Construction Industry Training Board (CITB) – new levy

• The consultation by the Construction Industry Training Board (CITB) on its proposed levy for the period from 2022 to 2025 has now closed. The CITB is finalising its levy proposals before opening a period of consensus from 4 June 2021 to 15 August 2021 during which construction businesses will be able to comment. The CITB levy applies to all employers "engaged wholly or mainly in construction industry activities" and is used by the CITB to ensure that construction employers have the skilled workforce they need. Levy rates have been temporarily reduced to reflect financial hardship caused by the COVID-19 pandemic.

Construction Industry Scheme tax anti-abuse regulations made

• Legislative changes introduced on 15 March 2021 to address abuse of the Construction Industry Scheme (CIS) will impact those who: work in construction; operate within the CIS; or represent construction businesses. The CIS is applicable when construction expenditure of the particular entity exceeds £3 million within the previous 12 months. The changes include:
  • in relation to set-off claims, HMRC will now have the power to amend CIS deduction amounts claimed by sub-contractors on their Real Time Information Employer Payment Summary returns, with the intention being that errors and omissions can be corrected or claims removed completely where sufficient evidence is not provided;
  • where a sub-contractor directly incurs the cost of materials purchased to fulfil a construction contract, that cost is not subject to deduction under the CIS; 
  • who falls within the category of "deemed contractors"; and
  • an expansion of the liability for penalties where persons or individuals are in a position to exert influence or control over those making an application and the individual or company uses that position to encourage the provision of false information or the making of a false statement.

New Small Business Commissioner

• Liz Barclay [has been] named as Small Business Commissioner to lead crackdown on late payments to small businesses. This role was established in 2016 to help small businesses get paid on time and is more important than ever now in the midst of the COVID-19 pandemic. Last year, the government consulted on new powers for the Commissioner, including the power to order payments, levy fines and open investigations based on third-party information. The responses to that consultation and further proposals made are awaited. 

PI insurance

• The Construction Leadership Council (CLC) has conducted a survey to track the impact of the "growing crisis" in the professional indemnity (PI) insurance market. The CLC referenced reports of sharp increases in PI insurance premiums, "stricter curbs on the levels of cover", large, sometimes four-fold increases in policy costs and others unable to secure cover. The CLC will publish the results and use them to inform their ongoing work in supporting the construction sector.

RICS – EWS FAQs and mortgage valuation guidance

• The Royal Institute of Chartered Surveyors (RICS) published a set of frequently asked questions (FAQs) on cladding external wall systems (EWS) on 8 March 2021. The FAQs give an explanation of an EWS and how and when to use the EWS1 Form which: is valid for five years; certifies that the EWS has been assessed by a qualified body; is designed to be used for residential properties such as blocks of flats; and is applicable to an entire building so may be required on mixed-use buildings.
• RICS also updated its guidance note on Valuation of properties in multi-storey, multi-occupancy residential buildings with cladding on 8 March 2021. The note "is intended to support valuers undertaking valuations for secured lending purposes on domestic residential blocks of flats in the UK" and includes criteria as to when a particular building needs an EWS1. The guidance came into force on 5 April 2021.  As well as the EWS1 Consultation summary and responses which is available here, RICS has also issued a supplementary information paper "to increase surveyor’s knowledge of typical external wall cladding systems for building types that may be considered in the ‘External Wall Fire Review’ process".

New construction products regulator

• The government has launched a modern slavery statement registry "to share the positive steps taken to tackle and prevent modern slavery" (11 March 2021). Any organisation who prepares a slavery statement can, voluntarily, add their statement to the new registry for slavery statements. To lead by example, the government submitted its own UK Government Modern Slavery Statement summary 2020 on the day of launch. Under Section 54 of the Modern Slavery Act 2015 (MSA), large businesses are required to produce a statement each year either setting out what they have done to avoid modern slavery risks in their business and supply chains, or that they have taken no such steps. Adding the statement to the registry is "strongly encouraged" and while currently voluntarily, is likely to be made mandatory "as soon as parliamentary time allows".
  Home Office guidance and details on how to publish an annual modern slavery statement can be found here. 

CIOB Planning Protocol 2021

• The Chartered Institute of Building (CIOB) has released a new CIOB Planning Protocol 2021 (CIOB PP21) tool to enable construction parties to "see that the construction programme they maintain is precise and of high quality at every stage". It aims to help users understand the requirements of an effective programme. It acts as a planning guideline which, if followed, allows the thresholds (stress tests) to be met. CIOB PP21 is free, adaptable and can be incorporated into standard form and bespoke construction agreements alike for use on a wide range of projects. Download here.  

Wales

• The Welsh Government has published Future Wales – The National Plan 2040 (24 February 2021) which will influence "all levels of the planning system in Wales and will help to shape Strategic and Local Development Plans prepared by councils and national park authorities. The document sets out the Welsh government's 20-year plan for shaping the future growth and development of Wales.

Limited availability of construction products

• The Construction Products Association (CPA) and the Builders Merchants Federation published a joint statement on 8 March 2021 addressing the limited availability of a number of construction products, including timber, steel, PIR/PUR insulation and roofing, and container imports. The statement notes that there are a number of contributing factors, as well as the shortages and price increases caused by COVID-19.

Government response to fire safety consultation

• The government has published its response to the public consultation on fire safety (17 March 2021). Its proposals include strengthening the Regulatory Reform (Fire Safety) Order 2005 (SI 2005/1541) (RRO 2005) through the introduction of the Building Safety Bill. The bill includes measures such as: unlimited fines for obstructing fire inspectors or breaching fire safety regulations; changing the way building control bodies and fire rescue services interact; and implementing the Grenfell Tower Inquiry Phase 1 Report recommendations to place new requirements on building owners or managers of multi-occupied residential buildings. The bill also affects the design and construction of buildings with new roles and responsibilities through the construction process.

Learning from Grenfell

• The Welsh government published the report Fire and Rescue Services in Wales: Learning from Grenfell, prepared by the Fire and Rescue Services (FRS), on 22 February 2021. The report focuses on learning from Grenfell Tower Inquiry recommendations and identifies how the FRS has implemented the applicable recommendations in the Grenfell Tower Inquiry (GTI) Phase 1 Report.

CDM Regulations 2015 – Principal Designer

• The Health and Safety Executive (HSE) has carried out a survey (commissioned from MPW R&R) on the role of the Principal Designer under the Construction (Design and Management) Regulations 2015 (SI 2015/51) (CDM 2015). The survey was intended to broaden understanding of how the role is working in practice and was open to all who have worked on construction projects where a Principal Designer was appointed. The Principal Designer role has come under scrutiny since the Grenfell tragedy. The Building Safety Bill also proposes a regime for higher-risk buildings that aligns with the Principal Designer role. The survey closed on 5 March 2021. 

Affordable housing

• On 24 March 2021, the House of Lords debated the Coming Home report by the Archbishops' Commission on Housing, Church and Community which focused on "building better communities and more truly affordable homes, not just houses". The Lords' general debate addressed current issues and concerns to draw the government's attention to the case for setting out a long-term housing strategy.            

Right and help to buy

• The Ministry of Housing, Communities & Local Government (MHCLG) has published the outcome of its consultation into the Use of receipts from Right to Buy sales. The proposed measures will give local authorities more freedom when allocating the funds obtained from selling homes through the Right to Buy schemes which will help authorities to develop and build more homes where needed in their communities. (See also the press release: Councils given power to build more homes for first-time buyers and for social rent, 20 March 2021). 
  • Homes England updated its The Help to Buy: Equity Loan brand and written guidelines (17 March 2021) which include the Equity Loan logos and brand guidelines for government organisations.

Scottish measures

• The Scottish Government has announced plans to deliver 100,000 affordable homes by 2032 aiming to have at least 70% of these used for social rent (see the press release of 15 March 2021). This is a part of Scotland's Housing to 2040 vision for "everyone to have a safe, good quality and affordable home that meets their needs in the place they want to be". 
• On 15 March 2021, the Scottish Government published a report summarising the responses to a public consultation on Housing to 2040. (See the press release.) Housing to 2040 focused on creating "A Well-Functioning Housing System" and in particular on: finding the right home; affording a home; making the best use of our homes; investing; fairness; and opportunities in rural and island communities. The Government's response highlights that "housing policy has a vital role to play in achieving many of Scotland's aspirations, including eradicating child poverty and homelessness, ending fuel poverty, tackling climate change and promoting inclusive growth". In general, respondents supported the Government's draft and vision and praised the initiative for being ambitious and comprehensive. 
• The Scottish Housing Market Review 2021, published on 23 March 2021, covers the period October to December 2020 (Quarter 4) and collates a range of statistics on house prices, housing market activity, cost and availability of finance and repossessions. The statistics revealed a continued recovery in Scottish residential property sales in Q4 in Scotland (although 2020 sales overall fell by 17.3%); an annual increase of new homes by 3% as compared to the previous year; and a recovery in the supply of affordable housing since Quarter 2.

International focus

FIDIC addresses sustainability issues

• The International Federation of Consulting Engineers (FIDIC) launched a series of "State of the World" reports in which it intends to highlight significant global challenges and issues and how they can be tackled. The first webinar in February 2021 considered "the trillion-dollar investment challenge facing the global infrastructure sector". The next, scheduled for August 2021, will consider whether, as the world marches towards achieving the 2030 UN Sustainable Development Goals and net zero, we should simply adapt our current way of living or think about a new way of life.

Build Back Better plan for growth

• HM Treasury has published its Build Back Better plan for growth which "sets out the government's plans to support growth through significant investment in infrastructure, skills and innovation, and to pursue growth that levels up every part of the UK, enables the transition to net zero, and supports our vision for Global Britain". 
• Set against the backdrop of issues arising from the COVID-19 pandemic, the paper highlights: policy relating to Build Back Better (with a proposed and unprecedented economic package to support people, businesses and the economy), the economic context (the effect of the pandemic), infrastructure (a commitment to transforming the UK's infrastructure and increased investment as a central part of economic recovery); skills (the vital role of education and skills training in sustaining productivity growth and international competitiveness); innovation (to drive economic growth and improve living standards); levelling up (improving everyday life for people in areas which feel left behind); net zero (UK investment in and implementation of policies to meet targets); Global Britain (including taking advantage of the opportunities that come with our new status as a fully sovereign trading nation); and the way ahead (using this plan's ambitious objectives "to capitalise on the UK's dynamic and open economy, tackle long-term problems and drive new growth").
• The paper explains how the UK will achieve its net zero target by 2050, summarising what the government is doing with reference, for example, to the government's Ten Point Plan for a green industrial revolution. 

Low carbon heat and the Green Gas Levy

• BEIS consulted on Future support for low carbon heat in 2020 in which it set out proposals for a Green Gas Support Scheme (GGSS) (which would increase the proportion of green gas in the grid through support for biomethane injection) and a Clean Heat Grant (to provide support for heat pumps and, in certain circumstances, biomass through an upfront capital grant to help address the barrier of upfront cost). The GGSS was to be funded by a Green Gas Levy (GGL) applied to all GB licensed fossil fuel gas suppliers (on which a consultation ran in September 2020: Consultation on a Green Gas Levy). 
• The government's response to these consultations was published on 17 March 2021 and includes a summary of stakeholder responses. (See Future Support for Low Carbon Heat & The Green Gas Levy Government response to consultations.) The government intends to proceed with the GGSS and GGL. In relation to the GGSS, the response outlines the government decision on a 15-year tariff lifetime, a three-tier structure, the scheme's sustainability criteria and a 50% minimum percentage threshold for waste and residue feedstocks. In relation to the GGL design, the response sets out its scope, methodology for the per meter point design, frequency of levy payments, collection of meter point data and the notice period that suppliers will be given ahead of the first levy collection.
• The government intends to publish a separate response on the Clean Heat Grant later in 2021.

Industrial Decarbonisation Strategy

• BEIS published the UK's net zero Industrial Decarbonisation Strategy policy paper on 17 March 2021 (the UK is the world's first major economy to present such a strategy), setting out "how industry can decarbonise in line with net zero while remaining competitive without pushing emissions abroad". The strategy underlines the need for transformation of industry sectors' manufacturing processes as being key to the UK meeting its emissions targets. The paper references the construction sector as being one of the biggest purchasers of industrial products (such as steel and concrete) and provides examples such as a case study on industry initiatives to reduce emissions and the "new tools aimed at influencing procurement decisions away from lowest cost such as the Construction Leadership Council's Procurement for Value work". The strategy builds on the 10 Point Plan for a green industrial revolution.

Net zero strategy at a local level

• The HCLGC launched Local government and the path to net zero: new inquiry (16 March 2021) to examine the UK's strategy for meeting the 2050 "net zero" target at a local level. This will assist local governments who are responsible for a range of areas that could also play a key role in the UK's efforts to reach the net zero target, including local transport, recycling and waste disposal. The new inquiry will examine: proposals for establishing planning guidelines and building regulations to reduce the UK's household emissions; the current emphasis on heat pumps as a long-term solution to increase energy; whether other options may prove more viable; and what other, non-domestic, measures local government can take to contribute to the UK's emissions reduction targets. The inquiry closes on 30 April 2021.

Scotland's Climate Change Plan

• Ahead of COP26 and following the Scottish Government's publication of its updated draft Climate Change Plan (laid before Parliament on 16 December 2020), four Holyrood Committees have welcomed the level of ambition in the Plan but raised concerns including that Urgent action is needed if Scotland's ambitious climate change targets are to be met (4 March 2021). The Plan outlines the proposals to meet Scotland's climate change targets of a 75% reduction in greenhouse gas emissions by 2030 and achieving net zero by 2045. The committee reports include:
  • the Environmental, Climate Change and Land Reform Committee's report highlighted issues in respect of emissions abatement that need to be corrected, and that the Plan needs to take a more integrated approach with respect to cutting emissions across agriculture and wider land use;
  • the Rural Economy and Connectivity Committee's report addressed transport issues and calls for investigation into how the target of 24,000 hectares of new forestry per year might be realised;
  • the Local Government and Communities Committee's report highlighted the need for the adoption of a flexible approach to funding local authorities so that they are equipped to meet the decarbonisation needs of their local areas; and
  • the Economy, Energy and Fair Work Committee's report recommended publication of a road map on how the 2032 target for gross emissions will be met by Negative Emissions Technologies.

Procurement in an emergency: PPN 01/21

• The Cabinet office has published Procurement Policy Note 01/21: Procurement in an Emergency which "reminds contracting authorities of the options available to them when undertaking procurements in an emergency" (and builds on the guidance given in PPN 01/20: Responding to COVID). The potential risks of procuring in an emergency include: poor value for money such as abnormally high pricing; unequal treatment of suppliers in the procurement process; poor practice due to procuring at speed, such as retrospective contract awards or retrospective due diligence checks; and lack of documentation around key procurement decisions including how conflicts of interest are identified and managed.
• Some of these risks are unavoidable, making it important that the contracting authority keeps proper records and documentation to justify the decisions made in case they are challenged in the future. Where goods and services of works are needed urgently and to be procured under the Public Contracts Regulations 2015 (the PCR), the following options are available to the contracting authority: call off from an existing framework agreement or dynamic purchasing system; call for competition using a standard procedure with accelerated timescales; extending or modifying a contract during its term; direct award due to absence of competition or protection of exclusive rights; or direct award due to extreme urgency under regulation 32(2)(c) (direct awards should be a last resort).
• Even if it is an emergency, "it is important that the contracting authority still achieve value for money and use good commercial judgement, including when issuing a direct award" – and should manage these issues by weighing them against the risk of not being able to secure the required goods or services.
• The Welsh government has adopted this PPN and encouraged its public authorities to follow suit. (See here)

CLC response to Green Paper

• The CLC has responded to the Green Paper on transforming public procurement, expressing support for the proposed legal principles of public procurement and noting that they partly mirror the existing regulations (see CLC Responds to the Transforming Public Procurement Green Paper). In the response, the CLC: welcomes the inclusion of value for money and the public good as specific principles; hopes the Green Paper will result in acknowledgement that achieving public good is essential in delivering value for money; agrees with the establishment of a new public procurement unit to oversee public procurement, intervene if required and hold public bodies to a higher standard; recommends this unit be comprised of representatives from across the construction industry to ensure impartial expert knowledge; and highlights the importance of raising awareness after the changes are made, especially with the new open and flexible procedure being proposed.

PPN 02/21

• The Cabinet Office has published Procurement Policy Note 02/21: The WTO GPA and the UK-EU TCA which sets out: the requirements for public authorities under the World Trade Organisation (WTO) Agreement on Government Procurement (GPA) (which applies to the UK as an independent party as of 1 January 2021); and the action required by public authorities to follow the UK-EU Trade and Cooperation Agreement (TCA). PPN 02/21 is effective from 19 February 2021 and calls for public authorities to familiarise themselves with the UK's commitments under the GPA and the TCA set out in the PPN.
• The GPA is an agreement between 21 countries which have elected to be within the WTO framework. The UK was previously a member as part of the EU but has negotiated independent membership. As the UK's public procurement regulations already comply with the GPA, public authorities have to simply comply with domestic procurement law to follow GPA requirements.
• The government has also successfully negotiated on the TCA, which provisionally applies from 1 January 2021 and is implemented in the UK under the EU (Future Relationship) Act 2020 (even though it is still pending approval by EU institutions). The TCA's aim is to: provide market access that goes beyond the GPA through clear and enforceable rules; "protect UK-owned businesses based in the EU from the risk of discrimination in EU public procurements due to their UK ownership"; and open up public procurement markets in gas and heat and private utilities that act as a monopoly. For more information, see Agreements reached between the United Kingdom of Great Britain and Northern Ireland and the European Union.

Industry skills plan

• The CLC has published a sector-wide Industry Skills Plan for the UK Construction Sector 2021-25 to set out the skills shortages challenges facing the construction industry and how to deal with them. Key areas addressed are: careers, standards and qualifications, training, education and development, and culture and working environment. Commitments include: "Creating Talent View, a one-stop-shop portal for new entrants; recruiting 7,000 construction STEM Ambassadors; developing an industry standard for work experience; producing competence frameworks; new training standards for Net Zero and Smart Construction; [and a] pledge to promote direct employment".

UK Infrastructure Bank

• Alongside the launch of the UK Infrastructure Bank (UKIB), HM Treasury published its Policy Design of the UK Infrastructure Bank which provides more detail on the design of the bank and, in particular: the initial capital available for the Bank; the location of the Bank's headquarters; a rate for local authority lending; and the next steps in the Bank's development. The bank is expected to start operations in an interim form in spring 2021.
• The National Infrastructure Commission (NIC) has published its Annual Monitoring Report for 2021 which sets out 10 points for the government to address over the next year.
• The Infrastructure and Projects Authority (IPA) announced, on 24 March 2021, the launch of the new Projects Academy to "transform training and accreditation for project delivery professionals in government". The new Government Project Delivery Framework was also announced on 24 March 2021 which sets out "the core requirements to be met at key stages by major projects, programmes and portfolios in government, incorporating best practice guidance".