In a letter to Minister for Local Government, Housing & Planning Kevin Stewart MSP, the Chartered Institute of Building, the Royal Institution of Chartered Surveyors and the Royal Incorporation of Architects Scotland called for urgent action to avoid a long term, detrimental impact on the construction sector and the economy.
They called for a gradual reopening of non-essential building sites – within the parameters of health and safety requirements – as soon as possible, emphasising that “stasis is already taking hold of the sector in Scotland with many projects at significant risk”.
“One of the biggest impacts of closed construction sites is that we are finding contractors and supply chains are now engaging in a comprehensive furlough of staff to the point that a state of paralysis is setting into the construction industry,” the bodies state. Outcomes could include long term skills shortages, cost increases and reduced productivity.
“Many projects are in jeopardy, even at pre-construction phase, because the supply chain cannot submit quotes and prices. Any delay in project planning and procurement will cause projects to be cancelled, and it could prolong the recovery,” they said.
The bodies add that the construction industry is well placed to police itself through relevant regulations, including additional Health & Safety Executive enforcement.
In addition to the lifting of the lockdown on building sites, they also call on the Scottish Government to introduce measures including the prioritisation of preconstruction design and specification work leading to tenders, ensuring there is a flow of activity into the construction industry.
Appropriate building surveys and condition inspections of publicly owned buildings should be carried out now while they are currently vacant, and the Government should lead an initiative to encourage a large scale public sector programme of maintenance works that will assist cash flow for SMEs.
Similar letters are also being sent to Ministers in Wales and Northern Ireland.
Commenting on the current situation in Scotland, Morton Fraser partner and head of the commercial real estate sector and construction team Jonathan Seddon said: “The current shutdown of construction sites in Scotland could potentially have a devastating effect on supply chain. As and when construction projects are able to start up again, we may well find that many suppliers and sub-contractors have so many staff furloughed that it takes much longer to get going again.
“On the other hand, had the Scottish Government not ordered construction sites to close, we may well have found that as many people were off ill as were furloughed, so the effect may well have been the same,” he said. “Ultimately the Scottish Government's driver was the welfare of the population so it's hard to argue with that. On the other hand, sites do need to now open quite soon otherwise the impact on the economy could be drastic.”
Seddon added: “There is almost certainly going to be an increase in disputes in the construction sector on account of the lockdown. The contractual implications on some projects may be capable of being unravelled by mutual agreement between the principals involved, in the same way that many sites were ultimately shut down by mutual agreement. However there will be others where the preference will be to take the issues to adjudication and ultimately court.
“We can probably expect to see test cases on some of the more common questions that might apply across the majority of projects. For example, does the guidance issued by the Scottish Government ultimately amount to something akin to change in law? And if so, is the answer to that question different for projects north and south of the border, given the different approaches taken by Holyrood and Westminster?”