Coronavirus: Construction sector urged to pull together

14th Apr 2020

Firms in construction are being encouraged to unite, continue paying the supply chain and avoid contractual disputes in order to help ensure the industry’s survival through Coronavirus.

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Just under a third of construction sites across the UK have been suspended due to Covid-19 according to research by Glenigan, which, within transport, includes most prominently work on Crossrail.

The figure is higher in Scotland where 79% of projects are currently halted after the Scottish Government announced that all ‘non essential’ sites should close, while Northern Ireland has also put a stop to most work.

Whitehall, however, has maintained its position that sites can stay open as long as work is carried out in compliance with social distancing requirements, which see workers stay two metres apart where possible.

An update from trade body Build UK said on Tuesday that more sites are now expected to reopen under social distancing rules following the Easter weekend.

A third edition of Site Operating Procedures to help the industry comply with Public Health England requirements will also be published this week by the Construction Leadership Council.

This comes after the Council said last week it was concerned about the management of payments to the supply chain and the risk that clients and contractors will seek to invoke contractual clauses to the detriment of other firms.

“We are clear that all construction businesses should continue to pay in accordance with agreed contractual terms,” its chairman Andy Mitchell wrote in an open letter to the industry. “Similarly, firms should not be threatening to invoke penalty or other contractual clauses, when it should be the priority of all clients and firms to sustain the industry.”

Maintaining payments and managing contracts responsibly is important, he emphasised, to keep cash flowing through the supply chain and ensure the industry is in a good position to support recovery after the current crisis.

“Our actions at this time will be remembered. All firms should think hard about how their reputation could be damaged by not doing the right thing.”

The Government has also issued guidance on construction contracts to public authorities, which says suppliers at risk of insolvency should continue to be paid even where sites have been suspended or works disrupted.

The guidance from the Cabinet Office also encouraged authorities to carefully consider the early release of cash retentions to support cash flow among suppliers, and added that they may want to consider operating project bank accounts during the Covid-19 period.

(Photograph: Highways England)

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