What lies ahead for the construction industry this year?
- AuthorPerdeep Grewal
As we head into the second quarter, 2019 will certainly be an eventful year. Here are some of my thoughts on what to look out for this year in building and construction.
I recently blogged on the impact of Brexit in the construction industry.
Between now and reaching a deal (if any), there will be more uncertainty across the construction industry. The focus on control provisions in construction contracts will increase. This is in order to mitigate the effects on the cost of importing materials into the UK and the decrease in the labour market.
Ultimately, if we leave the EU, projects requiring finance will be more dependent on the impact and the health of the UK economy.
Impact of S&T (UK) Limited v Grove Developments Limited
The Court of Appeal concluded that an employer who has failed to serve both a payment notice and a pay less notice can commence an adjudication. An adjudication will assess the true value of a payment application.
The Court of Appeal also stressed that the employer is entitled to a second adjudication. However, that’s only after it has paid the sum due to the contractor in the interim payment application. The consequence of this is that a second adjudication cannot be commenced at any time. This effectively prevents an employer from using adjudication being used as a mechanism to withhold an interim payment.
The impact of this decision will play out this year. We are yet to see whether employers will commence a second adjudication to determine the true value of a payment application.
The Grenfell Inquiry
We expect the issues on cladding from the impact of the Grenfell tragedy to be felt this year. Although the majority of social residential developments have commenced works to remove combustible cladding, it was reported that only 14 blocks had begun the removal works.
Rather than focus on who can carry out the works the cheapest, I suspect employers will concentrate on technical specifications and health and safety assessments.
Aftermath of Carillion’s collapse
The aftermath of Carillion’s collapse will continue to be felt across the country. The government-owned British Business Bank made available £100 million of financing for small and medium-sized firms in the wake of Carillion’s collapse. However, despite a year on, the funds remain untouched.
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