FEEDBACK FROM SITE: HOW IS THE SECTOR ADAPTING?
Following last week’s call from the Prime Minister to go back to work, we spoke to a number of contractors working in different sectors to see how they have experienced the working environment since lockdown, the challenges they have faced and their view on moving forwards.
This comes against a backdrop of support from the government to get Britain back to work in order to support the economy through construction projects. This week has seen the majority of housebuilders go back on site and the announcement of some key projects in the housing, logistics, utilities and rail sectors.
For those working in infrastructure, many have seen little change with Minster for Transport Grant Schapps commenting that there has been an ‘army’ of infrastructure workers across the country, with accelerated maintenance road and rail projects during lockdown. Highways England completed £200m worth of upgrades and Network Rail finished £550m of work in April alone. This sector is experiencing ongoing support, with Thames Water announcing the contractors that will work on its £350m “Thames-wide” infrastructure and non-infrastructure capital programme of spending, a project set to last until 2025. This is added to by road and rail infrastructure projects worth a combined £175m being fast-tracked to support the UK’s economy during lockdown. While the Department for Transport, predicting that fewer people will be using transport systems, is using this period to accelerate works on public highways, roads and rail.
Outside of infrastructure, things have been less defined in terms of ongoing work and confidence in the future. Many of the contractors that we contacted work outside of infrastructure and were experiencing things differently. Dependent on the sector, some have stopped working through the lockdown, with those in housing most affected but experiencing a slow return to work with most sites operational in the coming weeks.
The reduced ability to work is understandably being compounded by safe distancing rules on site, with many working at vastly reduced capacities. One contractor we spoke to that is working on the refurbishment of hospital facilities has reduced its capacity by 10%. Another scaffolding contractor is only able to use 30 out of its 200 employees, while a ground working specialist has only been able to call up 10% of its labour force to work at the moment, as the housebuilding sector gets back on site. Even those most positive working in housebuilding can only foresee calling on 50% of the labour force to work, until social distancing regulations change.
Even for those able to return to site effectively, there is still the issue of the supply chain, with many experiencing some sort of disruption through the procurement of materials. Last week, Morgan Sindall revealed continuing disruption to operations impacted by the coronavirus lockdown. 80% of its construction sites are now operational but they are being impacted by lower levels of productivity, partly due to difficulties getting certain building materials on site. With most of the material producers returning to work, it is hoped that these issues will fade away, but presently there is a well-documented shortage of plaster and plasterboard, as well as challenges in procuring special precast materials.
Recognising the challenge that social distancing will impose on many returning to work, the government has granted house builders the all-clear to keep building sites open later to stagger workers’ arrival times. However, a specialist contractor working in the capital highlighted his “concerns for those working in London and how they can get to work safely”, stating “the government is not exercising a duty of care for these workers.”
From the experience of the contractors we spoke to, the ability to work safely, despite being the most obvious challenge, seems to be something that the construction industry has approached with discipline. With one commenting: “Working at the moment is confusing and difficult, with lots of new paperwork and new rules. There is more red tape, but this time the red tape is needed and we understand why it’s there and how it will evolve on a daily basis.” Another commented: “The main risk we see is in canteens, so people have to be more vigilant.” This concern and support for safe working practices in order to help their sector bounce back, has seen the instigation of the Charter for Safe Working Practice, which almost 100 separate organisations have already signed up to.
However, there does seem to be a number of different approaches to safety on site especially on the issue of face coverings, with one contractor commenting: “We’re not wearing facemasks, not for now. Everyone’s being sensible and staff are happy with the safe working distance arrangements.” On the other hand another voiced an opposing view: “We are making sure that the guys on site are safe so they are all wearing FF3 face masks. The guys are happy to work on site and we have no other choice but to learn how to cope the best we can.”
For the latest government guidance on the appropriate use of facemasks, click here.
Another useful site for guidance has been provided by the Construction Industry Training Board (CITB), in conjunction with the Construction Leadership Council (CLC) and others, to produce a comprehensive range of interactive checklists and forms to assist construction employers. These are designed to help those that are permitted and able to return to work to have a clear understanding of how they can apply the CLC’s covid-19 Site Operating Procedures guidance (Version 3) in practice. Guidance on issues such as close working, cleaning and what employees should do if they become unwell is included.
But will this new approach to work lead to extended completion dates and how is this being addressed by sub-contractors? In the main, the sub-contractors we spoke to remain positive on their completion dates. Those that have been able to work throughout believe that their completion dates will be delayed slightly, due to the level of stop-starts and reduced working capacity. While those that are only just returning to work are confident that they have the backing of the main contractor and there is a level of understanding of delivering in difficult times. One groundworker commented: “We’ve carried on working until the client told us to stop, so there has been an understanding between the two parties.”
An even bigger issue that appears to be unresolved as we get back to work, amidst uncertain delivery schedules, is the ongoing costs for work previously quoted and agreed upon. It appears that most are adhering to the principle of working to fixed term contracts, with one contractor commenting: “The costs aren’t being passed back to the client at the moment. We need to be seen to be acting correctly so that we get the opportunity to get the next job.” Another has had to change the way that they are quoting in order to make it financially viable to provide a service: “As things will take longer due to social-distancing we are working on a day rate to allow for the new working practices and to make it financially viable. Most of the work won’t be affected as in the main it will continue as before; it will only be certain projects where we may have to revise costs. Ultimately, it has to be work that allows us to stay in business.”
Finally, we wanted to test the water with the level of confidence this industry has in its future. A recent LinkedIn poll by LinkedIn’s ‘Workforce Confidence Index’ stated that construction is the most confident sector at present. Is this true and what lies behind it? Commenting on the findings, one contractor offered his thoughts: “Yes, I agree with the polls. I think construction is a bedrock industry that has gone through recessions unscathed, as it is seen as an essential service. That all adds to our sense of confidence. As we work mainly in the public sector we are getting paid on time and in some cases payment has speeded up. We have found that with furlough the money has come through fast from the HMRC.”
Indeed, it is the government’s backing for the construction sector that most point to it as the way forward, with many positive supporting comments from those we spoke to, for example: “We are seeing and encouraging the investment from the government. They have been behind it from the get-go,” and “we’re fully behind the government’s support for construction.” Commenting on the financial support the government has provided the industry with, another company commented: “The furlough scheme has worked well for us and the money has come through quickly; although it will have been more difficult for the self-employed in our industry.”
The final test for confidence is the pipeline seen from those we spoke to, with most if not all hopeful that a recovery will come: “There has to be a pipeline of work. It stopped for the last 3-4 weeks, but we are seeing the enquiries come back in again.”
As we move forwards it is clear that some sectors of the industry have a more secure future than others, with the release of government funds for infrastructure projects and the return of the housebuilder. For others, there are still challenges ahead, with a ground working contractor noting, “We tendered for a large job in the north east for a retail park but that kept being put back and now we’ve learnt that a lot of retailers have pulled out, so it’s been shelved. However other projects we have tendered for are still moving forwards and we have plenty on our order books.”
Another, larger contractor saw different parts of the market responding to future threats: ‘We have only seen a couple of jobs that have stopped for example some airport contracts, but others are using this time to do repairs”. Another commented: “We do a lot of work in universities but we foresee a slowing of work in this sector as some of the fees have dried up, so there will be budget cuts on new facilities and accommodation.”
A decline in opportunity is also a concern for many in the housebuilding sector, with the focus in May and June on the completion of many housebuilding sites and uncertainty on proposed sites moving forwards. Although one client is releasing sites for foundations to dig, another is concerned about work continuing after this initial phase: “A big concern is that we bring everyone back to work and then the work dries up, as over the last few months we haven’t been winning any work.”
Looking ahead, there are some positive, yet challenging times set for the sector as many attempt to strike a balance between working safely and productively, managing current contracts and also securing future projects. One contractor commented on his concerns in the short term: “The biggest challenge is getting recognition from the client that we are having some difficulties working, which could lead to some contractual wrangles further down the track.”