The Office for National Statistics figures demonstrate that as a result of Covid-19, construction output shrank by a colossal 40.1% in April 2020. The Construction Products Association has also forecast a most unwelcome fall of 25% in Construction output in the UK during 2020.
With the prospect of a deep, once in a generation recession emerging and the restructuring of Contractors and the rest of the supply chain, redundancies are inevitable and likely unavoidable.
The Solution (?)
As the pipeline of private sector work slows, the government’s commitment to infrastructure must bear fruit and translate into orders. The industry bodies, including the Chartered Institute of Building (CIOB) and Build UK, have come together and made recommendations to the Construction Leadership Council (CLC) – the link between our Industry and the UK government.
The CLC has now published its ‘Roadmap to recovery’, highlighting 3 phases over the next two years:
Phase One – The Restart Phase
Over the next three months, aiming to increase output, maximise employment and minimise disruption.
Phase two – The Reset Phase
Between three months and a year, includes measures to increase demand, boost productivity and strengthen the supply chain.
Phase three – The Reinvent Phase
Running the second year, this phase looks at delivering better value and improved collaboration and partnership.
The CLC needs the whole sector to engage with this roadmap, in a plan-do-review approach, to ensure a successful recovery. Therefore, we, as an industry have two choices:
- Use this as an opportunity and let Covid-19 act as the catalyst to finally kickstart Latham and Egan’s collaboration ideology.
- To revert to type, be cynical, and continue working in a largely adversarial way.
One thing is for certain, we are in the eye of the storm and businesses are doing all they can to survive. With programmes delayed and cash flow being strangled, companies are already making redundancies and one concern is that companies could rely on claims for cash flow.
Brant always tries to avoid formal dispute resolution, but sometimes its Clients have no alternative but to defend or promote a claim.
Accepting that Construction Lawyers have dealt with ‘Force Majeure’ and other contractual issues, there are practical steps, from a commercial/quantum point of view, that companies can take, during these uncertain times, to protect themselves in the event of defending a claim.
Brant takes a look at these practical steps from a quantum expert point of view in our insight of 29 May 2020.
Construction Quantum Expert