Why is poor payment still an issue?

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

For me, the big news in the industry last week were plans to charge subcontractors 1.5% of package turnovers to become closer strategic partners. The controversial (to say the least) new plans were announced to overhaul and promote better supply chain relationships across the group. Is this encouraging greater collaboration and alignment with subcontractors or is it just pushing the ‘pay to get paid’ culture that I desperately hoped we’d stay away from?

The Prompt Payment Code was launched 11 years ago in an effort to help SMEs get paid faster. While support from the government has only increased over the years, it still hasn’t helped PPC be more successful. The government have always threatened to name and shame those that fail to pay promptly, but never followed through. Despite many being members of the PPC, which expects businesses to pay 95% of their invoices within 60 days, there are still a number of companies who take more time than this to pay their own invoices. How can you expect one thing but do another? It’s especially important that money is paid on time in our industry; on a construction site there could be 20 different trades that participated, and money could be held back because of anyone else in the project chain.  Until recently, there were no financial penalties for not sticking to the PPC, the only punishment was the risk of having the PPC ‘badge of honour’ taken away. The PPC was intended to be a driver for change but it has struggled to have an impact due to a lack of funding and unrealistic expectations. Given that Carillion were still signed up until the day it collapsed, it clearly wasn’t working.

Last week, the Cabinet Office minister wrote to government suppliers reminding them that a new late payment crackdown is on the way. Unlike other efforts to change the culture, this one actually comes with a business incentive that might work. From September, firms that don’t pay at least 95% of undisputed invoices within 60 days face being barred from public sector contracts worth more than £5m, this will ensure the government only does business with companies who pay their suppliers on time, many of which are small businesses.

Finance is a huge problem for our industry and one I don’t think we’ve taken seriously enough in the past. In everyday life you pay for things immediately, whether that be goods or services, you also wouldn’t expect your boss to ask you for money to ensure you got paid on time or earlier – so why should our industry be any different? We saw the same thing happen with Carillion and look how that turned out!

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.

Stress Awareness Month – mental health in the workplace

By Emily Pearson, Founder & Managing Director, Our Mind’s Work

This month is Stress Awareness Month, need I say it, to increase public awareness about stress. For me, we’re already fairly aware of stress and the more aware we become, the higher the numbers climb for stress-related absence in the workplace.

Like many industries, construction has its pressures. Our industry has and always will be a stressful industry, with workload, client demands and budget concerns being a daily worry. According to statistics from safety barrier manufacturer, A-SAFE, 48% of workers are kept awake as a result of workplace stress with some losing more than 10 hours of sleep a week.

In October last year, the Health and Safety Executive (HSE) released their report ‘Work-related stress depression or anxiety statistics in Great Britain’. The data showed that 2018 saw the highest rates of self-reported work-related stress, anxiety and depression since data began in 2003/04. The rates were quite stable until around 2015 when we started to see them steadily increase. This increase seems to correlate with how much we’ve ramped up awareness of “mental health in the workplace”. The more awareness we have raised has reduced sigma and therefore impacted the confidence to self-report. Add this to an increase in workplace demands and pressures and we are seeing a definite upward trend, which in 2018 accounted for 15.4 million working days lost.

This isn’t news to the HSE, as they have been interested in the impacts of work-related stress since they ran their Stress Priority Programme (SPP) between 2004-2009. The SPP identified a number of industries that had the highest incidence and prevalence of work-related stress and were defined as high priority and subject to proactive inspections. As far as I am aware, I have not seen nor heard of proactive inspections related to work-related stress in high-risk industries. Unsurprisingly, these industries are still, 15 years later, the industries with the highest levels of work-related stress and continue to increase.

Under Section Three of the Management of Health & Safety at Work Regulations 1999 an employer (including managers) are legally responsible for completing a risk assessment and acting on it to reduce work-related stress. The HSE have not been doing enough to actively enforce this, if they were proactively going in to workplaces and inspecting as per their Topic Inspection Pack, we might see some changes.

Morally, preventing a psychological injury caused by the workplace is the right thing to do, but the legal responsibility is there too. The HSE shouldn’t have to enforce this to keep people mentally well, but it looks like this is the route that they will have go down soon. Don’t wait till your company ends up in the court room, act now, the solution is simple.

To hear more about work-place stress and Our Mind’s Work’s solutions for your workplace, contact Emily.Pearson@ourmindswork.com

Managing health and safety with technology and using it right

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

This week we’ve had some of the nicest weather of the year, with the sun finally showing its face. While the weather puts us all in a good mood, I can’t help but immediately think of outdoor workers, working under the sun, and whether they’re managing health and safety correctly.

The use of technology can improve the level of health and safety within the industry, I keep saying there’s no need to fear technology, and it’s true. Digital technology, at the level it is now, can make the industry more productive, cost effective and the big one for me, safer.

A study measured UV exposure among workers across 9 sites and found that many were irresponsibly putting their health at risk because of a desire for sunlight and a tan. The aim of the research was to investigate whether short messages delivered to worker’s smartphones, as well as appropriate organisational support, could prompt them to change their behaviour. The messages, delivered in the summer, encouraged workers to seek shade and use sunblock to avoid sun damage, but they had little or no effect on workers behaviour. Every year there are more than 3,000 cases of skin cancer caused by outdoor work in construction and other industries, and by the sound of it, we can all be doing more to prevent this.

I don’t think that technology is to fault here, we have so much out there to improve health and safety, it’s just a case of workers taking advantage of that. With something like the sun, we all know how dangerous it can be and workers know what they should and shouldn’t be doing. It’s important to just pay attention to how you’re feeling in the heat. If you don’t feel right, hydrate and have a rest in the shade. Maybe this is another example of site culture which needs to change.

We’ve got wearable technology that can detect drowsiness, changes in blood flow, signs of stress and a change in posture so the ability to know your body is struggling before it’s too late and to raise an alarm at the touch of a button has the potential to change the industry going forward. Virtual reality reduces accidents on site by creating simulations of real workplaces and hazards, allowing workers to be more aware of dangerous situations. Drones inspect a job from above or in places where it is dangerous for a human to go, allowing the technology to spot potential hazards and monitor ongoing activity. Is this not just another example of technology working for us.

I’m so proud of the way the industry has (finally) accepted technology and just run with it. We live in a world where gadgets and technology make our lives easier daily and we’re lucky enough to have it available to us in most areas of the industry, so we’d be pretty foolish not to use it, especially where health and safety is concerned.

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.

BREEAM Pre-Approval process – cutting time and cost.

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

The Building Research Establishment (BRE) has introduced a pre-approval process for its Environmental Assessment Method (BREEAM) sustainability certification scheme. The new process enables more than one project of a general specification to be evaluated by BRE Global together, helping clients to achieve the sustainability goals in a more time and cost-effective way.

BREEAM is an international scheme that provides independent third-party certification of the assessment of the sustainability performance of individual buildings, communities and infrastructure projects. Assessment and certification can take place at a number of stages in the built environment life cycle, from design and construction through to operation and refurbishment. A qualified and licensed BREEAM Assessor ensures that it meets the quality and performance standards of the scheme. At the heart of this process are certification bodies – organisations with government approval to certificate products, systems and services.

Assessments carried out in accordance with BREEAM schemes rely on evidence to demonstrate compliance with the relevant requirements. This evidence usually relates to a specific development, but some clients do use a standard specification across multiple builds, which is why the Pre-Approval process has been introduced. The Pre-Approval process shows that BRE Global are both listening to and acting upon the market’s requirements and finding time and cost savings for clients and assessors, whilst maintaining the integrity of the world’s leading sustainability assessment and certification method for buildings.

A number of clients have been involved in a pilot scheme over the last year to evaluate the Pre-Approval process. Their detailed input about their building types, and how they have embedded BREEAM requirements into the design was invaluable in understanding the breadth of differences between general specifications of various building types, and understanding what clients needed from the process to maximise the potential benefits.

Lidl Sverige KB were one of those who contributed to the pilot scheme. They said the scheme facilitated and streamlined their work in projects and gave them the opportunity to manage several similar projects in parallel in a smooth way. The Pre-Approval process is perfect for the project team who can now spend more time on carrying out pre-studies and analysis to find the most suitable and efficient system solutions for the concept store, rather than spending a lot of time on assessor BREEAM report writing at design stage.

I think this is the perfect example of what we can do going forward, in any aspect of the industry. We’re always looking for time and cost-efficient methods of doing things and pilot schemes provide the perfect opportunity to test ideas and receive honest feedback and when they are successful it’s even better.

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

Is adjudication incompatible with insolvency?

By Neil Harrold, Partner, Head of Restructuring and Insolvency, Hay & Kilner and Rebecca Weir, Solicitor, Construction Team, Hay & Kilner

The introduction in the 1990s of adjudication as a quick and effective means of resolving disputes in construction contracts has had a transformative effect.

At the same time, construction companies are no strangers to insolvency processes. But does the ability to adjudicate disputes prevent one of the parties entering into administration, liquidation or bankruptcy?

Earlier this year the Court of Appeal heard two cases which concerned the ability of a company to refer a dispute to adjudication whilst insolvent, although in one the form of insolvency concerned was liquidation, while the other concerned a company in a company voluntary arrangement (CVA).

It’s important to understand the difference between a company that is in liquidation and one which has an approved CVA in place. Whilst liquidation pretty much means the end for a company, a CVA is a procedure under which a company can escape either administration or liquidation by entering into a legally binding arrangement with its creditors.

In the first case, the judge had the issue of deciding what the Insolvency Rules meant for the contractor’s right to adjudicate.

Under both the Construction Act 1996 and the Scheme for Construction Contracts 1998, a party can commence an adjudication “at any time”. It was held that a company in liquidation cannot refer a dispute to adjudication when one party is in liquidation because the dispute is no longer a construction contract dispute.

Accordingly, the judge granted an injunction to restrain the adjudication – and it got everyone talking.

On appeal, the judge held that while the underlying claim was not extinguished upon liquidation with the consequence that, as a matter of jurisdiction, it continued to exist and was capable of being referred to adjudication. He concluded that adjudicators do have jurisdiction to hear disputes referred by insolvent companies. In doing so, he overturned the original reasoning. The judge confirmed however that adjudication would be a futile exercise and the court would ordinarily grant an injunction stopping the adjudication.

In contrast, in the appeal in the second case, the judge granted summary judgement and refused a stay of execution to an insolvent contractor in a CVA.

In other words, a company in a CVA might still be able to refer matters to adjudication. The judge said an adjudication is likely to be a practical benefit under a CVA.

Unlike an insolvent liquidation where the purpose is to secure the interest of creditors and limit damage, the goal of a CVA is to ensure cash flow and help a company recover.

For further information, visit www.hay-kilner.co.uk or call 0191 232 8345.

Building After Brexit – what can the industry be doing now?

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

With the EU exit deadline looming at the end of this month, the industry has devised an emergency plan to help prepare for whatever is to come.

‘Building After Brexit: An Action Plan for Industry’ identifies the need for construction to adopt a twin-track strategy: develop a home-grown workforce to reduce reliance on immigrant labour; and keep lobbying government for construction industry exemptions.

Recommendations include:

  • Attract talent by raising apprenticeship starts and completions, creating pathways into construction for under-represented groups including women, those with disabilities, those from an ethnic minority group and the LGBT community as well as providing better work experience opportunities.
  • Retain the workforce by supporting older workers to stay in the industry, upskilling the existing workforce and offering more support to tackle major issues affecting the industry, such as mental health.
  • Be productive by developing a Future Skills Strategy to identify the skills required to modernise the industry, drive digitalisation forward and boost investment in modern methods of construction.

The recommendations are what we already know we need to do, it’s just a case of seeing it through. The single biggest issue has been the same for a number of years now, the skills shortage. If we’re going to address the skills gap post-Brexit, the industry needs to step up and expand their training initiatives. We must simply do more to attract new talent, get better at retaining and upskilling the current workforce and embrace digital skills to be more productive.

The plan has been put together by the Civil Engineering Contractors Association (CECA), the Construction Products Association, the Federation of Master Builders, the Home Builders Federation and the Construction Industry Training Board (CITB), under the leadership of the Construction Leadership Council.

The latest forecast has revealed over 168,000 new jobs will be created over the next five years and with a likely post-Brexit reduction to the availability of foreign workers, it’s important that we act now to avoid widening the skills gaps. We need to work together and work with government to target these gaps because we really can’t afford to lose skilled workers. With access to a huge chunk of the workforce potentially about to be lost, we’ve got to work smarter. You really can’t fault the industry for its efforts in driving digitalisation and modern methods of construction, but we need to focus on delivering a Future Skills Strategy; going forward it’s skills we’re going to need.

Hopefully this time next month we’ll know more but one thing’s for sure, the journey towards Brexit certainly hasn’t been an easy one and sadly I don’t think it’s anywhere near over yet.

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

Blazing a trail – #NAW19

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

As I write this, businesses up and down the country will be preparing to celebrate National Apprenticeship Week (4-8 March) – a week for raising awareness and celebrating apprenticeships and how rewarding they can be.

For such a long time, apprenticeships carried a very unjust stigma as an easy alternative to the academic route. But apprenticeships give young people hands-on experience and the opportunity to gain qualifications whilst learning skills and gaining industry knowledge – a great combination of on- and off-site learning and experience.

Last month, the government launched their ‘Fire It Up’ campaign to promote the benefits of apprenticeships to young people, parents and employers through a series of adverts on national TV and social media, featuring real-life apprentices. I’ve seen the advert and I love the idea behind it. Thousands of businesses are already offering world-class apprenticeship programmes, but we do need more firms to come on board. The aim of this campaign is to make employers aware of the changes to apprenticeship and the benefits to their organisation. The campaigns new website will provide advice and guidance, as well as access to a wide variety of apprenticeships options for all ages and backgrounds. The real-life apprentice stars are of all ages and backgrounds. There’s Sarah, who is retraining as a nursing assistant in her 50s, and then there is 20-year-old Megan who is training to be a building design engineer at construction firm, Troup Bywaters + Anders. The case studies prove just how many doors apprenticeships can open for you, no matter who you are or where you come from.

There are still too many people who are sceptical about apprenticeships and it’s down to all of us to change their minds and make sure they know everything that we have to offer. That’s why I love campaigns and national weeks like this, where the whole industry pulls together to celebrate apprentices and shows the benefits that apprenticeships can offer both employers and young people. 96% of employers with apprentices say they have experienced at least one benefit from taking on apprentices, and most can count at least eight benefits – for me they really do sell themselves.

Next week, National Apprenticeship Week will see industry stakeholders and employers celebrate apprenticeships and their positive impact on organisations across England. This year’s theme ‘Blaze a Trail’ will feature throughout the week to highlight the benefits of apprenticeships to employers, individuals, local communities and the economy. Blazing a trail is exactly what being an apprentice is all about. Last year, was a record-breaking week, with 780 events across the country, over 33,000 people engaging with our 10,000 talks movement and #NAW2018 trending on Twitter ahead of the Oscars – let’s aim for the same, if not better, this year.

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.

Balance for Better – International Womens Day

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

There is a clear move towards embracing inclusion and demolishing stereotypes in the industry. We need people from different personal and professional backgrounds, bringing new and innovative ideas. With the skills shortage at a high, we’re in no position to be looking at anything other than level of skill and potential when recruiting workers.

According to the UK Industry Performance Report, 2017 by Glenigan, only 12% of the industry’s workforce is female, compared to 47% for all sectors nationally. Compared to national averages, women, people with disabilities, the BAME community and those under 24 are under-represented in the construction industry.

To act on this information and their own research, CEOs from 32 of the country’s leading energy and utilities employers have signed up to an industry-wide commitment to attract more diverse and inclusive talent. Amey, Balfour Beatty, Clancy Docwra, Keltbray, Kier and Morrison Utilities and many more have committed to proactively change these statistics and promote their businesses to under-represented talent. Through its work, the Energy & Utilities Skills Partnership and its CEOs will highlight the great work already being done by the sector as well as continuing to drive change through its ongoing commitment to inclusive attraction, recruitment, and development of its workforce. The new agreement is underpinned by five principles that commit to working collaboratively and sharing best practice, while creating an inclusive culture that enables firms to attract, recruit and develop people in a way where progress can be measured and transparent.

Employing around 566,000 people across the UK, the utilities sector will need over 220,000 new recruits to fill its expected skills gap by 2027. The future is exciting – and we are the people privileged enough to build it. I think we can all agree that the best way to do that is with a gender-balanced workforce.

CENE are holding an International Women’s Day, Better for Balance event on Thursday 7 March – a follow up to last year’s Press for Progress event. Join us for an interactive morning, hearing from Eliane Algaard, Northumbrian Water, Owen Goodhead and Sarah Sidey, Ranstad CPE, Kieran Thompson, Cundall and Lily Kitchen from Network Rail who are driving change in the industry. We will look at how you can initiate and support change, meet other people with the same aspirations and hear from organisations already working on their diversity and inclusion strategies. Everyone has a part to play in creating change, so we need men and women to join us to and find out what you can do to help.

If you would like to register for this event, please contact Grace Collinson on 0191 500 7880 or grace@cene.org.uk

Bringing knowledge into the 21st century

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

A survey carried out by the UK’s Construction Knowledge Task Group (CKTG) has found that a third of construction practitioners just don’t have easy access to the knowledge they need. The information is there, they just don’t know how or where to access it. Our industry is knowledge-based and without it, the industry is less productive, less innovative and more likely to make mistakes.

Feedback from 299 practitioners from every part of the industry found almost two fifths did not have easy access to all the knowledge they need to do their job – quite a scary statistic considering how much responsibility our industry has. Practitioners also admitted they use less-trusted knowledge sources more frequently than more-trusted knowledge sources, with web searches and free online resources accounting for almost half of all the knowledge accessed. Less specific, traditional ‘learning’ is not as popular, which does make sense when you consider the way the industry is going. We’re moving away from traditional methods of working, so it’s only right that the way we learn and access information changes too. The industry has embraced the internet, we’re accepting new technologies and BIM is second-nature to many of us now. Data and information are finally there, we just need to make sure that knowledge is just as easily accessible. Ann Bentley, Global Board Director at Rider Levett Bucknall, and Member of the Construction Leadership Council said: “we need to bring knowledge into the 21st century and take a more collaborative and systematic approach to how it is prepared and shared” – and I couldn’t agree more.

The survey, which ran at the end of 2018, was intended to help the CKTG steer its work, improving the way industry knowledge is prepared, accessed and applied. Its members include representatives from right across the industry. They met last month and established three workstreams that will be pursued going forward:

  • How should construction knowledge be ‘tagged’ so that it is easier to identify specific types required by practitioners?
  • Could new search tools be developed to help practitioners find the knowledge they need when they need it?
  • Is it possible to co-ordinate subscriptions, sign up forms, memberships and pay walls and to make them more flexible so that it is easier to access multiple knowledge sources through one search query?

In simple terms, we just need to work out how to make the information more accessible and most importantly, make sure people know how and where to access it and it’s up to The Task Group to make sure this happens going forward. I’m keen to see how things change in the future. They seem to know what the problem is, and I trust that they know what needs to be done to solve it – only time will tell.

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.

Why is prompt payment still an issue?

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

Prompt payment, or the lack of it, is such a big issue in our industry and the collapse of Carillion last year certainly brought it back into the spotlight, for all the wrong reasons. Not only does it cause economic and social damage, but it has really tarnished the reputation of the industry, something we work so hard to build, but I can’t help but think we’re really not helping ourselves.

Tier one contractors are still paying their suppliers much later than agreed and withholding retention monies rightfully owed to the suppliers. It’s especially important that money is paid on time in our industry; on a construction site there could be 20 different trades that participated, and money could be held back because of anyone else in the project chain.

The Prompt Payment Code Compliance Board is a voluntary board that monitors late payments and enforces the Prompt Payment Code, which was introduced in 2008 in an effort by the department for Business, Energy and Industrial Strategy (BEIS) to establish a set of voluntary principles for firms to ensure their suppliers are paid fairly and on time. The PPC was intended to be a driver for change but it has struggled to have an impact due to a lack of funding and unrealistic expectations – something which needs to be managed to enable it to do its job. Carillion was one of the signatories of the PPC and therefore could have been subject to investigation, but nobody told them about Carillion’s payment record until after it collapsed, and it was too late.

In an ideal world, late payment would no longer be a thing, but while we work at changing how a lot of companies operate, there are things we can be doing to help. The Board have received very few challenges against poor payers in the last few years and we know from statistics that that’s not because there aren’t any cases. In 2016 it received 16 challenges, 25 in 2017 and 21 last year so there is clearly a reluctance in people putting forward challenges and that needs to change.  As we know, small businesses suffer most, with most of them being used as the bank of bigger companies and its usually SMEs that are scared to put forward challenges. Last year, small businesses were collectively owed £14bn in late payments. That’s across all industries, but I bet our industry contributed a lot towards it.

In everyday life you pay for things immediately, whether that be goods or services, and you wouldn’t dream of asking to delay the payment or paying less than what was due, so why should our industry be any different?

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