Retentions under construction contracts (Scotland)

• The Scottish Minister for Business, Fair Work and Skills established a short life, working group (SLWG) in January 2021 "to consider and make recommendations on the practice of cash retentions under construction contracts". The SLWG has now published those recommendations and believe that they will, if implemented, resolve many of the challenges associated with the use of retentions. See Cash retention under construction contracts: short life working group final report and recommendations. The recommendations are to be read alongside other construction sector proposals for change (for example, work by the Scottish Construction Leadership Forum (CLF) such as the Construction Recovery Action Plan). While not supporting an outright ban (due to the lack of low cost, simple alternatives), the longer-term aim is to significantly reduce the use of retentions in contracts and establish alternative mechanisms to ensure contract delivery and compliance. Key recommendations for the Scottish Government include: 
  
  
  • introducing legislation to establish a statutory custodial Retention Deposit Scheme;
    
    
  • publishing a retention best practice policy note for contracting organisations by end January 2022; 
    
    
  • encouraging compliance and moving towards an automatic release of retentions;
    
    
  • requiring late/partial payment to be justified; 
    
    
  • requiring contracting parties on large projects using Scottish Government finance to publish retention policies and, within six months of practical completion, their compliance record; and
    
    
  • working to ensure best practice is promoted and included in standard form contracts.

Achieving net zero and high street regeneration

• The government has launched a "long-term plan to support the evolution and regeneration of high streets": Build Back Better High Streets (15 July 2021). The strategy accepts that the world has changed and sets out five areas in which the government will take action: breathing new life into empty buildings; supporting high street businesses; improving the public realm; creating safe and clean spaces; and celebrating pride in local communities. The government aims to cut red tape and open up funding to give high streets greater flexibility to adapt and succeed.

Updated National Planning Policy Framework and National Model Design Code

• The government's consultation on draft revisions to the National Planning Policy Framework (NPPF) and a new draft National Model Design Code closed on 27 March 2021. The Government response to the National Planning Policy Framework and National Model Design Code: consultation proposals was published on 20 July 2021 alongside its revised NPPF (which came into force on 20 July 2021). The revised NPPF includes, for example: the need to foster beautiful places as one of the criteria in the social objectives for sustainable development; the United Nations' 17 Global Goals for Sustainable Development; and requirements for planning policies and decisions to ensure streets are tree-lined. (See also the Ministry of Housing, Communities & Local Government (MHCLG) report: Living with beauty; promoting health, well-being and sustainable growth, which initially recommended the policy changes.)
  
  
• Note: these latest NPPF updates are separate from the government's proposals for planning reform set out in Planning for the Future that are still under review.
  
  
• The MHCLG also updated The National Model Design Code that provides detailed guidance "on the production of design codes, guides and policies to promote successful design". The National Model Design Code: part 1 – the coding process expands on the 10 characteristics of good design set out in the National Design Guide, which reflects the government's priorities and provides a common overarching framework for design. The National Model Design Code: part 2 – guidance notes set out possible contents for a design code, modelled on the 10 characteristics of well-designed places set out in the National Design Guide.

Preparation continues

• On 7 July 2021, the UK, as president of COP26, published its UK's Presidency Programme for COP26. The first two days of this major climate summit in Glasgow (from 31 October 2021 to 12 November 2021) will include a World Leaders' Summit to address "action towards securing global net zero and keeping 1.5 degrees in reach". Key topics – all of which affect the construction industry – include finance, energy, youth and public engagement, nature, adaption, loss and damage, gender, science and innovation, transport, cities, regions and built environment.
  
  
• On 23 July 2021, the Scottish Secretary marked the 100 day countdown to the start of the COP26 UN climate change conference in Glasgow by urging business leaders to "embrace their responsibility to slash greenhouse gas emissions", referencing the Prime Minister's ten point plan for a Green Industrial Revolution.
  
  
• COP26 President, Alok Sharma, convened a meeting of 51 countries in July "to shape the vision of the final outcomes from COP26, and build a 'unity of purpose to deliver them'". The key goal is to keep "the critical 1.5C temperature rise limit alive". Topics discussed included: "mobilising climate finance, scaling up efforts to adapt to the impacts of climate change, loss and damage caused by climate change, and finalising the"rulebook" for implementation of the Paris Agreement, with a focus on Article 6, which sets out how countries can reduce emissions using international carbon markets and non-market approaches".

 Industry action 

• The Institution of Civil Engineers' (ICE) annual State of the Nation report, setting out its recommendations and interventions, is expected in October 2021. This year's report will build on "two recommendations from last year's State of the Nation 2020: Infrastructure and the 2050 net-zero target report – engaging the public to act and providing an infrastructure skills plan, to encourage civil engineers to develop low carbon solutions with the end user in mind". The State of the Nation 2021: Project Board, led by ICE President Rachel Skinner, will meet ahead of the launch to explore "solutions that enable more sustainable choices for society" and how civil engineers "as a profession, can use [their] collective influence to enable low-carbon choices". See State of the Nation 2021: how civil engineering can enable low carbon choices.
  
  
• The ICE has published a report on "What makes good design?" based on a recent ICE survey  into members' understanding of "good" design – and the cultural shift needed to help them deliver it. Key findings included that "about 60% of respondents thought climate issues were not given enough importance in design" and that "respondents broadly supported the view that wherever they were in the project lifecycle they had a responsibility to influence design" but "believed the skills to achieve this were lacking at every level". The ICE has recommended that climate be ramped up the agenda for all ICE activities "to help create the right environment to support the implementation of low carbon solutions".
  
  
• The Construction Leadership Council (CLC)'s Green Construction Board launched its Zero Avoidable Waste Routemap, on "how to manage construction waste to increase efficiency, reduce carbon and save cost" on 22 July 2021 (see the press release). The Routemap sets out recommended actions for government and businesses engaging in construction, demolition and waste excavation. Milestones are set leading to the overall goal of achieving Zero Avoidable Waste by 2050.
  
  
• Following a consultation earlier in 2021 on demonstrating net zero progress, the CLC published its Construct Zero Performance Framework on 20 July 2021 as part of "its mission to drive out carbon" from the sector. (See the CLC news release). The framework draws on work "undertaken across the sector by specialist groups and representative bodies to understand their emissions and develop their own plans". It sets out commitments to the nine priorities for carbon reduction (in transport, buildings and construction activities) outlined in March 2021. The headline commitments include: 
  • eliminating 78% of diesel plant from construction sites by 2035; 
  • ensuring planning applications from the sector connect to public/active transport and include EV charging where parking is provided (from 2025); 
  • retrofitting 27 million homes by 2040; 
  • designing all new buildings with low carbon heating solutions from 2025; 
  • minimising energy demand and reducing emissions by 75% (dwellings) and at least 27% (commercial buildings) compared to current standards (from 2025); 
  • providing carbon data to those buying from the sector by 2030 so that they can make informed lower carbon choices; 
  • giving all clients the chance to become net zero by offering alternative Net Zero design options to clients even if not scoped (from 2022); 
  • reducing construction product emissions by 66% from 2018 (by 2035); and 
  • targetting 1,500 of the sector’s businesses and clients to sign up to a measurable carbon reduction plan.
    
    
• The CLC has also supplied metrics to enable success to be measured and to hold itself and the industry accountable to its commitments. It will collate the data and publish it (see the CLC web hub https://www.constructionleadershipcouncil.co.uk/constructzero/). 

Energy standards for new buildings – improving domestic buildings emissions (Scotland)

• The Scottish Government has released research to "identify potential improvements in energy and emissions performance for new domestic buildings". The research was published in July 2021 to support proposed improvements to energy standards for new buildings within Scottish building regulations in 2021 as set out in the consultation paper. The proposed changes to energy standards within the Scottish building regulations include consideration of related topics such as ventilation, overheating and electric vehicle charging provision". The consultation will run until 15 October 2021.
  
  
• The Scottish Government has published a report on the Building regulations - overheating risk in new homes: research report, (23 July 2021). The report, which sets out research into overheating risk in new homes, was produced in support of proposed improvements to energy standards for new buildings within Scottish building regulations in 2021.
  
  
• The Scottish Government is also consulting on domestic Energy Performance Certificates (EPC) reform. The consultation sets out "proposals to change the EPC format leading on from proposals set out in the draft Heat in Buildings Strategy to reform the EPC framework".

Levelling up

• On 15 July 2021, the Prime Minister gave a speech on his vision to level up the UK: The Prime Minister's Levelling Up speech: 15 July 2021 in which he acknowledged the scale of this "huge undertaking". The House of Commons, Business, Energy and Industrial Strategy Committee (BEIS), HC 566, published its report, Post-pandemic economic growth: Levelling up (22 July 2021), explaining the concept of levelling up, why it is needed, from where the funding will come, how it will be delivered and how success will be measured. Levelling up is (in the Committee's view) "the spreading of economic and social opportunities more evenly across the country" – and "should be a priority for any Government". The report highlights that what the government means by the definition, how it will be delivered and by whom, is not clear. The Committee's recommendations include: publishing the Levelling Up white paper urgently; introducing metrics to measure success; setting up a Levelling Up Cabinet committee; recognising that inequalities exist across the UK and not simply within certain regions; and ensuring regions have capacity to bid for government funding.
  
  
• The Board of Trade has set out its views on free and fair green trade in a policy paper: Board of Trade report: green trade (HTML executive summary). The paper puts the case for and highlights the benefits of free and fair green trade and explains the opportunity for Global Britain to speed the global green transition through trade. This second report by the Board of Trade outlines how green trade can support environmental action and the government's goal to bring climate change and nature loss to the forefront on trade agendas. 

Questions raised on government procurement proposals

• The government consulted on its Green Paper: Transforming public procurement between 15 December 2020 and 10 March 2021. The government's proposals aim "to speed up and simplify our procurement processes, place value for money at their heart, and unleash opportunities for small businesses, charities and social enterprises to innovate in public service delivery". The House of Lords Public Services Committee (Committee) has since conducted two evidence sessions and written to the government expressing concern on some aspects of the proposals (see the letter of 28 July 2021) including that the proposals "prioritise competition to the detriment of collaboration among providers of public services, give insufficient recognition to the important role played by the voluntary sector, fail to promote expertise in commissioning and do not align with the Health and Social Care Bill". The Committee has asked the government to what extent the Procurement Bill will: promote collaboration in the delivery of public services ahead of competition between service providers; embed the flexibilities that were introduced during the pandemic; give sufficient recognition to the important role played by the voluntary sector in embedding social value; meet skills gaps in commissioning expertise; and enable the sharing of commissioning expertise best practice at local level. In addition, the Committee asks how the government will ensure that social value requirements do not introduce excessive bureaucracy for local providers.

Scottish measures to manage resources

•  The Scottish Government has issued Resources for construction projects: CPN 3/2021 (28 July 2021) which "sets out measures for contracting authorities to manage and mitigate market pressures affecting the availability and affordability of construction sector resources".

Post-Brexit review on reforming the framework for better regulation

• BEIS is consulting on Reforming the framework for better regulation. The government's approach to regulation will be informed by five key principles: a sovereign approach to setting rules in a tailored way to benefit the British people; swift action to support new technology development; a proportionate approach to rule-making (avoiding regulation where possible); ensuring regulations "work in the real world"; and setting high standards at home and globally through robust regulatory diplomacy, influencing others' decisions and helping problem solve.
  
  
• Proposals under consideration include a less-codified, common law approach to regulation; a review of the role of regulators; giving regulators more discretion balanced with increased accountability and scrutiny; and streamlining the impact assessment process. The consultation ends on 15 October 2021.

Pandemic recovery

• Most COVID-19 restrictions ended on 19 July 2021 (in England: COVID-19 Response: Summer 2021) and 9 August (Scotland: Scotland to move beyond level 0). However, extended planning and construction working (site operating) hours will remain until October 2021 according to updated guidance issued on 22 July 2021: Coronavirus (COVID-19): construction update Q&A. Further government guidance can be found here Working safely during coronavirus (COVID-19) guidance. 
  
  
• Some sites will have been affected by the "pingdemic" where workers have been required to self-isolate via the NHS COVID-19 app after close contact with someone who has tested positive for COVID-19. On 23 July 2021, the CLC called on the government to relax the self-isolation rules ahead of the planned date of 16 August to avoid the difficulties caused to the construction industry by staff shortages. See the CLC briefing which provided an update on COVID-19 and self-isolation (as 21 July 2021).
  
  
• The CLC has confirmed that the Site Operating Procedures, although no longer reflecting latest government guidance, will remain available for reference purposes from 19 July 2021. Guidance on the use of face coverings in construction can be found here.

Who pays for fire safety remediation work?

• The House of Commons Library has published its report on Leasehold high-rise flats: who pays for fire safety work? (16 July 2021). The report sets out the government's position on funding remediation work and includes comment from stakeholders and the Housing, Communities and Local Government Select Committee on the adequacy of government assistance and potential alternative approaches. The report summarises the current position including the government response to the Grenfell Fire, the Building Safety Programme and the funding to remove aluminium composite cladding (ACM). The Committee reports on ongoing issues including: the slow pace of remediation work; the lack of information on the number of blocks with unsafe non-ACM cladding; the adequacy of government funding; exclusions from the Building Safety Fund for non-ACM cladding removal; the lack of assistance for other fire safety defects and interim measures; the lack of assistance for blocks under 11 metres in height; the implications of the new Building Safety Charge under the Building Safety Bill; and the impact on leaseholders facing rising costs and who are unable to sell their homes (and the physical and mental toll on affected leaseholders which the Committee calls a public health crisis).
  
  
• The Committee's report considers the government approach to funding the remediation works and reports on options considered by The All-Party Parliamentary Group (APPG) on Leasehold and Commonhold at a meeting on 10 December 2020.

Law Society guidance on EWS1 forms

• The Law Society has launched new guidance "to help home buyers and sellers to understand building safety and cladding issues". The guidance explains the External Wall System 1 (EWS1) form that provides a rating of the building’s fire safety and was created by the Royal Institution of Chartered Surveyors (RICS) and UK Finance to help reassure lenders. The guidance covers: the issues to be investigated before the transaction proceeds, who can conduct the investigation and what solicitors can do to help; fire risk assessments; the EWS1 form (which must be renewed every five years); the types of buildings affected and the effects of different ownership models on these buildings; buildings insurance; and government grants.

The Golden Thread report published

• The Building Regulations Advisory Committee (BRAC) and MHCLG have published the BRAC golden thread report (21 July 2021) to provide an "overview of the development of golden thread policy, and how it has been jointly progressed by the MHCLG, the Health and Safety Executive (HSE) BRAC golden thread working group and other stakeholders. Establishing a golden thread of information was proposed by Dame Judith Hackitt as a tool "to manage buildings as holistic systems and allow people to use information to safely and effectively design, construct and operate their building". (See also the press release.) "The golden thread is both the information that allows you to understand a building and the steps needed to keep both the building and people safe, now and in the future."
  
  
• The high-level requirement for a golden thread to be put in place for all buildings affected will be implemented through clauses 32 (section 1D), 88, 89 and 90 of the Building Safety Bill. Golden thread regulations and guidance will follow the Bill. The report highlights the government's introduction of a tougher regulatory regime through the Building Safety Bill as well as proposed draft secondary legislation for buildings 18 metres and above or seven storeys and above, (whichever is reached first).

Wales

•  The Building Safety Bill affects England and Wales and will enable the Welsh government "to modernise the design and construction process as set out in the Welsh government’s White Paper: Safer Buildings in Wales". The Welsh government has published two impact assessment reports:  The Building Safety Bill: integrated impact assessment and The Building Safety Bill: economic impact assessment to help implement those changes with a view to improving every stage of the building lifecycle.