bumpy year ahead.

For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email catriona@cene.org.uk.