The Scottish road back for Construction
25th May 2020
On 21 May 2020, the Scottish Government set out its road map for the return to work for the construction industry as a whole. That map shows the road ahead as being slow and uncertain. We take a closer look.
A phased approach
The proposal is to re-start construction on a phased basis:
Phase 0: Planning
Phase 1: Covid-19 Pre-start Prep
Phase 2: Soft start to works
Phase 3: Steady State (no use of additional PPE)
Phase 4: Steady State (additional PPE may be introduced)
Phase 5: Increasing density
In practice, the construction industry is already in Phase 0 – the planning phase. Those who haven’t been on furlough have been trying to work out how and what works can be re-started whilst keeping within the current public health mitigation measures. Those plans may need to be tweaked to bring them up to date.
Phase 1 is not the re-starting of construction works as such. What is envisaged is that infrastructure will be put in place on sites to facilitate social distancing and enhanced hygiene. This means the expansion (if required) of welfare spaces, provision of additional toilet and hand washing facilities, and the formation of one way systems and 2 metre distancing markings.
Substantive works are not scheduled to re-start until Phase 2. But even Phase 2 will be a long way from a “return to normal”. Under Phase 2, only a proportion of the workforce will be permitted to return to site. This will allow the plans formulated at Phase 0 and the infrastructure put in place at Phase 1 to be tested by relatively small numbers to see if they are likely to work in practice when a larger scale return to work happens.
Whether or not we immediately move on from Phase 0 is likely to be announced on 28 May 2020. Assuming the current positive downward trajectory in the infection rate continues we should probably anticipate moving to Phase 1 around 1 June.
There is no set timetable for the commencement of Phase 2. The industry cannot move to Phase 2 without the agreement of the Scottish Government and that agreement will not be given until at least 2 weeks after the Scottish Government has issued “updated advice”.
Assuming the Scottish Government stick to the intended rolling 3 week review periods, a move to Phase 2 might happen around 22 June (all being well). It is, however, a possibility that the timescales will be such that Phase 2 commencement slips to the next review after that (meaning a 13 July start). That said, it is important to be aware that timescales beyond the initial 28 May review date are completely a matter of speculation.
Beyond the immediate horizon?
The timescales and detailed shape of progress beyond Phase 2 is dependent upon many other factors, not the least of which being the infection rate within the wider community. As a consequence, the current version of the Scottish Government road map gives no real detail as to what the subsequent phases are going to look like. Timescales are also left vague for now.
The infrastructure to be installed during Phase 1 is likely going to come at a cost (hire charges, purchase costs etc.). It remains to be seen whether or not contractors will elect to go to the expense of putting in place such infrastructure until they have some certainty over when substantive works, and, therefore, payments from employers for work carried out, will start again.
Similarly, bringing a skeleton staff back to work at Phase 2 and the inefficiencies of working with low numbers may mean that the numbers simply don’t stack up for a contractor to return to work in an economically sustainable manner until the industry is allowed to move to Phase 3.
In practice, any contractor will need to move through those phases before starting work, even if individual contractors decide to delay doing so. Additional infrastructure is almost certainly going to be needed on sites, and an element of low density trialling of new method statements etc. will be required in order for contractors to have confidence that they have a safe method of working prior to ramping up the workforce numbers on site.
Moreover, a phased approach with no certainty as to when works can transition between phases is unlikely to be something existing contract mechanisms are designed to deal with. Even the normally straightforward obligation upon a contract administrator to come to a view on an application for an extension of time within a fixed period (12 weeks under a standard SBCC contract) is going to come with difficulties.
Realistically, therefore, contractors, employers and their consultants are going to have to take a pragmatic look at all existing contractual obligations and agree how those are to be modified to fit the new commercial and practical realities of projects. WJM is on hand to guide those in the construction industry through these times to ensure that any such modifications are properly thought through and appropriately documented to avoid further problems arising in future.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at May 2020. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.