The Week That Was - 20 January 2023
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
Kier fined £4.4m at Manchester Crown Court
Kier was fined a total of £4.415m and ordered to pay costs of £80,759.60 at Manchester Crown Court on 12 January 2023. The fine relates to two incidents that occurred during overnight roadworks between junctions 16 and 18 of the M6. Both incidents relate to power cable safety breaches.
Kier pleaded guilty to breaching Sections 2(1) and 3(1) of the Health and Safety at Work etc. Act 1974 (the Act) in relation to this first incident. For this second incident, Kier pleaded guilty to breaching Section 3(1) of the Act and Regulation 13(1) of the Construction (Design and Management) Regulations 2015.
The Health and Safety Executive (HSE) found inadequate planning from Kier meant the vehicle used in the first incident was unsuitable, despite other more suitable vehicles being available. In the second incident, the workers were unaware of the overhead hazards.
HSE inspector, Mike Lisle said: "This is a significant fine reflecting the seriousness of the failures here. The company's failure to plan the work properly and provide an adequate risk assessment put its workers and those using the motorway in significant danger."
For more information, please see here.
Charity launches judicial review proceedings for proposed A57 Link Roads Development
On 16 November 2022 the A57 Link Roads (previously known as Trans Pennine Upgrade Programme) application was granted development consent by the Secretary of State for Transport. The purpose for the development is to, among other things, improve traffic flow, reduce congestion for Mottram and Hollingworth and to improve the flow at Junction 4 of the M67.
The countryside charity, CPRE, has launched judicial review proceedings last week following the Development Consent Order and say "We are challenging the decision made by the Department of Transport’s Secretary of State, Mark Harper, to consent the scheme. The case questions the government’s unlawful approach of allowing large road schemes to go ahead without assessing the cumulative impact of carbon emissions, and of failing to consider alternatives which would avoid harming the Green Belt, the National Park and the climate."
The DfT has not commented due to ongoing legal proceedings.
For more information, please see here.
Housing Slowdown blunts construction output, ONS data says
A report by the Office of National Statistics (ONS) has shown that private housebuilding work fell by nearly 5 percent and private housing repair and maintenance fell by nearly 2 percent in November. This was in response to the post mini-Budget drop in demand from homebuyers, according to the latest official construction output figures.
The private housing sector saw a £172m drop in output in the month, to just over £3.4bn, making it the largest negative contributor to what was flat growth in the month for construction overall. With public housing output also falling by 5.3 percent to £416m in the month, the overall drop in housebuilding output was 4.9 percent, to £3.8bn. The ONS data showed other parts of the construction sector saw month-on-month growth, allowing the industry to post flat growth overall. Seasonally adjusted, the volume of worked remained at almost exactly £15bn.
For more information, please see here.
Persimmon pauses site openings as it says it is too early to predict when a recovery in the housing market might occur
Persimmon, the UK's most profitable housebuilder, has stated that it has paused or renegotiated terms on around 30 developments, as it says it is too early to predict when a recovery in the housing market might occur.
It completed the sale of 14,868 new homes in 2022, an increase of 15 percent on the previous year. However, in the second half of the year, rising interest and mortgage rates, inflation and weaker consumer confidence began to impact customer behaviour across the housing market. This had a sharp impact on the group's private sales rates in the fourth quarter and will have an adverse impact on the outlook for 2023. Taking together the absence of Help to Buy and the increase in mortgage rates, Persimmon estimates that the monthly cash cost of mortgage payments for some first-time buyers has approximately doubled over the past year, compounded by limited availability of high loan-to-value mortgages
For more information, please see here.
Net Zero Review: UK could do more to reap economic benefits of green growth
The UK is currently committed to achieving net-zero carbon emissions by 2050, as well as a 68 percent reduction in emissions compared with 1990 levels by 2030. Former Energy Minister Chris Skidmore has recently published his Net Zero Review.
The report highlights that infrastructure is a key factor that will unlock net zero. However, abrupt changes of policy in recent years and a "lack of clear roadmaps", have led to projects having to compete for the same pool of labour and materials leading to bottlenecks. The MP said; "this is compounding the skill and material problems already seen throughout the built-environment sector." The report details that the UK faces a huge challenge to make the transfer to net-zero possible and "supply chains and skill pools will need to grow significantly to meet demand over the coming years".
For more information, please see here.
For further discussion on this topic, please listen to the following podcast in which Peter Mansfield and Peter Bossard discuss climate activism in the insurance industry:
https://feeds.acast.com/public/shows/insurance-covered
St James’s Oncology v Lendlease: the value of project-specific amendments to JCT contracts
Our transactional construction team's latest blog, first published on Practical Law Construction, highlights the benefits of project specific amendments to the JCT standard form contracts following the recent judgment of St James's Oncology v Lendlease.
To read the blog, please see here.
Thanks to Georgina Haynes, Gareth Jenkins and Arash Rajai for contributing to this week's edition.
Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice. We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date. You should seek legal or other professional advice before acting or relying on any of the content.