November has dealt a double blow to the sector – here’s what would help
Autumn has set in and the mood in the construction market has taken a seasonal turn for the worse too. Sentiment among many businesses has been bobbing along the bottom all year, but two recent events have put a real dampener on everyone’s spirits.
First came a rare pre-Budget speech from the chancellor on 4 November – and with it, a refusal to rule out further tax hikes. Cue another drawn-out period of speculation, weeks before the actual fiscal decisions land.
At the same time negative headlines hit elsewhere: Assent Building Compliance, one of the UK’s biggest private building control firms, had gone into liquidation.
Construction insolvencies are nothing new, but the collapse of a key building control player is a serious concern. Thousands of projects now hang in the balance. Delays in building control approval seem inevitable, increasing the risk of additional costs and contractual disputes.
Reeves may be trying to control the narrative, but what happens is simply that firms put important decisions on hold
The Health and Safety Executive has said all non-higher-risk building (HRB) projects will revert to the relevant local authority, unless the project owner chooses to find an alternative registered building control approver.
Already there are complaints around the tight time constraints involved, and there are real questions about the capacity of local authority building control services taking on all this extra work.
Of course, many councils will be actively looking to take on former Assent staff to try to ensure as much continuity as possible and the hope has to be that this latest business collapse does not cause building inspectors to leave the industry all together. Posts on LinkedIn reveal a sector really trying to rally round with offers of help and support.
The larger higher-risk buildings should be less affected because they come under the Building Safety Regulator’s (BSR) remit. Still, the regulator says it is aware of 10 of these projects that were held by Assent under the “pre-HRB transition model”. So just at the point when the regulator is desperately trying to make in-roads with its gateway 2 workload, it now has a bunch more schemes on its hands.
Statements from the regulator have sought to reassure a nervous industry, saying it is confident there will be no negative effect and it is in touch directly with the inspectors working on the affected projects.
>> Also read Simon Rawlinson on the chain reaction associated with the collapse of Assent
For sure, the regulator is in a better position than it was just a few months ago. Subject to a wide-ranging package of reforms announced by the housing ministry in the summer, the BSR benefited from a change in management when its new chair Andy Roe took on the role in July. He has impressed the industry with his proposals to clear the backlog of 90 schemes at gateway 2 by January next year. He also aims to cut the approval times from 48 weeks in London (43 in the rest of the country) down to just 12 weeks.
Measures such as a fast-track innovation unit for new HRB applications, bringing in account managers for major developers and issuing guidance to help applicants ensure submissions are valid are all designed to speed up decisions. But having committed to unblocking the system, the BSR is now under real pressure to actually deliver.
Eyes are also on Rachel Reeves as we all wait to find out if she will or won’t hike income tax on 26 November, a date that is so late it barely meets the description of an autumn Budget. This waiting game has been described by housebuilder Vistry in trading as “unhelpful”, and you can see why.
Reeves may be trying to control the narrative – or “roll the pitch”, as the pundits put it – but what happens is simply that firms put important decisions on hold. Understandably, they would rather commit to investments, large or small, with as much knowledge as possible of where the government axe might fall.Two cost consultants, Exigere and Core Five, have pointed to the impact of this hiatus, highlighting that the industry has been in limbo since the start of September when the government confirmed the Budget date. Nearly 12 weeks is a long time to be in limbo.
All this economic and political instability saps at demand, as we heard from the Construction Purchasing Managers’ Index which showed October’s construction output down again, for the 10th month in a row.
Now more than ever, construction businesses need some certainty. This is an industry that has shown remarkable resilience over the past few years; that must now be matched by clarity from government and action from regulators.
In the spotlight
In a month dominated by uncertainty and upheaval, the Building Awards delivered a rare – and much-needed – moment of celebration. They reminded us that even in the toughest conditions, exceptional people and projects continue to shine.
As ever, the volume and calibre of entries were impressive, showcasing inspiring examples of quality and innovation from across the construction industry. (You can read more about the finalists and winners here on building.co.uk.)
These awards don’t just recognise achievement – they spotlight what’s possible when hard work, determination and talent come together. It’s an uplifting message at a time when the sector needs it most.
Chloë McCulloch is the editor of Building
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