Ask the aspidistra

This fellow Nigel Griffiths seems to have got off to a good start as construction minister. It dawned on him that it might be useful to find out what is going on by asking the construction industry "What's going on?" The industry is just like my wife's aspidistra; it loves attention and it likes getting watered and polished. Nigel Griffiths is watering and polishing construction. He has even asked the 1500 members of the Society of Construction Law "What's going on?" So solicitor Vicky Russell and the members are helping the minister.

Now, don't get the Society of Construction Law wrong. Nearly half of the members are non-lawyers: contractors, developers and construction professionals. So they know what is going on, while the solicitors and barristers limp along behind picking up the crumb or two of wisdom. The society has invited the minister to keep Britain leading the world in construction by nudging off the pitch one or two legalisms and adjusting a few others.

The society pointed to retention fund clauses in UK contracts. First, the industry gets cheesed off by retention funds, right? Griffiths could become the darling of politics if he pledged to rid government contracts of retention. He doesn't need legislation. The industry would feel so much better; it might even put Griffiths up to be leader of the Conservative Party.

There is no excuse not to get rid of retentions. In 1964 parliament received the report The Placing and Management of Contracts for Building and Civil Engineering, (known as the Banwell Report) and eliminated certain abuses. Well, minister, is 40 years enough? The Society of Construction Law simply makes the point that retention has a damaging impact on profitability, is expensive to operate and should go. There is a vote or two in this one, dear minister.

There are loads of votes in this. If Griffiths can tell the industry that it will not tolerate low-priced bidding, he will keep his party in government

And another thing, said the society, competitive tendering, with its emphasis on lowest price, has a destructive effect.

Tactfully, it explained how driving prices down caused "tensions". Less tactfully, let me tell you that the whole of the claims emphasis is founded on the simple fact that a low, low price leaves no room to "let the odd cock-up be overlooked". If the contractor's price hasn't got any fat in it, what do you expect him to do when the client or architect or engineer drops a clanger and has caused added expense?

He has to charge it, of course. The contractor cannot trade at a loss but it can smooth things over when its price has room, can't it? Disputes are founded, rooted, driven by prices. As for votes on this topic, there are loads. If Griffiths can tell the industry that it will not tolerate low-priced bidding, he will keep his party in government. The society is pressing him to emphasise the wisdom of long-term relationships between contractors and clients. He is pressing voters for long-term relationships with him and his party. That's a simple deal, isn't it?

The next issue dealt with a little-explored area of risk: contract or "project-based insurance". Three points appear to arise; first, what sort of insurances could be used on this particular project?

Nine years ago, Latham recommended "latent defects insurance". But it didn't get picked up. The society is saying the same now. It also suggests the project carries "employer's liability insurance", "terrorism insurance" and "health and safety insurance".

Second, the huge and crippling rises in insurance premiums in these two years may be offset by the benefit of "project cover" rather than individual small company cover, which is especially expensive for small and medium-sized enterprises. In other words the economy of scale will result in lower costs. Third, the project itself would enjoy particular cover; site designed cover, if you see what I mean. Griffiths could do this for his government projects.