Th e construction sector’s

MONEY MATTERS

Th ere is £3 billion worth of retentions outstanding in the UK construction industry at any one time, according to the Specialist Engineering Contractors’ Group – something that impacts both the private and public sectors. Th e issue was highlighted when it transpired that thousands of subcontractors are still owed retention payments following the collapse of Carillion in January 2018.

Th e problem goes much wider though; over a three-year period the industry has lost £700 million worth of retention monies because of upstream insolvencies, according to Labour’s front-bench business team.

Reform of retentions in construction contracts has been campaigned for over many years and the Construction (Retention Deposit Schemes) Bill, introduced as a private members’ bill, had its fi rst reading in the House of Commons on 9 January 2018. If it succeeds, there will be a statutory obligation on any party withholding cash retentions to place them in a retention deposit scheme.

EFFICIENCY DRIVE

It is estimated by the Department for Business, Innovation & Skills that 30 per cent of the construction process is rework, 60 per cent of the labour eff ort is wasted and 10 per cent of loss is due to squandered materials. Th e Scottish government has published a Scottish Procurement Policy Note 1/17 on the Implementation of Building Information Modelling (BIM) within Construction Projects, setting out how BIM should be adopted within public sector procurement.

Electrical contractors are at the forefront of achieving greater environmental awareness. Th ose already familiar with renewable technologies such as solar photovoltaic and ground source heat pumps are most likely to gain commercial benefi t.

£140M: THE ADDITIONAL INVESTMENT IN HOUSING ANNOUNCED BY THE SCOTTISH GOVERNMENT IN 2017

£4BN: THE ESTIMATED ANNUAL SCOTTISH PUBLIC SECTOR CONSTRUCTION EXPENDITURE SUPPLY AND DEMAND

Th e Scottish construction industry is facing a skills shortage, as more than 36,000 new workers a year will be needed to cover current demand, according to the Construction Industry Training Board (CITB). As a result, wages are rising sharply for those with the requisite skills but, combined with an increase in the cost of materials, this is having a negative impact on construction companies.

Furthermore, CITB fi gures suggest 45 per cent of the UK’s 270,653 migrant construction workers are from EU countries, so Brexit could have a signifi cant impact upon available labour and cause greater pressure in terms of skills shortages. Th e good news is that construction apprenticeship starts are at a record high, with numbers increasing from 19,973 in 2014 to 24,899 in 2016, according to the CITB. In Scotland, numbers are rising too; construction accounted for 25 per cent of starts in the government’s Modern Apprenticeships programme up to the end of the third quarter of 2017.

LOOKING FORWARD

Th e fi nancial crisis of 2007-08, the collapse of Carillion, the Scottish independence movement and uncertainty over the fi nal Brexit deal all continue to have an eff ect. However, with the Scottish government reiterating its commitment to developing the country’s infrastructure, solving the housing crisis and reducing carbon emissions, the construction industry’s role in boosting Scotland’s economy is vital.

‘Brexit could have a signifi cant impact upon available labour and cause greater pressure in terms of skills shortages’

Rob Shepherd

is a freelance business journalist who specialises in the building services industry This is a summary of a white paper produced by NICEIC, looking at business trends in the Scottish construction sector. To access a free copy of the full version, visit www.niceic.com/contractor/ for-contractors/scotland

Common causes of PV fi res A recent study by the BRE National Solar Centre highlighted some of the common causes of fi res in PV installations

BY COLIN SINCLAIR

The number of photovoltaic (PV) panel installations has risen rapidly in the UK in recent years. PV capacity stands at over 12MW across 939,872 installations. Smallscale installations (0-4 kW) account for over 93 per cent of installations by number, and 20 per cent of total capacity. Despite this growth, PV is still a relatively young technology, and the equipment and installation standards adopted by the industry are still evolving.

Th e Department for Business, Energy and Industrial Strategy recently commissioned the BRE National Solar Centre to lead a study on fi res involving solar