How does the housing industry manage the implications of suspension of works in response to the current public health crisis; which current actions will best assist the resumption of work, and where should longer term stimulus to the market be applied to best effect?
Around the sector, the picture is mixed; volume house builders have generally closed sites with some exceptions. Design and build contracts for housing associations are continuing in some areas and some larger housing associations and build to rent developers are moving ahead with development plans.
Chief Executive of The Housing Forum, Shelagh Grant, says, “Our members tell us the aim should be to achieve balanced outcomes for all parties. Regular contractual arrangements and reactions do not apply in these circumstances. We need to re-frame the relationship through partnership.”
Many in the housing sector are taking difficult decisions to close development sites, temporarily suspend works and/or reduce construction services to only the essential maintenance services to be provided to residents. Looking forward, planning for a managed return and securing products and materials supply is critical to all.
The Housing Forum review urges: “As decisions are made, the relevant contracts must be reviewed to understand how risks of suspension and site closure can be shared between the parties. For the industry to benefit from recommended measures to deal with the housing supply interruptions, it will need greater clarity from government on how construction can operate safely during this period of social distancing, and this needs to be at a level which the whole supply chain are prepared to operate on.”
Stephen Teagle, Chair, The Housing Forum, adds, “Government and, in particular, Homes England, have a track record in encouraging partnership solutions and in designing market interventions at points of market stress to support the housing industry. The Housing Forum will share its proposals and work with Homes England to support housing supply and provide resilience across the supply chain.”
As well as providing a legal and consultants’ Thought Leadership Group view on its website, the Housing Forum provides a five point plan for connecting the whole team:
- Many suppliers have had to make the decision to close distribution networks. Priority has to be staff safety and closure has been made necessary due to the lack of clarity from the government on which work should or should not stop.
- Those supplying into the social sector have developed strategies including five day bulk phone orders and drop off points. Suppliers could support housing providers more effectively if there was a common/shared definition of emergency repairs.
- Looking forward, the paced management of the return to construction work is in all our interests as, if reserve stocks deplete too quickly, the manufacturing and import sector could struggle to match demand.
- Procurement timescales, which can be 12-16 weeks, will hold back the return to productivity and raise questions about value in procurement and what this actually means.
- Specialist consultants in areas like design, engineering and energy are an integral part of the supply chain. Site closure has just as suddenly affected their work flow and cash flow. Clients could restructure payment time to provide forward visibility and phased payments.
For further information, visit the Partnership Working Never More Important story on The Housing Forum’s website.