Summary of new and proposed legislation, July/August 2021 (UK Construction Focus)

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Summary of new and proposed legislation, July/August 2021 (UK Construction Focus)

Summary of new and proposed legislation, July/August 2021 (UK Construction Focus)

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August 6, 2021

Dentons' UK Construction team prepare a monthly guide to new and proposed legislation affecting the construction industry for publication in Construction Law's "state of play" table. The July/August 2021 update is below.

Information contained in our COVID-19 articles and publications is correct at the time of print. This is, however, a constantly evolving situation across the globe and specific advice and guidance should be sought as required.

Infrastructure
Payment
Competition
Modern slavery
Achieving net zero
Climate change
The green economy
Net zero
Procurement
Building and fire safety
Housebuilding
Planning

Infrastructure
New National Infrastructure Commission plan	In its three-year corporate plan, published 23 April 2021, the National Infrastructure Commission (NIC) has confirmed that the UK's second National Infrastructure Assessment will be published in the second half of 2023. Consultation to inform its recommendations will start in autumn 2021.
UK Infrastructure Bank opens	The UK Infrastructure Bank (NIB), opened in Leeds "to support local growth and tackle climate change" (see HM Treasury announcement, 17 June 2021), "will have an initial £12 billion of capital to deploy and will be able to issue £10 billion of government guarantees". Chris Grigg CBE has been appointed as the Bank's chair. On 22 June 2021, the government accepted the Environmental Audit Committee's (EAC) recommendation that NIB be a permanent public institution and has committed to reviewing whether to broaden its mandate "to include improving the UK's natural capital, before bringing forward legislation to put the NIB on a statutory footing". See also: the Government and Bank of England Responses: Growing back better: putting nature and net zero at the heart of the economic recovery.
Payment
Prompt Payment Code	Changes announced on 19 January 2021 to strengthen the Prompt Payment Code came into effect on 1 July 2021 for existing signatories. Signatories to the code commit to paying 95% of invoices within 60 days and, from 1 July 2021, must also pay 95% of invoices from small businesses (with fewer than 50 employees) within 30 days. The code is a voluntary code of practice designed to improve cashflow and the speed and certainty of payments. It gives assurance about the corporate responsibility of signatories to their prospective and current business partners. Signatories who do not comply with the code risk sanctions and being challenged about payment practices by the Office of the Small Business Commissioner.
Competition
Guidance on the role of the Office for the Internal Market	The Competition and Markets Authority (CMA) launched a consultation on 27 May 2021 on "its proposals for how the newly created Office for the Internal Market (OIM) is expected to work". The draft guidance explains that the OIM, whose role was created by the UK Internal Market Act, will carry out independent advice, monitor and report to support the UK internal market's effective operations following the UK's exit from the EU. The consultation closes on 22 July 2021.
Modern slavery
Minimum standards of supply chain transparency	Lord Alton of Liverpool has introduced a Private Members' Bill into the House of Lords, the Modern Slavery (Amendment) Bill [HL]. The Bill is intended to ban the falsification of slavery and human trafficking statements, set up minimum standards of transparency in supply chains and stop companies using supply chains which do not demonstrate those minimum standards of transparency in relation to modern slavery and human trafficking
Achieving net zero
G7 Summit	The Group of Seven (G7) met in Cornwall between 11 and 13 June 2021 and committed, among other things, to "protect our planet by supporting a green revolution that creates jobs, cuts emissions and seeks to limit the rise in global temperatures to 1.5 degrees". They committed "to net zero no later than 2050, halving our collective emissions over the two decades to 2030, increasing and improving climate finance to 2025 and to conserve or protect at least 30 percent of our land and oceans by 2030". (See the Summary of Carbis Bay G7 Summit Communique.)
Climate change
Progress reports on how the UK is tackling climate change from the UK Climate Change Committee	The UK Climate Change Committee (CCC) was set up as an independent, statutory body under the Climate Change Act 2008 to advise the UK and devolved governments on emissions targets. It reports on progress made in both "reducing greenhouse gas emissions and preparing for and adapting to the impacts of climate change". On 16 June 2021, the CCC published its third UK Climate Change Risk Assessment Report (the Report). This statutory advice identifies priorities for government action in adapting to deal with the risks of climate change. The advice is informed by extensive new evidence gathered in an accompanying Technical Report which identifies more than 60 risks and opportunities covering all aspects of UK life from our natural environment to our health, homes, transport, buildings, manufacturing and building processes, and the economy. The CCC reports that the level of adaptation is not keeping pace with the climate risk and recommends 10 principles for good adaptation planning. The UK has the resources but needs to act now. The CCC's dedicated website (www.ukclimaterisk.org) hosts the materials from the Report. On 24 June 2021, the CCC delivered to Parliament its annual 2021 Progress Report in reducing emissions and its biennial assessment of progress in adapting to climate change. While giving credit to the government for its historic climate promises in the past year, the CCC's key message is that delivery on those promises has been too slow and marred by uncertainty and delay to new climate strategies. COVID-19 lockdown measures led to a record decrease in UK emissions in 2020 of 13% on 2019 but sustained government leadership, underpinned by a strong Net Zero Strategy, is required if the UK is to keep on track with its net zero targets. The Carbon Budget Order 2021 (SI 2021/750), which came into force on 24 June 2021, is ambitious and sets the sixth carbon budget for the 2033-2037 budgetary period at 965 million tonnes of carbon dioxide equivalent.
The green economy
Preparations continue for COP26 in Glasgow	The government has called on businesses "to accelerate climate action and seize opportunities of net zero". Ahead of COP26, Alok Sharma, COP26 President-Designate, has highlighted the United Nations initiative, Business Ambition for 1.5°C, which calls on businesses "to step up and commit your business to set science-based targets aligned with limiting global temperature rise to 1.5°C above pre-industrial levels". The Business, Energy and Industrial Strategy Committee (BEIS) has opened an inquiry, Climate change – how can the government get to "net zero"?, to examine "the leadership and co-ordination which will be needed by government to deliver on the UK's commitment to reach net zero by 2050". The inquiry, which closes on 27 August 2021, focuses on the government structures needed to meet the 2050 net zero target, the support needed by businesses to help them deliver cross-economy decarbonisation and the effectiveness of current parliamentary scrutiny arrangements for climate change.
Net zero
Construction industry initiatives	CO2nstruct Zero builds on the government's 10 point plan for a Green Industrial Revolution: it defines priorities for the construction industry as it plays its part in meeting the government's net zero target. The Construction Leadership Council (CLC) has consulted on a variety of proposed metrics for the CO2nstruct Zero initiative based on measures that the industry is already using via its CO2nstruct Zero Performance Metrics consultation. (The consultation ended 11 June 2021.) As part of the CO2nstruct Zero initiative, the Cambridge Centre for Smart Infrastructure and Construction (CCSIC) Achieving Net Zero Cross-Industry Working Group has drafted the Carbon Reduction Code for the Built Environment. The code aims "to facilitate action and collaboration by relevant parties towards reducing carbon emissions … related to design, construction, maintenance, operation and decommissioning of built assets" and to provide "a framework for organisations to make a public commitment to and report on progress towards achieving Net Zero". The "framework aligns with the UK Government's Procurement Policy Note PPN 06/21 for taking account of carbon reduction plans in public procurement" (in respect of which, see below). Core commitments for those signing up to the code include: reducing their direct and indirect carbon emissions by 75% by 2030 to meet zero carbon emissions; and publishing annual plans to meet their net zero progress. The CIC has also published Carbon Zero: the professional institutions' climate action plan to co-ordinate the short, medium and long-term efforts of professional institutions involved in the built environment towards meeting the government's 2050 net zero target. Key targets involve upskilling all built environment professionals to become energy and carbon advocates; greater regulatory focus on competence and CPD; aligning action with the requirements of the new Building Safety regime (see the commentary); and setting up an inter-organisational climate action network to promote and engage climate action among institutions' members.
Procurement
Procurement Bill	Included in the Queen's speech in May 2021 was the government's announcement of the Procurement Bill. The aim is to overhaul and simplify procurement in the public sector. The government set out its procurement proposals in the Green Paper: Transforming public procurement (15 December 2020). See also the Competition and Markets Authority (CMA) response to the green paper published 31 March 2021: CMA's response to transforming public procurement.
Consultancy playbook	The government published its Consultancy Playbook in May 2021 on "how to commission and engage with consultants more effectively, achieve better outcomes, better value for money and improved Civil Service capability through the transfer of knowledge and skills".
Procurement Policy Notes	A series of Procurement Policy Notes (PPNs) have been issued as follows. All PPNs can be found on this government website.
Procurement Policy Note 04/21: Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing	Procurement Policy Note 04/21: Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing "reminds In-scope Organisations of their obligations in applying exclusions and preventing, identifying and remedying conflicts of interest in public procurement". PPN04/21 replaces existing policy guidance (in PPN01/19) and underlines that the UK is "not immune from the effects of corruption or its perception". It clarifies changes to the procurement regulations following Brexit; provides supplementary guidance to enhance commercial teams' understanding of the exclusion provisions in procurement regulations (including case law); and guides "In-scope Organisations" (including Central Government, Departments, their Executive Agencies and Non-Departmental Public Bodies in conducting procurement procedures regulated by the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016) on developing and enhancing "local strategies, systems, processes and procedures to prevent, identify and remedy conflicts of interest". Published on 20 May 2021, PPN04/21 applied with immediate effect.
The National Procurement Policy Statement	The National Procurement Policy Statement (NPPS), published on 1 June 2021 and effective until the end of the current Parliament, "sets out the strategic priorities for public procurement and how contracting authorities can support their delivery". The government intends that public sector procurement (accounting for around a third of all public expenditure) "must support the delivery of public sector policy priorities, including generating economic growth, helping our communities recover from the Covid-19 pandemic, and supporting the transition to net zero carbon". It applies to "contracting authorities" (as defined in section 39(3) and (4) of the Small Business Enterprise and Employment Act 2015) including central government departments, executive agencies, non-departmental public bodies, local authorities, NHS bodies and the wider public sector.
Procurement Policy Note 05/21: National Procurement Policy Statement	An action note in the form of Procurement Policy Note 05/21: National Procurement Policy Statement goes on to provide information and guidance on the NPPS and requires contracting authorities to have regard to national strategic priorities for public procurement. In summary, contracting authorities should: familiarise themselves with the NPPS; consider national priority outcomes (like reviving the economy, climate change and innovation) alongside any additional local priorities in their procurement activities; consider whether they have the right policies and processes in place to manage the commercial delivery of NPPS where relevant to their procurement portfolio; and consider whether they have "the right organisational capability and capacity with regard to the procurement skills and resources required to deliver value for money". Published on 3 June 2021, PPN05/21 applied with immediate effect. Legislation is expected: to require contracting authorities to have regard to the NPPS when undertaking procurement; and for procurement pipelines to be published and procurement benchmarking (from 2022 for those contracting authorities with annual spends of more than £200 million and from 2023 for those with annual spends of more than £100 million).
Procurement Policy Note 06/21: Taking account of Carbon Reduction Plans in the procurement of major government contracts	Procurement Policy Note 06/21: Taking account of Carbon Reduction Plans in the procurement of major government contracts "sets out how to take account of suppliers' Net Zero Carbon Reduction Plans in the procurement of major Government contracts". The UK's "net zero" target is a 100% reduction in the net UK carbon account (i.e. reduction of greenhouse gas emissions, compared to 1990 levels) by 2050 (see the Climate Change Act 2008 as amended in 2019). "In-Scope Organisations" (all Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies) should now "take action to apply this PPN when procuring goods and/or services and/or works with an anticipated contract value above £5 million per annum (excluding VAT) which are subject to the Public Contracts Regulations 2015 save where it would not be related and proportionate to the contract". PPN06/21 applies to "framework agreements and dynamic purchasing systems only where it is anticipated that the individual value of any contract to be awarded under the framework agreement or dynamic purchasing system is greater than £5 million per annum (excluding VAT)". Pre-contract award verification of supplier commitment to achieving Net Zero is required before entering into any contract awarded under a framework agreement. Relevant suppliers wishing to bid will be required at the selection stage to submit a Carbon Reduction Plan detailing their organisational carbon footprint and confirming their commitment to achieving Net Zero by 2050. (PPN06/21 includes a template plan.) Published on 5 June 2021, In-Scope Organisations must apply this PPN to relevant procurements advertised on or after 30 September 2021
Procurement Policy Note 07/21: Update to Legal and Policy requirements to publish procurement information on Contracts Finder	Procurement Policy Note 07/21: Update to Legal and Policy requirements to publish procurement information on Contracts Finder provides consolidated guidance to remind In-scope Organisations of the requirements "of the Public Contracts Regulations 2015 (PCRs 2015) to publish information about opportunities and awards over certain low value thresholds on Contracts Finder (CFS). The guidance incorporates additional policy requirements on Central Government to publish procurement and contract documents". PPN07/21 was published on 24 June 2021 and took immediate effect. Guidance on the transparency requirements for publishing on Contracts Finder was published alongside PPN07/21. Updated guidance on transparency principles was also published on 24 June 2021: Procurement Policy Note 01/17: Update to Transparency Principles.
Scotland	The Scottish Government has issued a new Construction Policy Note CPN 2/2021: Conflict avoidance – early intervention to avoid disputes. The CPN evidences Scottish Government "support for the principle of avoiding conflict in construction contracts and urges other contracting authorities to align their construction procurement policy likewise". Aimed at contracting authority staff involved in the planning and delivery of public works projects, the CPN is applicable guidance under the Scottish Public Finance Manual and develops early intervention and conflict avoidance policy in the Project and Business Cases Handbook in the Client Guide to Construction Projects (Chapter 1) and in CPNs 1/2020 and 4/2020..
Building and fire safety
Building Safety Bill	See the commentary.
The Fire Safety Act 2021	The Fire Safety Act 2021 (FSA), which received Royal Assent on 29 April 2021, makes provision relating to which premises are covered by the Regulatory Reform (Fire Safety) Order 2005 (RRO) and clarifies the extent of the RRO's application. It delegates power to ministers in England and Wales to regulate the types of premises falling within RRO 2005's scope
Housebuilding
New Residential Property Developer Tax	In February 2021, the government announced its intention to introduce a new Residential Property Developer Tax (RPDT) as part of its Building Safety Package "to provide reassurance to homeowners and restore confidence in the housing market". The RPDT will raise revenue of at least £2 billion over a decade to help fund the government's remediation work, ensuring residential property developers are part of a fair solution to the complex problems highlighted by the Grenfell fire tragedy. Recognising the significance of this tax on businesses and the community, HM Treasury has consulted on how the RPDT would operate, including two alternative methods of calculation and how to define "residential property" and "development activity". It is planned that the RPDT will be introduced in 2022 to companies undertaking UK residential property development on profits exceeding an annual allowance of £25 million. The consultation ended on 22 July 2021. The RPDT will be set out in the 2021-22 Finance Bill and operate alongside the new "Gateway 2 Levy" under the Building Safety Bill which will apply "when developers seek permission to develop certain high-rise buildings in England".
New Homes Quality Code – consultation	The New Homes Quality Board (NHQB) has undertaken a consultation on the draft New Homes Quality Code that ended on 7 July 2021. The code is central to the new arrangements to protect homeowners, which includes the establishment of the New Homes Ombudsman Service "to provide additional and independent redress to consumers who purchase a New Home for their own occupation". The code: "takes into consideration other emerging policy including on leasehold and building safety, all of which the NHQB is committed to supporting"; "establishes mandatory requirements which must be adopted and complied with by developers and new homes builders who are registered with the [NHQB]"; and comprises a "Statement of Fundamental Principles", which developers agree to adhere to, and the "Practical Steps" which set out what is expected at each stage of the process.
Planning
The future of the planning system	The Housing, Communities and Local Government Committee (HC 38) has published its report on The future of the planning system in England. The report considers the government's proposed reforms to the planning system announced in August 2020. The Committee considers that more detail is needed about the government's proposals and gives specific feedback on: the division of local areas (via Local Plans) into three parts (growth, renewal and protected) (more detail needed and consideration of whether to add additional categories); public engagement and reforms to local plans (whether the proposed shift to public engagement on local plans rather than individual planning proposals might reduce public engagement in the planning process); the housing formula (clarity needed on how major cities and towns can deliver the housing demanded given current restrictions on land availability); housing delivery (which needs to be more speedy); an infrastructure levy to replace the current Section 106 and Community Infrastructure Levy (preserve Section 106 to protect against a possible loss of affordable housing); resources (more needed for planning departments); design and beauty (a broader definition is needed); and green belt and environmental and historical protections (a green belt review is needed).

Parts of this table were first published in Construction Law on 3 August 2021 as the "State of Play table 262". You can subscribe to Construction Law's newsletter here.