The Week That Was - 30 August 2024

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

Fire at Dagenham flats

A major incident has been declared after a fire broke out at a block of flats in Dagenham, which were undergoing fire safety works.  The blaze, which was attended by more than 200 firefighters, broke out at around 2.44am on Monday 26 August 2024.  It is reported that a survey undertaken in September 2020 found that the building was not compliant with building regulations as at the date of its construction.  As such, an enforcement notice had been issued in 2023 by the London Fire Brigade (LFB). 

At the time of the fire, the building was undergoing cladding removal works to replace high pressure laminate panels.  In response to the incident, the LFB has said "We will now begin a full investigation into the fire and its cause.  This was a very dynamic and challenging incident, and we know there will undoubtedly be concerns around the fire safety issues present within the building and this will form part of our report."

More than 100 people were evacuated.  Four people were treated at the scene, with two being taken to hospital. 

You can read more here.

Leading façade group files for administration

Leading façade contractor M Price Group has filed a notice of an intention to appoint an administrator.  M Price Group, which was established in 1881, specialised in complex façade installations at high rise and commercial developments, with contract sizes ranging from between £2 million and £20 million.  Previously, M Price Limited went into administration in September 2023, and M Price Contracting went into voluntary liquidation in April 2024. 

You can read more here.

Construction insolvency rate slows

According to official figures, the rate at which construction firms are going into liquidation has slowed.  Data from the Insolvency Service has revealed that 4,303 firms went into liquidation in the year to July, which is the lowest rolling annual total since 2020.  Construction still accounted, however, for 16.9% of all insolvencies across England and Wales in July. 

The Building Cost Information Services has said that high interest rates and the "delivery of legacy projects" are all contributing factors in the latest figures, along with the fact that the Bank of England did not implement a base rate cut until 1 August 2024.
As workloads increase and industry activity potentially strengthens during the second half of 2024, it is anticipated that 2025 insolvency risks may also increase. 

You can read more here.

Despite small practice pessimism, architects anticipate an increase in workload

According to a recent Royal Institute of British Architects' (RIBA) Future Trends Survey, whilst there has been a slide in optimism from smaller practices about workloads and staffing levels, large practices are the most confident they have been in two years. 

The most notable change in levels of optimism was among smaller practices, employing 10 staff or less, which returned an index figure of -6 to the monthly sentiment survey for July, which was a 10-point drop from the previous results for June.  This followed two months of optimism about workloads. 

Over the next three months, 19% of small firms anticipate an increase in workloads, whereas 25% anticipate a decrease.  11% of firms expect to employ more permanent staff, 9% expect to employ fewer and 81% anticipate no change (we realise this adds up to 101%, but that's what the study said!). 

You can read more here.

Sign-offs at risk as building control firm enters liquidation

PWC Building Control Services has announced that it has stopped work on all projects and has gone into voluntary liquidation after its application to be listed on the Building Safety Regulator's (BSR) approved register failed.  The BSR has been overseeing applications from building inspectors to become registered building control approvers as part of the measures introduced by the Building Safety Act.

In January 2023, PWC was sanctioned by the Construction Industry Council Approved Inspectors Register (CICAIR), the former building control regulator, after a disciplinary investigation found nine breaches of its code of conduct.  This sanction was due to expire in January 2025 and did not prevent PWC from continuing to operate as an approved inspector. 

You can read more here.

Lendlease in the 'early stages' of selling UK construction arm

Lendlease has said that it is still in the early stages of selling its UK construction arm, nearly three months after the business was put up for sale.  In its full-year results, the New South-Wales based group has advised that it is "progressing" with the divestment of its UK construction business and is targeting completion of the sale within the next 18 months.

The results also revealed that the sum set aside by the group for building remediation costs had risen this year by £23 million, from £165 million in 2023 to £188 million in 2024.  

Turnover from construction across all regions also increased by 40% to £65 million over the year, however operating profit for the group has decreased to £160 million from £163 million in 2023.

You can read more here.
 
Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.

Authors: Hannah McDonagh, Catherine Stead and Emily Twomey