A new procurement era ahead?

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

Unless you’ve been holidaying in some far-flung place in the past few weeks, you’ll know that the vacancy for the North of Tyne Mayor has been filled and Jamie Driscoll is now in office.  A key part of the mayor’s manifesto is to enable small businesses to win public sector work.

That very subject was the catalyst for the formation of Construction Alliance North East (CAN) in 2016. Since then, CAN has garnered support from many local MPs and industry bodies such as the Construction Industry Council and in 2018 successfully supported NEPO to develop its £300m Building Construction Works framework which resulted in a number of local companies being appointed.

The new mayor hopes to improve opportunities for small businesses by ‘creating a procurement framework to level the playing field for local businesses and keep those profits here. As well as encourage local public services such as council, hospital and universities to join this framework.’ He will also be building on the pioneering approach of Preston by working with employers to ensure that they prioritise local small businesses and local employment when procuring supplies and services. Since changing its procurement approach back in 2013, Preston has increased public sector spend in the city from 5% to an impressive 18%, returning in excess of £275m to the local economy and reducing unemployment from 6.5% to 3.5%. CAN firmly believes that by adopting a considered approach to public sector procurement, which ensures that tendering opportunities are structured in such a way to include rather than preclude regional SMEs, there is no reason why the North East cannot benefit in the same way that areas such as Preston have.

As the leading voice for SME contractors in the region, CAN is very much looking forward to working with the mayor’s office to provide guidance and support to help shape the procurement framework at such an exciting time for the region. However, whether using new or existing frameworks, CAN feels strongly that the following recommendations should be implemented.  Frameworks should recognise the specialisms and expertise of SME’s and should be based around a clear valued work bank with a commitment from clients to deliver work via the framework.  The number of companies on the framework should be proportionate to the framework value and the time and cost of the selection process should be reduced substantially.  Also, frameworks must encourage the use of the Social Value Act and promote better monitoring of contract performance ensuring fair treatment of all suppliers.

CAN is the main sponsor for Constructing Excellence North East’s ‘Procuring for Value’ event taking place on 13 June at The Grand Gosforth Park Hotel.  The event will look at what the Procuring for Value workstream is, how it will operate and the opportunities it will create for the industry and the region.

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 the next 10 years are important for climate change

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

We work in one of the biggest industries in the world, and because of what we do, we have the most potential to make a difference on protecting the environment. One of the biggest differences that can be made lies within our industry, in house-building.

The Climate Change Act, the first legally binding framework for tackling climate change, was introduced back in 2008. It sets legally binding targets, creates new powers, changes the institutional framework, establishes systems to ensure accountability and addresses resilience to climate change. It is most notably known for the commitment to cut emissions of greenhouse gasses by at least 34% by 2020 and by 80% by 2050 compared with 1990 levels – something we’ve all been slowly working towards.

Last week, the Committee on Climate Change responded to a government request to reassess the UK’s long-term emissions targets. The published report suggested the UK can end its contribution to global warming by setting a target to reduce greenhouse gas emissions to zero by 2050, which will require outstanding levels of energy efficiency alongside zero carbon electricity and heat supplies. The target referred to as ‘net zero’ would be met by some sources of emissions being offset by removal of CO2 from the atmosphere.

The report suggests that foundations are in place to implement the policy throughout the UK. A net-zero target will deliver on the commitment that the UK made by signing the Paris Agreement. It is achievable with known technologies within the expected economic cost that Parliament accepted when it legislated the existing 2050 target for an 80% reduction from 1990. However, this is only possible if credible, well designed policies are ramped up significantly. I feel like this is a positive step forward for climate change and it shows that people are finally taking it seriously. We all need to take responsibility in our own lives to tackle climate change, especially in our efforts to achieving net zero emissions by 2050 and our industry has a big role to play in that.

The government welcomed the report but has yet to accept the recommendations. We need to make the changes and start delivering them as soon as possible, the sooner the better if you ask me. According to reports, the industry has just over 10 years to make sure all new buildings are net zero carbon by 2030 – given how quick the last 10 years of the Climate Change Act has gone it will be here before we know it.

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

What do the under 30’s think of the industry?

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

This week, Building’s survey of the perceptions of young people found that those working and studying in the industry are optimistic about their careers and happy in their work.

For so long we’ve been trying to change young people’s perception of the industry and encourage more people to consider a career in construction, so it’s great to hear that those in the industry enjoy what they’re doing.

The survey asked almost 500 young people about their perceptions of the sector and found more than 90% were happy in their jobs and over two-thirds felt their careers were satisfying, fulfilling and that a career in the industry is full of variety, exciting and enjoyable. Construction is about changing and shaping the world around us for the better – what’s more varied than that?

However, as with most things it wasn’t all positive news. Many felt that pay and working conditions did not favour young people, with 16% saying that low pay and long hours were the biggest things they would improve about construction – which is fair enough. Thankfully, the rise of the gig economy and zero-hour contracts hasn’t impacted their ambition and position within the industry, with 89% aspiring to a senior position and 94% still feeling secure in their job.

As a traditionally male-dominated industry, we’ve been struggling for a while now to improve our image and gender diversity. Gender pay gap reporting practices and a number of schemes have highlighted the problem but also resulted in more companies working to address the imbalance – and this isn’t going unnoticed by the younger generation. Nearly seven in 10 respondents believe construction is actively seeking to increase the number of women entering the industry.

When asked what one thing they would change about the industry, their priorities in order were:

  • Better pay and shorter working hours
  • Gender quality and an end to sexism
  • Construction to take its role in global sustainability and climate change seriously
  • The industry to speed up its modernisation process
  • To be respected, listened to and recognised for the work they do

So, is the industry actually listening to what its new generation want? One respondent said they feel that those with more experience look down on younger people and don’t respect them as much as others. Here at Constructing Excellence in the North East, we certainly respect the younger generation. Generation4Change is our group established to be the voice of the younger generation. Part of the Constructing Excellence movement it comprises of young professionals who are passionate about making a difference in the sector. Each year, we host the G4C North East Awards in celebration of the region’s emerging talent and it’s one of my favourite events of the year. I’m really looking forward to celebrating with them all this Friday.

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 we must take care of iconic buildings

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

The emotional response to the devastating fire at the Notre-Dame de Paris cathedral shows that such iconic buildings really do mean a lot to us, not just to our industry but to the world. Whether conscious or otherwise, the built environment and infrastructure influences how people perceive a place, its economy and its people.

The construction of Notre Dame was completed in 1345. It’s a masterpiece of medieval architecture, a building that, for all the advances in materials and building techniques over the years, still takes your breath away. There are a number of rare buildings around the world that are particularly important to us; they are the places people gather and the heart of communities. Notre Dame is one of those. With an estimated 13 million visitors a year, whether that be Catholics attending mass or tourists hoping to see Quasimodo, the cathedral is important to many people around the world.

Historical buildings are a reminder of an area’s history, usually made of marble, old brick or heart pine, the aesthetics are just beautiful. That said, Notre Dame’s aging wooden foundation has been topic of concern for some time and was undergoing a £5+ million renovation project at the time of the fire. The entire frame of the 850-year-old building is made from timber, with an estimated 1,300 trees used for the construction of its beams. There is always going to be a risk of fire with timber structures.

Within days of the fire they announced it would be restored and there would be an architecture contest to rebuild the spire. I agree, rebuilding the cathedral is the right thing to do but I also agree with the French Prime Minister, who said the rebuilt cathedral needs to reflect the techniques and challenges of our times. The goal of restoration is not always to replicate the past. Modern tastes and technologies may influence how damaged structures are reimagined. Notre Dame is a building that has been restored many times over the years, it wasn’t a perfectly preserved building. It’s suffered wars, destruction and repair. I don’t think we need the new build to be a replica with no trace of the fire, the fire is now part of its history and I don’t think that should be forgotten.

While the cause of the fire is still unknown, we must remember complex, historic buildings, especially those undergoing restoration are at risk from fire. Within hours of the Notre Dame fire, people were quick to point out the dangerous state of the Palace of Westminster, which has been crying out for restoration for over a decade. If there is one thing to take from this tragedy, it’s to not take such iconic buildings for granted, to look after them and make every effort to ensure they are preserved for years to come.

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.

Flexible working and working mums

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

Construction doesn’t have the best reputation when it comes to women. Last year the results of the gender pay gap report showed that construction has the biggest gender pay gap of any UK industry, at 25%. We have known of the under-representation of women in the industry for many years, so it was nothing new, but it seemed to kick start some actions around encouraging and retaining women in the industry.

Working hours that are not compatible with childcare, combined with a culture of presenteeism, can make the industry seem scary for female employees, I get that. Thankfully, a lot of firms are working towards changing that. Staff surveys at Morgan Sindall revealed that salary comes third to flexible working and personal development, regardless of age or gender. In any industry, the desire is to have a healthy, productive workforce and construction is no different. We all want to work somewhere where we feel comfortable, safe and valued, and when we do, that’s where we’ll thrive. There’s no reason why you can’t be a parent and have a successful career in construction. If people can fulfil their responsibilities with flexible working, then why not give it a go? Something as simple as arranging your working day around the school day isn’t going to stop you having a successful day at work. If anything, I think it might make you more productive, by taking the pressure of childcare or missing out on important milestones off your mind you’ll be able to concentrate on the job in hand.

I understand there are still some circumstances where flexible working might not work. There are sometimes where you still need be on site before 8am which is difficult for a working parent, but why not involve the graduates – those who want to learn, want the experience and are more than happy to help out. Have someone there to help you set up, lock up or carry out tasks that cannot be carried out during the typical 9-5. You’re getting the job done, it’s less stress for you and a keen younger worker is getting invaluable experience working with responsibility.

I love to see new ideas that make working women’s life easier which is why I was thrilled to see that you can now buy maternity high-vis clothing. Leo Workwear have released the first stocked maternity garments conforming to high visibility standard ISO 20471. They make life easier, safer and more comfortable for pregnant women at work and it could be the deciding factor in whether a woman stays in the industry or leaves when deciding to start a family. That teamed up with the news that several big contractors are now promoting flexible working to encourage working mums to stay or return to the industry makes me very happy – after all, the industry definitely needs women.

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 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.