New Year, New Changes
02 January 2020
It is with great pleasure that I get to wish everyone a Happy New Year. A year that is already shaping up to be potentially quite significant for the construction sector with potentially significant changes being thrust upon us for which we will all have to respond.
External drivers including the continued response to the Grenfell tragedy and other recent fires, both in the UK and around the world, continues to question the competence of building professionals and the suitability of regulatory procedures, for which we will all as building professionals have to respond if we are to rebuild trust and shift the focus of our sector back to delivering safe buildings that meet public needs first and foremost.
In addition, an increase in the awareness of climate change and the ‘climate emergency’ will undoubtedly also drive change. And if we've learned anything from the past year, it is perhaps the urgency of the climate situation that has changed and hence, the need for a meaningful response to both the challenge of decarbonising and adapting the built environment to the realities of change climate are now critical.
In the UK, we also have considerable political uncertainty, with a newly elected government in December and of course the continued process of BREXIT with the necessary reorganisation, politically, economically, and legislatively that will be required.
The year 2020 certainly appears to be a year of change, and hopefully also a year when we start to have greater certainty moving forward. But in a recent briefing from the Department for Business, Energy and Industrial Strategy, suggested the following key things for the construction sector to look out for in 2020:
- Insurance – concerns about professional competency regarding fire continue to have a major impact on the insurance market, especially the professional indemnity market which is tightening further with increasing levels of excess and policies covering fewer activities.
- Building Safety – the drive for greater building safety in the UK will mean new legislation, a new regulator and new regulatory procedures. I have no doubt that similar responses to the learning of the tragedy at Grenfell will also be implemented in markets around the world.
- Tax Changes – we're also seeing changes to the tax systems; and of note, shift to a reverse charge system for VAT on construction projects in the UK. Once implemented this will hopefully make the system easier to manage within the sector, however, there will be a significant transition which will impact on the cash flow for construction firms and subcontractors in the supply chain.
- Competition – in the UK and around the world, regulators have identified anti-competitive trading practices in construction, with recent investigations by the UK Competition and Market Authority leading to prosecutions into a number of demolitions, groundworks, concrete pipe and fit out contractors.
To conclude, 2020 looks to be shaping up to be quite a significant year of change for the construction industry, but hopefully one that sets the tone for raising standards for years to come. However, I remain confident that Building Engineers, with their mix of technical and practical experience working across the life cycle of the built environment, are well placed to make a positive contribution to this change.
I wish you very well for the year.
Dr Gavin Dunn
BSc MSc PhD FCABE
Chartered Building Engineer