The reckoning

Since coming into power in 1997, Labour’s legislative agenda has forced the construction industry to alter its working methods and practices – at a considerable cost. The legislative focus has been on improving payment practices, introducing a statutory right to adjudication, and health, safety and environmental issues

Some of those in construction have criticised the government for its neglect of the industry, despite the fact that it generated £97bn, or 10% of GDP in 2009. Part of the frustration has been that over the past 13 years, there have been nine ministers responsible for construction, nine for housing and 11 for energy.

The most significant change was the introduction of the Construction Act 1996. This came into force in 1998, and set out rules to improve cash flow and introduced a statutory right to adjudication.

There have been other significant changes in legislation, mainly following an environmental agenda that is now part of mainstream politics, such as the Code for Sustainable Buildings to ensure all new non-domestic buildings are zero carbon by 2019, energy performance certificates and site waste management plans, to name but a few. But there will also be the carbon reduction commitments and a further revision to the Building Regulations 2000 that will set out mandatory minimum standards and strict energy efficiency requirements, which will have had a profound impact on how buildings are designed and constructed.

Labour’s introduction of an offence of corporate manslaughter, combined with guidance for boards from the Institute of Directors and the prospect of statutory safety duties has forced directors and managers to focus on their health and safety responsibilities. The Corporate Manslaughter and Corporate Homicide Act 2007 is intended to make it easier to prosecute organisations for manslaughter. The penalties on conviction are unlimited fines, remedial orders and publicity orders.

The conduct of senior management is a “substantial element” of the new offence of corporate manslaughter. The act does not create any new offences for individuals, although they may be prosecuted for manslaughter, a common law offence, and breaches of health and safety legislation. The courts’ sentencing powers have also been increased by the Health and Safety (Offences) Act 2008.

Other legislation enacted by the Labour government in this area includes the Work at Height Regulations 2005, which consolidate previous legislation, the Control of Asbestos at Work Regulations 2006 and a new duty to manage asbestos in premises. The regulations protect workers from exposure to asbestos in buildings. The CDM regulations have been effective in increasing co-operation among duty holders, managing risk and enhancing the duties of clients and designers as well as creating the role of CDM co-ordinator. Despite this increase in legislation, the construction industry still has a poor health and safety record with numerous deaths each year.

For this reason, in 2008 the secretary of state for work and pensions commissioned an inquiry into the underlying causes of construction fatal accidents. Rita Donaghy’s report, published last July, dealt with the need for greater enforcement procedures, giving courts greater sentencing powers, increasing fines for health and safety breaches and creating statutory directors’ duties.

Although the Conservative party favours a lighter touch approach to regulation, it seems the Labour legacy is here to stay. However, there is an increasing recognition from politicians that industry bears the burden of implementing regulation. For example, the government recently said it would implement rules on self-employment when the industry was in a “stronger position”.

Nonetheless, much of the legislation enacted has been driven by the UK’s obligations as a member of the EU, and also the desire to present itself to the rest of the world as a leader in modern technologies and methods of working. So even if there is a change of government, it will probably mean more of the same for construction.