Construction supply chain must band together in face of coronavirus

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Build UK has warned that the response from clients and contractors will be crucial for the survival of businesses of all sizes amid the coronavirus crisis

The coronavirus crisis continues to escalate rapidly and the impact on businesses across the construction industry, many of them SMEs, is proving to be dramatic and unavoidable.

In its latest statement, Build UK said ‘liquidity is now the critical issue for construction’ as we enter the third week of lockdown.

It said: “The response from clients and contractors will be key to the survival of businesses of all sizes.

“There is a choice: fall back on contracts, pay for costly legal advice, and prepare for adversarial disputes or bring the supply chain together, and collectively look at how construction work can continue without putting workers at risk.”

Build UK said it continues to work closely with the Construction Leadership Council (CLC) to ensure that the government supports the construction sector and that its members have access to all the information and advice they need to make decisions.

Last week the CLC wrote to the prime minister to set out additional financial measures to support the industry.

Build UK said it continues to raise other key issues through the CLC in its regular discussions with Government. These include:

  • Enforcement of safe working
    • If it comes to the HSE’s attention that employers are not complying with the relevant Public Health England (PHE) guidance, HSE will consider a range of actions, from providing advice to issuing enforcement and prohibition notices. The HSE has also set up a website for workers to report concerns about health and safety where they cannot be resolved by speaking with their employer or trade union.
    • The Welsh Government is introducing new regulations this week which will require businesses to take all reasonable measures to ensure the 2-metre rule is maintained between people on their premises whenever work is being carried out. Guidance will be issued to explain what those reasonable measures are.
  • Essential work – The government has made it clear that construction should continue to operate at this time provided that sites can implement the Site Operating Procedures and as a result there is currently no definition of ‘essential work’ for construction. Work critical to the response to COVID-19, such as the Nightingale hospitals, are being delivered at pace by companies across the supply chain and this will continue. We anticipate other work that is critical to the provision of essential services, public safety or the safe shutting down of systems will be defined so that it can also continue in the event that the lockdown is extended or social distancing requirements enhanced.
  • Essential workers – Build UK has asked that construction workers be deemed ‘essential workers’; however, this is not the case at present unless their work is critical to the response to COVID-19. The Home Office has informed police forces that construction workers and suppliers are permitted to work and the CLC has provided a letter for employers to give to their workforce.
  • Domestic work – The government has confirmed in its guidance on Going to Work that work in people’s homes can continue as long as it is safe to do so.
  • Loan schemes
    • The Coronavirus Business Interruption Loan Scheme (CBILS) has been extended so that all viable small businesses are now eligible and lenders will no longer require personal guarantees for loans under £250,000. The approval process has also been reviewed and decisions should be made much more quickly.
    • A new Coronavirus Large Business Interruption Loan Scheme (CLBILS) has been introduced with loans of up to £25m available to firms with an annual turnover between £45m and £500m. Further details of the scheme will be announced later this month.
  • Furloughing workers – As businesses take the decision to ‘furlough’ workers under the Coronavirus Job Retention Scheme, the CLC has asked the Government to review the three-week minimum period. This is currently preventing construction companies from responding effectively to the need for labour as sites adjust their programmes or reallocate resources. Wedlake Bell has produced easy to read the guidance on furloughed workers setting out what employers need to know.
  • Accelerating work – Some clients are exploring how they can bring projects forward or accelerate work, particularly across the transport network whilst it is being underutilised. suppliers are permitted to work and the CLC has provided a letter for employers to give to their workforce.
  • PPE – PHE has been asked if PPE and RPE not in demand by the NHS and front line care services could be used on construction sites to reduce the transmission of infection between workers and we are waiting for a response.

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