Member Article

The Impact of Construction Legislation on the Industry

Knowing what the latest legislation means for your construction company must be at the heart of your business model.

The ever-growing array of construction legislation is unlikely to cause headaches for the those in the industry with in-house advisers and consultants on hand.

Some blue-chip plcs even have access to specialist lobbying organisations, to influence policy and monitor its subsequent progress into law.

However, many hard-pressed financial controllers monitoring invoices, retentions, cash flow, unpaid debts, trade accounts, subcontractor payments and more, simply don’t have the time to relax and study the latest tranche of legislation, let alone assess how it might impact their processes and systems.

An example of a legislation change detailed in a 64-page guide is DEFRA’s ‘Construction code of practice for the sustainable use of soils on construction sites’.

It’s hard to believe that management teams at many construction companies digested the detail of this lengthy document.

Understanding legislation can seem time-consuming, but it’s important to monitor.

Here, Heather Bryant, the chief inspector at the Health & Safety Executive (HSE) Construction Division, sets out her ‘plan of work’ for 2014-2015.

Bryant says around 70% of HSE inspections will be on smaller construction sites and refurbishment schemes; typically carried out by local builders.

Construction phase plans are the latest ‘one to watch’.

There’s much more of interest out there from the HSE; most recently the new Construction (Design and Maintenance) Regulations 2015 (CDM 2015) which mean every single construction project must have a ‘construction phase plan’.

The legislation covers almost every building task; from a replacement chimney breast or a new dormer window.

Green building regs are a constant challenge, and look certain to change as the government’s radical new approach to energy issues evolves.

The Code for Sustainable Homes was only introduced in 2007, but has now been abandoned, although confusingly, its requirements are still not always obsolete, as this detailed analysis by BRE explains.

There is also the need to consider updates to established legislation notably the Construction Act 1998 and its later amendments designed to create a fairer payment regime and introduce clarity and certainty into the complex process.

Even more than other construction legislation, it’s very easy to fall foul of its clauses, but as always, ignorance will be no defence.

TAKEAWAYS:

• Check that your systems and processes comply with current construction legislation.
• Look at how your construction company monitors future legislative changes.
• Ensure your construction sites would pass an HSE inspection.
• Make sure your payment systems match the latest Construction Act requirements.

Assess your company’s ability to satisfy legislation requiring timely payments with The Cash Flow Efficiency Flowchart.

This was posted in Bdaily's Members' News section by Wes Simmons .