News | Published April 07 2020

EXCLUSIVE Developers and construction firms respond to Covid-19 challenges

Just today, it was reported that the UK construction sector saw its worst month since 2009 in March.

There is no doubt -- whoever you speak to -- that housebuilding, property development and construction are all suffering because of the Covid-19 pandemic. A site-based, labour-intensive industry will categorically suffer as a result of social distancing measures -- that, unfortunately, is unavoidable.

And just a week ago, The Parliamentary Review reported fears that housebuilders were becoming "forgotten again" with no financial support to help frozen sites with large overheads.

There's no doubt that these are trying times for British construction. John Cockerton, of construction firm Conneely Group, specifically asked that "the government speaks clearly on the issue of construction work continuing".

"They have used clear language for NHS sites," Cockerton told The Parliamentary Review. "But key worker housing for the police, London transport and NHS workers is just as important.

"And then you have student accommodation -- which needs to be ready for those starting their studies in the autumn. Surely it is vital that they are not displaced for the sake of a few artic material loads being delivered to site?"

When asked about the industry more widely, Cockerton noted that "restarting from a dead start" would be "unnecessarily difficult and costly".

"Construction contributes £23 billion a year to the UK economy as an epicentre which virtually every other form of business feeds from," He said. "It must be protected."

Ryszard Kawak, of Townsend & Renaudon Chartered Surveyors, explained why Covid-19 and social distancing measures took such a toll on the sector.

"The construction industry is unique," Kawak told The Parliamentary Review. "The men on the ground who undertake all the work on building sites have been told they cannot work.

"The builders' merchants and key material suppliers -- who provide things like concrete, sand and other aggregates -- have all closed their doors, preventing many of the self-employed contractors from being able to work.

"This isn't just a problem for construction, either -- we're seeing this with plumbers and electricians, too, many of whom also provide maintenance services to hospitals.

"If there is no work on sites -- the key driver of our industry -- there will ultimately be a backbite on the rest of the country."

For others, however, it is simply the lack of clarity which is proving to be an issue.

A week or two ago, Michael Hockley, of Roof-Link Industrial and Commercial Ltd, told an editor that most of the government's announcements regarding the sector had "lacked clarity".

"On the morning of March 24, Michael Gove said that construction sites could stay open," Hockley said. "I then see, on Sky News, a site -- I think managed by Mace -- where people are standing in groups and not observing social distancing principles. This is absolutely diabolical.

"Some of our workers won't go onto site because they are worried about potentially infecting vulnerable people in their households. Others want to work, but want assurances that social distancing will be observed by everyone on-site -- which is easier said than done.

"The way in which the UK government has handled this is piecemeal and frankly not good enough. The construction industry should have been on lockdown much sooner -- as it stands, construction work is still ongoing."

And while many firms are expressing concern about employees and those working on-site, Steve French of Taylor French Developments raised a pertinent point about directors and senior staff members with regards to furloughing and the Job Retention Scheme.

"The scheme caps the government grant for employees at £2,500 a month -- equating to a maximum salary of £30,000 a year; £37,500 if paid at 100 per cent.

"Many senior managers and directors in the construction industry are on salaries of as much as £100,000 a year. They will likely be made redundant, as businesses cannot cover the gap between £30,000 and £100,000 per employee.

"This then means that many firms will lose managers and directors who help keep the business running, and many of those will have to fold as a result. All those jobs the government is trying to protect could then be lost anyway."

French is also concerned that furloughing employees is easier said than done.

"Negotiations about furloughing employees can cause long delays for each employer in claiming the 80 per cent salary to pass on," He said. "This then means the employee is without earnings for a longer period, which in turn causes them further hardship."

There is no doubt that life in the construction industry is complex at the minute. One can only hope that the pandemic -- and the economic fallout it causes -- is over as swiftly as possible, allowing housebuilders and construction firms to carry on building again.

You can read more from each representative in their best practice articles, which can be found by clicking the following links: Conneely Group, Townsend & Renaudon Chartered Surveyors, Roof-Link Industrial and Commercial Ltd, Taylor French Developments.

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The Parliamentary Review

April 07 2020

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