The pig-headed behaviour of some trade associations is wasting a priceless opportunity to reform the Construction Act to everyone’s advantage
There are times when I am embarrassed to be an official working on behalf of the construction industry – which is an odd thing to say when I’ve been doing it for nearly 30 years. This is such a time.
An opportunity has arisen to improve the act of parliament that governs payment practices and gives a statutory right to adjudication. These opportunities don’t come along very often. Take, for instance, the act of parliament governing the statutory registration of architects. This has been problematic since it first came to be in 1931, but has been amended just twice since then.
The Construction Act, on the other hand, is just 11 years old, but throughout the last decade every part of the industry has both welcomed it and wanted to improve it. Then, in 2004, Gordon Brown announced in the Budget that the act would be reviewed.
Three years later and we have a final consultation paper on the proposed reforms, accompanied by a clear commitment to try to find the parliamentary time to make the changes. The hard work and dedication of a couple of civil servants has been repaid by the genuine support of Margaret Hodge, their minister, but she has now moved on. If the legislation is drafted well – which is a big “if” – the proposals will answer three of the worst problems with adjudication: firms will not be able to avoid it by augmenting the contract orally, or by declaring that interim decisions are final, and they will not be able to write into contracts that the referring party has to pay all the costs of adjudication irrespective of the outcome. Eradicating these three abuses alone is worth all the effort.
There is still little agreement in the industry about the proposals to reform the payment processes, but in steering a careful line between the excessive demands of the trade associations, the proposals look to be an improvement on what we now have.
If the industry doesn’t squarely support the proposals for reform outlined in the consultation then it won’t happen
This brings me to my embarrassment. There is a brief window of opportunity to make these improvements, and a very slight chance that it might happen. The civil servants are committed to change, and they appear to have their own lawyers on side with what they are proposing. And they have had a strong ministerial steer.
They also have a duty to consult, and this is where it’s all likely to go wrong. The sectors of the industry that most want this reform are not satisfied with how far it goes, even though it will be better than what we have now. Despite the fact that ministers would have to agree the actual legislative intent long before the Queen’s Speech in November – and the deadline for this consultation doesn’t end until mid-September – they still feel that they can load back into the package all the things that have been taken out.
But they were taken out for a reason. If the industry doesn’t squarely support the proposals outlined in the consultation, then they won’t happen. What minister in their right mind would take a punt at carrying legislation to intervene in the way business is done in an industry when that industry can’t agree on the intervention? And how long before the next opportunity comes along?
Some trade association officials don’t seem to understand the practical realities of parliamentary procedure. They seem to think that if they keep shouting loud enough, they’ll get what they want. What they will succeed in doing is killing off this once-in-a-blue-moon chance, and deny their members the benefits of the reforms we can all agree on.
At the end of one of my favourite films, Now Voyager, Bette Davis says to Paul Henreid, “Why wish for the stars, when we can have the moon”. It’s a motto that some trade bodies would do well to bear in mind.
Graham Watts is chief executive of the Construction Industry Council and chair of the constructon umbrella bodies’ adjudication task group