The Week That Was - 6 October 2023
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
Cancellation of the Manchester leg of HS2
On 4th October, the Prime Minister announced that the remainder of the HS2 project is to be cancelled, promising to reinvest the remaining budget of £36bn into hundreds of "new" transport projects.
Rishi Sunak pointed to the repeated delays and escalating budgets as key reasons behind the decision, citing that costs had "more than doubled" over the project's lifetime.
The decision was met with frustration in the construction industry, with the Civil Engineering Contractors Association expressing scepticism at the Prime Minister's pledge to reinvest the budget in further transport schemes.
Allan Wilen, Economic Director of Glenigan, remarked that the decision will not only negatively impact those contractors involved in the project, but undermine stability and certainty across the construction sector.
For more information, please see here.
High Court decision that adjudication decision was unenforceable for apparent bias.
In the case of AZ v BY [2023 EWHC 2388 (TCC), Mr Justice Constable granted the Defendant a declaration that an adjudicator's decision was unenforceable for apparent bias arising from the erroneous consideration of 'without prejudice' material. The written judgment records that an error as to the admissibility of 'without prejudice' material is an error of law that could potentially impact the fairness of the decision-making process in accordance with the rules of natural justice. The key issue was not whether the decision was significantly founded upon the 'without prejudice' material but whether the deployment of such material gave rise (objectively) to a fear of lack of impartiality.
A copy of the full judgment can found here.
Construction Leadership Council (CLC) plans to boost construction productivity by 25%
The CLC have unveiled a new report containing several new proposals which are estimated to increase productivity in the construction sector by a quarter.
The report outlines the actions required by industry, Government and project leaders, over three "headline areas" of better preparation, better building and better business.
The CLC's 'better preparation' plan looks to improve productivity by 17% alone, and includes measures such as resolving challenges faced in the planning system, integrating teams at the outset of planned projects, and adopting a collaborative design approach.
The 'better building' and 'better business' parts of the CLC's plan includes greater utilisation of modern construction methods, improving training and retention of construction workers, and facilitating greater access for smaller businesses to digital tools to reduce administration time.
The full report is available to read here.
Department for Business and Trade (DBT) announces plans to tackle late payments
The DBT has announced tougher measures to help reduce the late payment of commercial invoices, to reduce the difficulties particularly faced by small businesses looking to grow. These measures include:
- Expanding of the Reporting on Payment Practices and Performance Regulations 2017 (SI 2017/395), with the aim of improving the transparency in order to eradicate bad payment practices.
- Extending the Small Business Commissioner's powers by passing primary legislation that will enable the Commissioner to conduct investigations and publish reports.
- The voluntary Prompt Payment Code will now require businesses to reaffirm their commitment every two years in order to stay in the scheme.
These measures are hoped to foster a stronger payment culture, to improve the predictability and reliability of business cash flows.
For more information, please see here.
£96bn investment in water infrastructure by 2030
Water companies will be investing £96bn in an effort to modernise water infrastructure. The investment will go towards building new reservoirs, reducing leakage and upgrading sewers, as well as improving biodiversity.
The project no doubt results from increased pressure on water companies to ensure they maintain the quality of rivers and seas, which have suffered from sewage contamination.
The investment will be funded through an increase to consumer bills which is likely to be met with some criticism particularly as £1.7bn of funds previously set aside for these upgrades went unspent.
Click here to read more.
The future of nuclear reactors
The Government has run a competition to find new designs for Small Modular Reactors (SMRs), which are smaller nuclear reactors that can be made in factories.
EDF, GE-Hitachi Nuclear Energy International LLC, Holtec Britain Limited, NuScale Power, Rolls Royce and Westinghouse Electric Company UK Limited have been selected to bid for government contracts.
The Government states that SMRs will help the UK deliver cheaper and cleaner energy. This is a priority for the country in the aftermath of hugely increased energy bills.
Click here to read more.
Construction Inclusion Coalition launched to improve diversity in the construction sector
A number of leading construction firms and institutions including Travis Perkins PLC and Wolseley have come together to launch the Construction Inclusion Coalition (CIC) in a bid to combat the lack of diversity in the sector.
Current statistics show that the construction industry is falling behind other sectors in terms of representation, with women making up just 15% of the workforce, while only 6% of workers are from ethnic minority backgrounds. The CIC's first mission is to improve gender representation in the industry.
CIC chair and Toolstation managing director, Angela Rushforth, said: “There is no doubt that the future of our industry is at risk if we don’t create an environment where all our colleagues feel safe, empowered and confident. I want all young women to see the construction sector as I do – full of opportunity.”
For more information, please see here.
High Court grants disqualified director interim permission to act following construction company competition disqualification undertaking
The Competition and Markets Authority (CMA) has published a High Court order allowing Mr Brown, a director of the construction company Brown and Mason Group (BMG), continued interim permission to act as a director pending the outcome of his High Court permission application.
Mr Brown was disqualified by the CMA for engaging in anti-competitive arrangements in the supply of certain construction services, following which the CMA accepted a competition disqualification undertaking from Mr Brown preventing him from acting as a director for a period of seven years.
Mr Brown has since applied to the High Court for permission to continue to act as a director of BMG. Until the High Court hearing has concluded, he has interim permission to act as a director, subject to certain conditions including not acting as a director for another company.
The Practical Law article can be found here (subscription required).
Authors for this week's edition: Laura Sponti, Dominic Barnes, Hannah Kendall and James McKay
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.