The Week That Was - 26 May 2023
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
The Fit-Out Problem
Our construction and real estate team have recently contributed an article on Practical Law considering the insurance strategy of fit-out works. The article looks at the complexities of managing existing structure risk, the approach to working in an existing building in the JCT standard forms, and tenant risk to the landlord for fit-out works under leases and licences to alter, as well as commenting on recent case law on these issues.
You can read the article here.
NHS Wales has begun its search for contractors to work on £592m of work
The current framework (which covers work contracts exceeding £4m) expires in April 2024. Therefore, NHS Wales is now looking for supply chain contract partners for £592m worth of work over four years.
The framework is divided into two lots. Lot 1 covers major projects valued at more than £20m and is expected to offer a £237m work pipeline. Lot 2 is for projects worth between £7m and £20m, with a work pipeline of £355m.
Four contactors will be appointed to each lot and interested firms may submit a tender for either or both lots. Firms have until 21 June to express an interest.
For more information, read here.
RIBA's Future Trends survey
The Future Trends survey is completed monthly and focuses on areas in which members may face potential difficulties, with the view of identifying implications for the profession.
In the most recent survey, architects report cancelled projects as a result of delays in the planning process. However, it is reported that the outlook for future work remains positive, with 28% of practices expecting workloads to increase in the coming months and 51% expecting them to stay the same. Practices who participated in the Future Trends Survey also expect more work from the commercial sector.
For more information on the 2023 reports, click here.
Legally binding Code of Practice for cladding remediation works proposed
In March 2023, the Housing Minister, Stuart Andrew, joined calls for a code of practice for cladding remediation works, and a code is expected to be published in Summer. However, on 9 May 2023, the MP for Ipswich, Tom Hunt, said the code needed to be legally binding and there should be penalties if contractors disregard it. Mr Hunt has tabled a private members bill to make provision for a statutory code of practice to set standards for cladding remediation works in occupied buildings. The code will control the type of material used to cover buildings while they are being reclad, require there to be adequate communication with residents and provide for the relocation of residents if it is felt that the works are too detrimental on the residents' standard of living. The bill will have its second reading on 24 November 2023.
To read more, please click here.
Uncertainty over second-staircase policy reportedly delaying the construction of more than 123,000 homes
Lambert Smith Hampton (LSH) and Connells say their research shows that more than 123,000 London homes are at risk of being "delayed or mothballed" due to the lack of clarity around London Mayor Sadiq Khan's second-staircase policy.
At present, Approved Document B does not set a threshold above which more than one staircase must be considered. In December 2022, the Department for Levelling Up, Housing and Communities (DLUHC) launched a public consultation on proposals to amend Approved Document B to, inter alia, require two staircases in residential buildings which are higher than 30m. The consultation closed in March 2023, and the results are still awaited. However, in February 2023 the London Mayor announced that all planning applications which involve residential buildings above 30m in height will need to have two staircases.
To read more, please click here.
More job losses on HS2 as route out of Birmingham finalised
Following the Government prioritising the HS2 route between Old Oak Common in London and Birmingham Curzon Street, work on the route between Curzon Street and Handsacre in Staffordshire, where HS2 was set to join the existing West Coast Main Line, is being slowed. Construction of Phase 2a of HS2, between the West Midlands and Crewe, is also set for a two-year delay.
The number of jobs under threat as a result has not been confirmed, with firms working on the previously intended Euston terminus for HS2 (which now faces considerable doubt as to whether it will be built) already paring back costs. The architect Grimshaw, which was working on the design of the new Euston station, has confirmed it is making redundancies as a result of the mothballing of the scheme, with up to 100 roles said to be at risk. The decision to rephase the project came after costs of the redesigned Euston station increased from £2.6bn to £4.8bn.
Phase 1 of HS2 (between London and Birmingham) is currently anticipated to be operational between 2029 and 2033.
To read more, please click here.
Landsec pressing ahead with London developments
The developer Landsec has confirmed that work on replacing a 1980s office building on the banks of the River Thames with a new £310m development is expected to begin in the first half of 2024. The building is due to be completed in 2027, and will include office and retail space, together with a new public space. Landsec has also confirmed that it expects to start work imminently on two other projects in London, including a £400m project at Timber Square in Southwark, and the £130m refurbishment of a 1960s office block, Portland House, in Victoria.
The news comes as Landsec posted a £622m pre-tax loss for the year ending 31 March 2023 (down from a profit of £875m in 2022). Landsec is now forecasting a shortage of Category A office space in 2025, giving it the confidence to press ahead with these schemes, despite increases in the original build estimates caused by industry-wide cost inflation.
To read more, please click here.
Authors for this week's edition: Ellen Ryan, Jonathan Carrington, Arash Rajal and Jon Ely.
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.