The Corporate Insolvency and Governance Act 2020 has now received Royal Assent. It applies to most companies as well as Limited Liability Partnerships.
The Construction Leadership Council (the CLC) has released its new recovery plan for the UK construction sector entitled “Roadmap to Recovery”.
It aims to support increased activity in the construction industry following the Coronavirus pandemic but estimates that recovery will be gradual, mostly taking place in 2021.
The plan encourages employers on construction projects (including public sector employers) to push forward with projects to help stimulate the construction industry. The plan includes the following recommendations:
- Employers should open as many sites as possible where it is safe to do so under the Government guidelines.
- Public sector employers should use the relief measures provided in PPN 02/20 to support supply chains and extend working hours on-site wherever possible (other PPNs on the same topic have also been published as per our latest ebriefing.
- The Government should accelerate consideration of business cases from public sectors to expedite new procurements, accelerate their Aluminium Composite Material (ACM) and non-ACM cladding remediation programmes, make apprenticeship levies more flexible to ensure that new talent is still entering the industry, and delay new VAT rules (which make payment of tax the responsibility of the employer rather than the contractor) until 2021 to help with cash flow.
The construction sector plays a critical role in the UK economy (the CLC estimate it accounts for 8.6% of GDP) and investment in projects such as significant new infrastructure is one approach governments can take to mitigate economic downturn. Equally though, individually construction projects involve significant risk and uncertainty meaning it is important that employers make informed and risk-balanced decisions to move their projects forward, particularly when considering the relief measures referred to.
By now, most employers will have reopened project-sites but may be under some pressure from contractors to offer them some of the relief measures set out in the various PPNs (such as making advanced payments or making “normal” payments despite service disruption). As these measures shift commercial risk onto the employer, we recommend taking a measured approach to determining whether that level of extra risk is something employers can realistically take. You can also read our more detailed briefings.
For many of our clients, the spirit behind these recommendations will be close to home with clients considering what they can do to support their communities post-lockdown. The CLC’s recommendations act as a reminder of how important apprenticeships are to both supporting local employment levels now as well as creating a sustained workforce for the future. We suspect that now more than ever, our clients will be concerned with ensuring that every contract let achieves maximum social value for pound spent.
The Construction team at Anthony Collins Solicitors has supported a number of clients through the uncertainties posed by Coronavirus and continues to be on hand to support you as the situation develops. For further information or advice, please contact Martin Brown or your usual contact within the team.
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