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Out-Law News 2 min. read

Coronavirus: construction industry calls on UK government for support

The UK’s construction industry bodies have written a joint letter to government calling on support to keep construction sites open during the coronavirus pandemic.

In a letter (3 page / 84.4KB PDF) to prime minister Boris Johnson, the Construction Industry Council (CIC), together with the Civil Engineering Contractors Association, Build UK and the Federation of Master Builders, asked the government to help keep construction sites operational “in order to avoid many thousands of job losses, the closure of thousands of businesses and delays and cost increases on crucial programmes and projects”.

The industry bodies warned the construction sector was vulnerable to fluctuations in workload that could result from an enforced shut down of sites and projects, due to large numbers of self-employed contractors, the complexity of delivering large projects, and the “vulnerable cash position” of many businesses involved in construction.

It called on government to ensure that all sites can remain open as long as they are able to do so “responsibly’; to instruct all public sector clients to pay contractors and the supply chain; and to consider implementing measures such as the deferral of VAT and pay-as-you-earn payments to reduce the burden on business.

Construction law expert Jonathan Hart of Pinsent Masons, the law firm behind Out-Law, said the government should make swift steps to help the industry.

“Things are obviously moving very fast in relation to Covid-19. Even so, amongst the announcements from government, such as the Treasury offer of support in emergency funding and Department of Education in relation to support for key workers, there was an absence of reference to the UK’s construction and construction services sector,” Hart said.

“Industry responses such as that from the Construction Leadership Council and Build UK have highlighted the government’s silence in this respect. With sites grinding to a halt, weakened supply chains in need of serious support and facilities management providers struggling to provide essential support, it is essential that specific and targeted measures are put in place as a matter of urgency,” Hart said.

The Association for Consultancy and Engineering (ACE) has also written to the government, sending a letter (2 page / 126KB PDF) to chancellor of the exchequer Rishi Sunak last week. ACE welcomed the chancellor’s commitment to an “infrastructure revolution” outlined in this month’s Budget, but said the impact of the coronavirus meant that the infrastructure sector risked losing the capacity to support the government’s long-term ambitions.

It asked for targeted support in critical projects instead of a cash flow bailout, with suggested actions including making grants of up to £50,000 available for small and medium enterprises to meet the digital requirements of remote working. Over the next months, ACE said the government should accelerate the development phase of public sector programmes such as schools, hospitals and roads to mitigate a downturn in private sector projects.

Longer term, ACE said the government should publish a clear pipeline of projects in the autumn to stimulate the wider economy. It also suggested the government should provide tax incentives for the housing sector and create further city deals to devolved mayors to encourage private sector development.

The Construction Industry Training Board (CITB) has also reacted to the coronavirus outbreak, announcing a raft of measures to protect skills for when the pandemic dies down. The CITB said it would support apprentices to secure their future; help compile a list of support agencies that will advise on staff issues and other business support, including sick pay; produce guidance and other learning materials to keep sites running; and encourage site managers to show lenience to those with site safety cards expired from mid-March.

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