The Week That Was - 4 October 2024

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

£200 million Wimbledon expansion plan approved

The All England Lawn Tennis Club (AELTC)'s controversial plan to triple the size of its facilities in Wimbledon with 38 additional grass courts and a new show court has been approved by Jules Pipe, the London Deputy Mayor for Planning.

The expansion project will see the employment of between 50 – 400 construction workers per day between 2025 and 2033.

AELTC bought the lease of the nearby Wimbledon Park Golf Club in 2018 for a reported £65 million.

The Deputy Prime Minister, Angela Rayner, has indicated that she will not call in the plans for ministerial scrutiny.

Mr Pipe commented that the scheme will bring "a huge range of economic, social and cultural benefits which will contribute to building a fairer, greener and more prosperous London for everyone."

You can read more here.

Kier and Galliford Try among winners on £3.7 billion Wessex Water Framework

Wessex Water has named all of the consultants and contractors with whom it will be contracting during its eighth asset management period (AMP8) running from 2025 – 2030.

Among the winners were Kier, who are set to see £3.7 billion of investment from the Water company across Bristol, Somerset, Dorset and also parts of Wiltshire, Gloucestershire and Hampshire.  Galliford Try won two slots across both design and build projects and mechanical and electrical.

Wessex Water provides services to 1.4 million customers and sewerage services to 2.9 million customers.  Its Delivery Director, Paul Lewis, commented that "these awards will enable a much wider reach for the delivery, training, development, secondments and apprenticeships across the partnership for a programme that is more than double the size of our AMP (2020-25) commitments."

You can read more here.

Court gives guidance on liability for adjudicators' fees and "substantial" remedies for late payment (A&V Building Solution v J&B Hopkins [2024])

The Technology and Construction Court (TCC) was asked to determine the issue of liability for an adjudicator's fees.  The present judgment was the sixth in a series of judgments concerning a claim referred by the claimant against the defendant to adjudication.  The TCC held that it could not revise an adjudicator’s decision on liability for his fees, even though it had reversed his decision on the merits of the case.  Further, it found that a contractual interest rate of 2% above the Bank of England base rate was not, in the circumstances of the case, a "substantial remedy" for late payment within the meaning of the Late Payment of Commercial Debts (Interest) Act 1998 (LPCD(I) A 1998).  This case is a reminder that an adjudicator’s decision on how their fees and expenses should be allocated between the parties cannot be revised in litigation or arbitration.  It follows that if a party was unsuccessful in adjudication and ordered to pay all (or a share) of the adjudicator’s fee, it will remain liable for that payment — even if, in later court or arbitration proceedings, it successfully overturns the adjudicator’s decision on the substantive issues.

You can read the judgment here.

Build costs set for 15% rise

Building costs are set to increase by 15% over the next five years, according to a new forecast by the Building Cost Information Service (BCIS).  The data company said that tender prices will rise by 20% in the same period.  BCIS has forecasted rapid growth in housing, from 2025 onwards, as pent-up demand is likely to feed through to house price growth.  This will hopefully encourage developers to start building again.  Further, the recent modest base rate cut is likely to improve affordability, as home buyers adapt to what looks like being the new normal and interest rates settle at around the long-term trend of between 4% and 5%.

Labour remains the main driver of input costs, although BCIS forecasts that the overall increase in the Labour Cost Index will slow over the next five years.  BCIS recognises that insolvencies in the supply chain represent an ongoing source of concern for the sector, in terms of capacity and impact on cash flow.

Dr David Crosthwaite, Chief Economist at BCIS, noted that Labour's "Get Britain Building Again" slogan is promising but there is a lack of detail around many aspects, from its housing plan to public sector funding and major project reviews.

You can read more here.

Redevelopment of Sutton on Sea Colonnade progressing

The multi-million redevelopment of Sutton on Sea Colonnade is advancing smoothly, with steelwork and drainage completed and the structural steel frame now being installed.  The project, led by G F Tomlinson, is part of the Mablethorpe Connected Coast Town Deal, receiving £4.2 million in government funding, with additional support from East Lindsey District Council.

Key enhancements include new retail spaces, a sea-view café and restaurant, improved promenade access, and recreational areas such as beach huts and community gardens.  Popular features like the paddling pool and tennis court will be retained.

Adrian Grocock, G F Tomlinson's Managing Director, expressed pride in their progress, while Councillor Martin Foster praised the project for its potential to boost tourism and local investment.  The revitalisation will deliver significant benefits to both residents and visitors along the Lincolnshire coast.

You can read more here.

Government offers redundancy pay advice for ISG staff

The Government has pledged to support former ISG employees following the company’s collapse. The Insolvency Service announced that eligible staff from any of the eight ISG companies in administration can apply for redundancy pay, including statutory redundancy, pay arrears, compensatory notice, and holiday pay.

Companies affected include ISG Central Services Ltd, ISG Construction Ltd, and ISG Fit Out Ltd, among others.  However, workers and self-employed contractors are not eligible and should register as creditors with Ernst & Young (EY).

Approximately 2,200 employees were made redundant immediately, with more layoffs expected.  The Government has committed to processing redundancy claims within six weeks. Dismissed employees can apply by emailing isgemployees@uk.ey.com for a case reference number and submitting claims through the Government's website.

You can read more here.

With thanks to:  Catherine Stead, Jessica Ventham, Natalie Chan

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.