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December 10, 2015

Contractors must prove no modern slavery

Contractors will be challenged to prove they are not using illegal or slave workers after the Considerate Constructors Scheme issued a new checklist. A revised set of questions, which will come into force in February, will ask how sites “assess and monitor the legitimacy and competency of the workforce”. CCS

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Boris rubberstamps Pinnacle replacement

The mayor of London Boris Johnson has given the green light for PLP’s replacement for KPF’s half-built Pinnacle Tower. The 278m-tall proposal, which was granted planning permission by the City of London last month, will be 10m shorter than the abandoned scheme – dubbed the Helter Skelter – but will

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How will supply chain bid activity evolve in 2016?

Contractors report robust workloads for Q3 and Q4 and will increasingly turn towards the private sector for growth next year in a significant shift from the first half of 2015. Almost three-quarters of firms expect the majority of work to come from the private sector in 2016, according to the

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BDC 318 : Jul 2024

December 10, 2015

Contractors must prove no modern slavery

Contractors will be challenged to prove they are not using illegal or slave workers after the Considerate Constructors Scheme issued a new checklist. A revised set of questions, which will come into force in February, will ask how sites “assess and monitor the legitimacy and competency of the workforce”. CCS chief executive Edward Hardy said the question had been prompted by growing concerns over the use of illegal workers and modern slavery in construction. In 2013, the government identified 53 “potential victims of modern slavery” in the industry. The National Crime Agency’s latest strategic assessment listed construction as the sixth most prevalent sector for labour exploitation reports. Mr Hardy said introducing the question would encourage main contractors and their supply chains to take greater responsibility for the way they recruit their workforce. “It’s a challenge for them, as currently what they do is assume all those working in the supply chain are ensuring [eligibility to work],” he told. “By asking this question, it will put a structure in place for everyone in the supply chain to provide evidence that they, as subcontractors, are making sure.” He added: “Let’s make an assumption that there are illegal workers in construction: surely we should make sure at the very least that they’re not on sites registered with us.” Mr Hardy said sites should establish a culture whereby workers feel able to highlight to management when they have concerns over colleagues. He also suggested that contractors introduce spot testing, as is currently done in relation to drug and alcohol use. The CCS leadership is due to meet Home Office officials next week. In October, the Home Office published guidance on supply chain transparency in the wake of the Modern Slavery Act 2015, which became law in March. In the foreword to the guidelines, home secretary Theresa May said: “I want to support, motivate and incentivise organisations to understand the complex issue of modern slavery and how they can tackle it. It is simply not acceptable for any organisation to say, in the 21st century, that they did not know.” The updated CCS checklist will also include a question asking site managers what they are doing “to improve the overall image of the industry to attract and retain the workforce necessary for the future of construction”. Mr Hardy said the question was included as a response to fears that there will not be sufficient workers to meet the pipeline of future work. He said: “We need to dispel this myth that it’s a filthy, dirty horrible place to work, or that you’re not looked after, or it’s dangerous. Ten years ago, the reality was there were still [these] issues. But what we see now is that the vast majority of sites do look after their workforce incredibly well and far better than most would realise.” Karen Bradley, minister for preventing abuse and exploitation, said: “Modern slavery is an abhorrent form of exploitation, with ruthless criminals targeting society’s most vulnerable people for monetary gain. “Earlier this year, we brought in the Modern Slavery Act – the first act of its kind in Europe – to give protection to victims and hand down harsh penalties on offenders, who now face up to life imprisonment if they are convicted of slavery offences. “Regardless of a businesses being large or small, they can all play a role. Whether that is developing initiatives to respond to the potential threat of modern slavery, or everyone on a construction site simply looking out for a colleague or group of employees, and if they’re concerned acting immediately.”  

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Boris rubberstamps Pinnacle replacement

The mayor of London Boris Johnson has given the green light for PLP’s replacement for KPF’s half-built Pinnacle Tower. The 278m-tall proposal, which was granted planning permission by the City of London last month, will be 10m shorter than the abandoned scheme – dubbed the Helter Skelter – but will have 30 per cent more floor space. The new 62-storey building will provide 185,000m2 of office space for about 12,000 people in 100 companies. The high-rise office tower will also feature a restaurant and bar, retail space and a public viewing gallery. The design of 22 Bishopsgate is being led by Karen Cook, who co-founded PLP following her exit from KPF in the summer of 2009. Johnson, said: ”After lying abandoned for four years, 22 Bishopsgate will now get off the ground, providing much needed office space for thousands of city workers and a positive addition to the world-class architecture of the capital’s skyline. ”There will be more than 800,000 new jobs created in London over the next 20 years and there is no doubt that tall buildings that are sensitively managed, well designed and in the right place will continue to create the new office space the city needs to retain its place as one of the business capitals of the world.” Developer, Stuart Lipton of Lipton Rogers, added: “The mayor has recognised 22 Bishopsgate as a major contribution to the on-going vitality of the City of London with a distinguished and interesting building that includes a number of new innovations designed to put the health and wellness of people first and which aims to be the first building in London to adopt the new Delos WELL building standard.” The scheme is set to complete in 2019.

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How will supply chain bid activity evolve in 2016?

Contractors report robust workloads for Q3 and Q4 and will increasingly turn towards the private sector for growth next year in a significant shift from the first half of 2015. Almost three-quarters of firms expect the majority of work to come from the private sector in 2016, according to the latest figures from consultancy Gleeds. Seventy per cent of main contractors and their supply chain partners reported a confident and optimistic outlook for the industry based on performance in Q3 and Q4 2015. Each step forward is not without a degree of nervousness, however, as businesses share their concerns about resource and capacity as the volume of contracts out to tender increases. Even though Q3 data from the Office for National Statistics revealed a decline in construction output of around 2.2 per cent when compared with Q2, feedback from surveyed construction firms suggests workloads are robust, with the outlook positive and expected to remain so for the next six months. Despite resource pressures, there has been a significant upturn in bidding activity over the past 12 months, with 75 per cent of respondents to Gleeds’ survey saying they were making concerted efforts to allow sufficient time to tender for new work. On average, 41 per cent of firms were working on between six and 10 bids at a time – up from 32 per cent in Q3/Q4 2014 – while 35 per cent of firms reported they were working on 11 or more bids. Pricing change suggests increased competition Overheads and profit applied to tender pricing have fallen over the past nine months, and Gleeds data shows it is now more common to see rates of 1-6 per cent as opposed to 10 per cent or more. This downward trend suggests increased competition in the marketplace, which is likely to be a result of greater power from suppliers over cost and rivalry among existing players. While there is industry-wide acknowledgement that we have a skills crisis on our hands, the increase in bidding activity over the past year suggests the shortage is not having a pronounced impact on bidding and procurement. Recruitment levels meanwhile remain high, with 86 per cent of respondents recruiting for additional staff to bid and deliver work. This indicates that construction businesses are relatively confident over the labour requirements needed if and when new work is won. Nevertheless, almost 40 per cent of those surveyed said they were struggling to manage staff costs in light of the increasing cost of labour. Materials costs have also risen, with 80 per cent of respondents reporting that materials costs had increased in the previous six months, while 50 per cent said lead-in times for certain materials had lengthened. Overall, 84 per cent of the supply chain expected materials prices to increase over the next six months. Respondents suggested that tender opportunities are strong – through both frameworks and traditional competitive tender routes. The volume of tenders procured via framework agreements has increased notably, indicating public sector capital expenditure is being prioritised. However, some respondents noted that two-stage procurement has become increasingly popular, while it was noted that the appetite among main contractors for single-stage tenders is coming to an end. Private sector dominating opportunity Nevertheless, the private sector continues to account for the lion’s share of work. When asked where businesses anticipated future workload coming from, 70 per cent of firms expected the majority of work to be derived from the private sector over the next 12 months. Source: Gleeds This is an interesting shift in opinion in comparison with Q1/Q2 2015, when companies predicted that future workload was likely be more equally proportioned between public and private sectors. Statistics reveal that in Q3/Q4, the top five most active sectors based on tender opportunities were commercial, education, health, leisure and retail. This data highlights two things: firstly, that the private commercial sector is still very much leading the way when it comes to investment and delivery, while the improvements we have seen in consumer spending are having a knock-on effect in the leisure and retail sectors as customers have more disposable income to spend. Second, that spending in the private sector is being matched by a fairly substantial amount of government investment in education and health, which has since been reinforced in the Spending Review and Autumn Statement. What is missing is movement in the housing market towards the delivery of the 400,000 new homes that George Osborne wants built by 2020. Source: Gleeds This indicates a loss of momentum in the residential sector, with other sectors now presenting greater opportunities, so renewed focus on the housing market is welcome. Whether or not the magnitude of investment needed actually materialises is another matter altogether. Sarah Davidson is head of research and development at Gleeds

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