The Week That Was - 24 March 2023

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

SSE to invest £100m into giant hydro scheme

The proposed scheme at Coire Glas in the Highlands consists of a dam and two reservoirs.  It would double the UK's ability to store energy for long periods, helping to tackle climate change and improve UK energy security. 

SSE wants assurances from the UK government before signing it off, and it hopes to make a final investment decision next year.  If it goes ahead, completion is expected in 2031.

Professor Keith Bell at Strathclyde University said the proposed scheme would help to reduce the UK's reliance on imported gas.  Russia is the world's largest gas exporter, so this would be a benefit following Russia's invasion of Ukraine.  However, Professor Bell also comment that "we need a lot more energy storage capacity to get rid of fossil fuels completely". 

For more information, please see here.

Construction industry leaders' respond to Spring Budget

Construction industry leaders have given their thoughts on the Spring Budget, released by the Chancellor, Jeremy Hunt, on 15 March 2023. 

Dr David Crosthwaite at the Building Cost Information Service says, "the announcement that five construction occupations will be placed on the Shortage Occupation List is a beacon of hope in an otherwise underwhelming Spring Budget."

Simon Rubinsohn at RICS says, "RICS is disappointed by the lack of housing ambition in this budget." He also commented that “there is merit in revisiting the stamp duty system."

Russell Dean at Mitsubishi Electric Residential Product Group says, "more long-term viable solutions for reaching Net Zero would have been welcomed."

Graham Harle at Gleeds says, "we wanted three things – help to alleviate critical labour shortages, guarantees on infrastructure spending, and tax incentives to impact carbon reduction refurbishment of residential and commercial buildings.  What we got was promises of more enterprise zones, investment incentives for mini nuclear power projects and tax breaks for capital expenditure investment.  These are all welcomed and admirable but long-term aspirations are not short-term fixes."

For more information, please see here.

Government defines "higher risk building"

The Building Safety Act 2022 (BSA) concerns the safety regime for higher risk buildings, and includes separate definitions of the term "higher risk building" for (i) the design and construction phase, and (ii) the occupation phase, of a building.  The Higher Risk Buildings (Descriptions and Supplementary Provisions) Regulations 2023 (the Regulations) refine those definitions. 

The Regulations define a "higher risk building" during the design/construction and occupation phases as including buildings of at least 18m in height or at least seven storeys, which comprise two or more residential units.  Secure residential institutions, hotels and military barracks are excluded.  However, different regimes apply to the different phases. During the design/construction phase, the definition includes care homes and hospitals, even though they are excluded during occupation.  The reason for this is that care homes and hospitals are workplaces when operational, and therefore, at the occupation phase, are subject to a separate safety regime (under the Regulatory Reform (Fire Safety) Order 2005).

The Regulations also include a definition of "building" for the purposes of the relevant legislation and set out how to measure the height and number of storeys of a building.  The Regulations come into force on 6 April 2023.

For more information, please see here.

Developer remediation contract deadline passes

The Government wrote to developers on 30 January 2023 asking them to sign a contract - the newly-published developer remediation contract – by 13 March 2023, committing them to remediating unsafe buildings which they developed.  The contract requires developers to (i) take responsibility for necessary work to address life-critical fire safety defects arising from the design and construction of buildings 11m and over that they developed or refurbished in England over the last 30 years; (ii) keep residents informed of progress; and (iii) reimburse taxpayers for funding spent on remediating their buildings. 

The Government has confirmed that 39 developers signed the contract by the 13 March 2023 deadline, and that 11 have not yet done so.  Non-signatories have been threatened with exclusion from the English market, with the Government saying it will create a Responsible Actors Scheme (RAS) from which those that haven’t signed will be excluded.  More information on the RAS is expected shortly. 

For more information, please see here.

Builder fined £175,000 after breaching health and safety law

In March 2019, a worker was cleaning a concrete-pump's hose when it became blocked, leading to a release of pressure that caused the hose to whip the worker in the head.  The worker suffered brain trauma and spent 7 months in hospital following the incident. 

Singh Will Mix It Ltd has been found guilty of breaching health and safety laws and has subsequently been fined £175,000 and ordered to pay £75,722 in costs.  The Health and Safety Executive found that Singh Will Mix It Ltd did not have appropriate health and safety systems in place and failed to make sure workers had the necessary skills, knowledge, experience and training for their work. 

For more information, please see here. 

New report shows positive signs for global construction industry 

A new study by economists at Oxford Economics predicts the UK is set to be the fastest growing country for construction in Western Europe over the next 15 years.  The report known as the Global Construction Futures suggests global construction work is to grow by £3.5 trillion within that period. 

This growth is expected to be underpinned by superpowers China, the US and India, accounting for 51% of all construction work done globally by 2037.  The UK's input is expected to be driven by large mega infrastructure projects, including the transition of Britain's power networks to renewables by 2035. 

If you would like to read more on this report, please click here.

Thanks to Oliver Bulleid, Amy Taylor, and Emma Higgins 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.