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News & Blog

Confederation Comments - Time to Recognise the Worth of Specialist Contractors

 

 

  

 

Time to Recognise the Worth of Specialist Contractors

October 2018

As specialist contractors carry out the vast majority of construction work in the UK, isn’t it time the construction industry acknowledged their role. Specialist contractors and suppliers will together produce the bulk of the detailed design work and will manufacture, fabricate, supply, install, commission and maintain the components which make up the finished building or structure. However, this is conveniently forgotten when Main Contractors deal with the Client.

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Confederation Comment - Avoid Making Contractual Mistakes - Invest in Training!

 

 

 

 

 

  

 

Avoid Making Contractual Mistakes - Invest in Training!

October 2018

The ARCADIS Global Construction Disputes Reports are always an interesting read. The 2018 report was no exception, and  rather depressingly, it finds that the UK’s top three causes of disputes are as follows:

1st –     A failure to properly administer the contract

2nd –    Employer/Contractor/Subcontractor failing to understand and/or comply with its contractual obligations

3rd -      Failure to serve the appropriate notice under contract

The three causes blatantly highlight the failure of companies to administer contracts correctly. It is reasonable to recognise that, understandably, vast amounts of time and resource are thrown at tendering and winning work; however...

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Confederation Comment - 'Aldous' Bill Delayed Again!

 

  

 

'Aldous' Bill Delayed Again!

June 2018

The Confederation has been supporting the ‘Aldous' Bill path through parliament because it is an attempt to protect SMEs’ retentions from spurious deductions and upstream insolvencies. More than £10.5bn of SMEs’ potential working capital is locked up in retentions every year and £7.8bn was unpaid in the last three years, with upstream insolvencies leading to £700m being entirely lost to SMEs in a three-year period.

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Confederation Comment - Support for the 'Aldous' Bill

 

  

 

Support for the 'Aldous' Bill

June 2018

The Confederation of Construction Specialists has noted Build UK’s, the Civil Engineering Contractors Association (CECA), supported by the Construction Products Association (CPA) response to Andrew Griffiths MP enquiry about their support for the ‘Aldous’ Bill. 

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Confederation Comment - Confederation Supports Petition at Number 10 for Payment Practice Reform

 

 

Confederation Supports Petition at Number 10 for Payment Practice Reform 

April 2018

The Confederation of Construction of Specialists has been vocal in its support for the Aldous Bill and the Fair Payments petition. Additionally, the confederation has encouraged all confederation members and the wider construction community to write to their MPs to support the Aldous Bill and to sign the petition. 

The Bill is supported by over 120 MPs and 76 industry trade bodies representing over 355,000 companies and many self-employed professionals. Cross-party support for reform includes Conservatives , Labour, Liberal Democrates, SNP, DUP, Plaid Cymru and the Green Party. 

Gerald Kelly - Confederation General Manager

"I was pleased to to represent the Confederation of Construction Specialists on the day as the confederation has been campaigning for many years to end the unfair retention practice. Retentions drain money away from specialist contractors and stop them using it to invest in their business and workforce. It is an unfair burden that the supply chain should not have to endure and must be stopped. Parliament does agree, in 2002 and 2008, the business Select Committee recommended phasing out the cash retention practice because they were outdated and unfair to small firms. Furthermore, a succession of commissioned reports also agree. The Banwell report, commissioned in 1962, recommended the abolition of the retention practice altogether. The Lathan report, commissioned in 1995, recommended that cash retentions should be at least protected in a trust account. So I urge more MPs to support the Aldous Bill as there is not a fair and  justifiable reason not to!!"

Confederation Comment - The Late Payment oF Commercial Debts (Amendment) Reg 2018

 

 

 

The Late Payment of Commercial Debts (Amendment) Regulation 2018 

 February 2018

The Confederation has voiced it concerns to Andrew Griffiths MP (Dept. for Business, Energy & Industrial Strategy) about the Late Payment of Commercial Debts (Amendment) Regulation 2018 that is due to come into force on February 26th, 2018. The amendment will have no effect whatsoever to payment abuse applied by main contractors on subcontractors and suppliers in the construction industry.

Read letter…

Associate Member Article

 

Mental Health – Let’s talk about it! 

Construction workers are ten times more likely to take their own lives than die as a result of a workplace accident. Anyone who has attended a funeral following a suicide will recognise the nagging question “could I have said or done something to prevent this” and to be honest most of us couldn’t. That said, if we lived or worked in a culture where we felt able to discuss our mental health or knew where to go if we were troubled then maybe the answer would be different.

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Confederation Comment - Retention Campaign - Press Release

 

 

 

Construction Retention  – Press Release

January 2018

The Confederation of Construction Specialists has noted that the Construction Products Association, CECA and Build UK are calling on the Government to abolish the practice of retention in the construction industry by 2025. Although the Confederation of Construction Specialists applauds the intention, we do not agree that waiting until 2025 is warranted. Abolishment of this outdated and detrimental practice should be immediate. Therefore, we call on the Government to abolish retentions immediately and to introduce the appropriate legislation to do so.

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Confederation Comment - Retention Campaign

 

 

 

Retention Campaign

December 2017

The Confederation has been raising awareness of the despicable retention problem within the construction industry for many years. This year was not an exception as we voiced our members’ concerns, on numerous occasions, throughout 2017. Therefore, it is pleasing that the confederation along with twenty-two other associations have come together and signed a letter which highlights the retention concerns of these associations. The letter will soon be sent to Business Secretary Greg Clark to emphasise the need for Government reform of the retention issue.

Many media outlets have promoted the letter (including the Telegraph and the Construction Enquirer), so the pressure is increasing on the Government to make a stand for the construction businesses that are detrimentally affected by these payment practices. The Confederation will continue to raise awareness of this issue until acceptable reform has been made.      

Read Letter…

Confederation Comment - Retention Madness!

 

 

 

Retention Madness!

December 2017

 

The Department for Business, Energy & Industrial Strategy (BEIS) have reported in their ‘RETENTION'S IN THE CONSTRUCTION INDUSTRY BEIS Research Paper 17’ that £700 million worth of cash retention has been lost in construction over a three-year period because of insolvencies. Significantly, 44% of surveyed contractors had experienced retentions being withheld in the last three years because of upstream insolvencies.

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Associate Member Article

 

 

 

Payment Provisions - Let the payer be aware!

November 2017

Firstly, a brief recap.  The Housing Grant Construction and Regeneration Act of 1996 (the Construction Act) introduced into all construction contracts for work in the United Kingdom, specific payment provisions.  There were only limited exceptions principally contracts relating to residential occupiers.  There were two particular provisions.

1.1   Section 110(i)(a) provided that every construction should provide an adequate mechanism for determining when payments became due and Section 110(ii) obliged a paying party to give notice no later than 5 days after the date when a sum became due specifying the amount to be paid and the basis upon which it was to be calculated.

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Training News - Arden University backed Contractual Dispute Avoidance Programme

 

 

Training News – Congratulations to Jennifer Armstrong!

Published September 2017

 

Following a pilot programme, we are really pleased to announce that Jennifer Armstrong is the first recipient of the Arden University backed Level 4 Construction Contractual Dispute Avoidance Programme certificate.

 

The programme has six modules which instils candidates with the knowledge and confidence to rigorously interrogate candidates so that contract disputes can be avoided.

 

Course modules: Introduction to Contracts,  Supervising and Managing Specialist Construction Work, Obtaining Payment, An Alternative Form of Contract, Handling Claims & Disputes and Specialist Subcontract Management.

 

Programme Leaflet

 

Confederation Comment -Don’t give an excuse not to pay – understand and use your construction contracts

 

 

Don’t give an excuse not to pay – understand and use your construction contracts

August 2017 

Yet another survey that identifies that subcontractors are being poorly treated and are suffering with late and reduced payments.  

The latest Construction News survey; ‘Late Payment: The state of the construction Industry’ concluded that respondents to the survey indicated that 25% of payments are not made on time with 40% of respondents stating that their payment terms exceeded 40 days. In addition, only 55% of respondents from tier one contractors indicated that they pay in accordance with their contractual terms, with 25% of Main Contractors and 20% of subcontractors’ respondents indicating that contractual disagreements affect prompt payment.

…Read more

Associate Member Article

 

 

 

Changes in employment law expected to tighten up on labour only subcontractors, zero hours contracts and those working in the 'Gig' Economy

Published July 2017 

I recall the first case of worker status crossing my desk in November 2011, days after I had joined THSP as Head of Employment Law from my role as HR and Corporate Services Director at a large construction company. The case in question related to a ‘self-employed’ contracts manager. You may recall that the industry had a slowdown in late 2011 and, like many other construction companies, one of my clients needed to restructure its management to deal with a reduction in workload.

 

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New Construction Contractual Dispute Avoidance qualification

 

  

 

 

 

New Construction Contractual Dispute Avoidance qualification

June 2017 

 

We are really excited to announce that the Confederation has been collaborating with ARDEN University to develop a Construction Contractual Dispute Avoidance qualification. The qualification and course is now developed and we are now registering interest for a course later this year.

 

The course is made up of six units:

Introduction to Contracts, Supervising and Managing Specialist Construction Work, Obtaining Payment, An Alternative Form Contract, Handling Claims and Disputes, and Specialist Subcontract Management.

 

The course is set at Level 4, is thorough and substantial and is designed to provide a broad appeal to all construction staff who are involved with contracts. The course will give an in-depth understanding of contracts and the knowledge and confidence to use them to your company's advantage. Link to Leaflet

 

To register interest, contact:

Katy Barker (Membership and Training Co-ordinator)

This email address is being protected from spambots. You need JavaScript enabled to view it. 

Tel: 01252 624763

Associate Member Article

 

 

 

The Personal Guarantee Dilemma: Should a Director Succumb to a Personal Guarantee?

Published June 2017 

There are two fundamental principles in company law. First, every company has its own legal identity, which is not the same as the identities of its shareholders and directors. Secondly, in the case of limited companies, which take up the vast majority of companies in England, the liability of shareholders is limited: shareholders are liable to pay for their shares, but they are not liable for the company's debts.  

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Associate Member Article

 

 

 

 

Payment of Head Office Overheads in a Loss and Expense Situation

Published May 2017 

Loss and expense is a means by which a contract can cater for payment of monetary damages.  Where a contract permits a claim for loss and expense, the contract administrator or architect or engineer is normally authorised to award money in that respect.  Without such authority, payment of these monetary damages would only be made with the approval of the employer or following an award of court or of an arbitrator (or through an adjudicator’s decision).

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AGM & Luncheon

 

 

RAF Club|128 Piccadilly|Mayfair|London|W1J 7PY 

 

AGM & Luncheon September 29th, 2017

We are pleased to announce that we are holding the 2017 AGM and Luncheon on September 29th at the prestigious RAF Club in Mayfair London.

As the event is on a Friday, enjoy a long weekend in London; visit the theatre; see the sights. Why not bring the family too: all are welcome at the luncheon.

Contact Katy and reserve a place today!

This email address is being protected from spambots. You need JavaScript enabled to view it.

Reservation Form

luncheon Menu

Tel: 01252 624763

 

 

 

PQQs - Money Making Scam?

Published 21st April 2017 

Is it not time that the Pre – Qualification money making scam is ended?

Not only do specialist contractors have to deal with late payments, reduced margins and not getting fully paid, they are forced to participate in a pre-qualification process which is incredibly time consuming, exorbitantly costly and completely unnecessary. The process thrives on duplication and is required by Main Contractors to keep specialist contractors on their Approved Contractor lists. So, why don’t Main Contractors get together and develop forms/processes that are acceptable to all? Sounds simple, well yes, it is, if there was a will to do it. Of course, the more intuitive question would be, will Main Contractors willingly cease this money-making enterprise? And the predictable answer is, no they won’t!

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Specialist Contractors hit by £1.9 billion bad debt provision per year!

Construction Charter - Still a Massive Flop!

Published 10th February 2017

We at the Confederation read with interest the recent government white paper; ‘Fixing our broken housing market’. Leaving aside the indirect admission that government housing policy has failed over many decades, we noted the reference to the ‘Farmer Review’ (P. 41), “This is an important moment and we should make the most of the opportunity for industry to invest in its workforce, alongside tackling the issues raised by the Farmer Review. The larger companies need to take responsibility for ensuring that they have a sustainable supply chain, working with contractors to address skills requirements”. Well yes, we agree! The Farmer Review highlighted how specialist contractors are unfairly treated whilst working as part of a supply chain:

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Main Contractors Reduce Payments to Subcontractors - No Surprise There!

Published 21st January 2017

Referring to the Construction Enquirer article ‘Subbies under attack from new breed of aggressive QS’ (20/01/2017) it states, “Subbies are coming under pressure on site from a new breed of “super aggressive” quantity surveyors employed by main contractors...it’s pretty depressing at the moment. There’s certainly a new breed of younger QS who are drilled by the main contractors to get back what they can". However, to be fair to Main Contractors, this is not new, they have always been very successful at reducing payments to subcontractors. They rely on the fact that many subcontractors do not fully understand the implications of the contracts that they sign.

Main Contractors very effectively exploit subcontractor liabilities. However, contracts are not just one way. Subcontractors should use them to receive fair payment. Starting at the beginning, Subcontractors should refuse to accept spurious clauses in contracts which have been added by the main contractor.

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Subcontractors - Late Payments: Still Biggest Threat!

Published 7th December 2016

It is pleasing to note that “large companies will be required to publish details on how quickly they pay their suppliers, under draft regulations released by Small Business Minister Margot James” (Construction Enquirer 6/12/2016). Although a year later than originally promised, it is still pleasing nonetheless. We must wait to see if payment practices improve because of these regulations. However, we at the Confederation of Construction Specialists are sceptical and not convinced. The onus is on the main contractor to improve bad practice because they must report twice yearly on their payment practices under the ‘Duty to Report Rule’. However, main contractors already know of the hardship they cause and being deterred because they should report it does not seem like a deterrent at all.

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We are really pleased to announce that the Confederation has been recognised for its Support Services and has been awarded: -

Best Construction Sector Contracting & Financing Advisory - United Kingdom Award for Excellence in Support Services by BUILD Magazine.

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Farmer Review - Recognises Unfair Payment Practices for Specialist Contractors!

Published 17 October 2016

The well-received Farmer Review of the UK Construction Labour Model, has identified many unjust payment practices that specialist contractors are unfairly subjected to and must contend with whilst contracting as part of a supply chain:

  • "...multiple on-costing, downward and often inappropriate risk transfer" (p.17)
  • "...Clients tend to fixate on lowest initial tendered price and this is often perpetuated by their advisors, who, in a traditional procurement model, are implicitly employed (at least partly) to manage a fixed and adversarial transactional interface between clients and industry" (p.24)
  • "...The multiple and tiered sub-contracting interfaces within the industry and between industry and its clients has generated a further non-value add process whereby some businesses higher up the supply chain will use other businesses’ money lower down to temporarily support and enhance their own cash flow." (p. 24). I guess this may be the answer to why the Robertson Group are predicting the rebalancing of margins if project bank accounts become commonplace:

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Specialist Contractors Need Lower Thresholds on Project Bank Accounts!

Published 8 October 2016

It has been widely reported that the Scottish Government, on public work projects, to protect subcontractors from insolvency and payment abuse, is introducing Project Bank Accounts. Clearly this is a step in the right direction. However, it does not go nearly far enough to protect Specialist Contractors from payment abuse.

Project Bank Accounts will be a requirement from October 31 on building projects over £4m and civil engineering projects over £10m in Scotland. However, we at the Confederation of Construction Specialists believe these thresholds are far too high and do little to protect the most financially vulnerable members of a Main Contractor’s supply chain. It is obvious to us that there should be Project Bank Accounts operating on all projects (Government and Private) with a project value in excess of £1m.

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Fair Payment Terms for Specialist Contractors!

Published 21 September 2016

Referring to the Dunne Group collapse, SNP MP Martyn Day, according to the Construction Enquirer, has asked for a “… ministerial statement or debate in Government time on what steps the Government is taking to ensure better payment standards for contractors”. Well, we at the Confederation of Construction Specialists can think of a few steps that should be immediately taken to ensure better payment standards for specialist contractors:

  • Automatic compensation (at a punitive rate) for any late payment receipt (beyond agreed terms).

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