The UK construction sector is suffering from a number of questionable practices that are affecting the industry on many levels. Many have suggested that a nationwide regulating body could be an answer to some of the corruption, mismanagement of funds, and security issues the industry is facing. But who should be in charge of regulating the industry, and will it even make a difference?
Small Firms are Suffering the Most
According to Rudy Klein, who represents seven engineering subcontractor trade bodies, one of the main issues is major contractors failing to make payments on time and putting more pressure on their supply chain. As a result, many subcontractors have to deal with this issue by cutting down on expenses like safety equipment and putting the security of their workers at risk. Thankfully, online suppliers like engelbert strauss are allowing these small contractors to pay less on things like workwear trousers, for instance, and work around these issues.
They sell a wide variety of men’s work trousers and are also dedicated to sustainability, which is becoming a major issue in the construction industry. Most of their products are made from high quality fabrics and feature 3M’s Scotch Brite reflective material technology used by various manufacturers of occupational safety clothing to improve passive safety. They are able to provide subcontractors with work trousers in sizes ranging from 28R to 50R and they offer thermal wear and protective gear for workers dealing with harsh climates. They also offer summer clothing to protect workers from heat stress, which is a major issue that is often neglected by smaller contractors and a cause for a rising number of accidents.
But even with access to cheaper protective equipment, Klein still believes that more needs to be done. Many industry insiders agree and believe that only a national regulatory body can address late payment practices since change is unlikely to come from the industry itself. And this wouldn’t be exceptional as most sectors have at least one if not multiple regulatory bodies. That’s why the SEC, which represents over 60,000 firms in total, moved to have one for the construction industry too.
But there are still some questions as to what this regulatory body would look like, and what it would be in charge of exactly. Then there’s the question of whether this kind of body would be beneficial at all, and if it could actually be an answer to all the issues plaguing the industry.
Worries about Administrative Costs
Andy Steel, who is a chief executive for a major contractor based in Surrey, claimed that adding an additional layer of bureaucracy would only make matters worse. But Klein stated that there are things that could be done to prevent administrative bloat and make sure that a new regulatory body won’t make contractors less productive by adding more administrative costs.
One solution would be for the government to fund this body, with a levy on contractors being a possibility. He also stated that the regulatory body would eventually pay for itself by improving the construction sector’s GDP and productivity. And the cost of the regulatory body will largely depend on its scope. For instance, the Financial Conduct Authority costs £600m per year, the Water Services Regulation Authority costs £23m, while the ombudsman for the supermarket industry only costs £700,000.
What Would this Body Do Exactly?
First, the regulatory body would be responsible for improving the standards in the industry by accrediting firms who follow best practices. This would have the effect of improving the overall quality of buildings according to Klein, and making sure that contractors that undercut legitimate businesses and perform poorly are held accountable.
The body would also be in charge of arbitrating money mismanagement claims involving contractors and subcontractors, and help promote better procurement methods in the public sector.
Tighter Licensing Rules Could be a Solution
Ann Bentley, who is the CLC’s lead on business models and supply chain, as well as Rider Levett Bucknall’s global chairman, welcomed the idea of a regulatory body tightening up licensing standards for contractors. She also stated that licensing should be continual, much like it is in the healthcare industry.
A regulating body could lay out a set of standards and rules that contractors would have to follow in order to operate lawfully. She noted that nurses had to be regularly relicensed, which ensured that they were qualified and passed rigorous testing. The same should be true for a worker pouring concrete on a multi-level car park as well.
However, some have pointed out that accreditation schemes were instituted in the past, and that contractors failed to follow through since they there was nothing obligating them to do so. A solution could be to write it into law, but still, even legally imposed mandates aren’t always followed.
There is no doubt that the construction industry is in dire need of a reform. However, attitudes from industry players will have to change first. The national government may also have to change too before any true reform can be implemented.