Despite the forced closure of businesses such as pubs, restaurants and non-essential shops, the construction industry has yet to have the same restrictions imposed. However, to protect their employees and curb the spread of coronavirus, some companies have decided to voluntarily close their construction sites, including Taylor Wimpey, Sir Robert McAlpine and Persimmon. In the meantime, others continue full operation amid confusion over the government’s latest round of restrictions.
In this blog, we take a look at what could happen if all construction sites were forced to close, and the financial support that is available for businesses, employees and contractors struggling during the crisis.
Workers feel “unprotected”
Current government guidelines suggest that workers who cannot do their jobs from home should continue working to “keep the country running”. However, Cabinet Office minister Michael Gove appeared to oppose this advice by saying that only construction workers doing jobs “critical to the economy” should be continuing to work on site. Meanwhile, trade groups representing the construction industry are offering differing advice on their websites, adding to the general climate of confusion.
When interviewed by the BBC, some construction workers said they feel “angry and unprotected” when attending work, and that many are under pressure from their employers to do so.
Support for businesses
Many businesses in the sector, particularly SMEs, could suffer significant financial losses if all construction sites were to close. The government has announced a support package for struggling businesses, including the government-backed Coronavirus Business Interruption Loan Scheme, £10,000 grants for businesses eligible for Small Business Rate Relief, and government support to pay their employees’ salaries. More recently, a three-month suspension of VAT payments was also announced by the Chancellor.
However, construction businesses are not yet eligible for other support measures available to businesses in industries such as retail, hospitality and leisure. Recently, the Association for Consultancy and Engineering wrote to the Prime Minister calling for new measures to be introduced to protect the sector, including a grant of up to £50,000 for construction SMEs to help them meet the digital requirements of working from home, and accelerating the pre-construction phase of Government projects to compensate for the downturn in private sector projects.
Support for employees
Thousands of construction workers could be put in a precarious financial position if construction sites close, which is why the government has introduced a series of emergency measures to keep employees afloat during these times. The most significant measure is undoubtedly the Coronavirus Job Retention Scheme, under which employers can apply for reimbursement of 80% of salary costs, up to a cap of £2,500, for employees they would otherwise have laid off due to a lack of work. Moreover, they have introduced a three-month mortgage holiday for struggling homeowners, and, for renters, an extension on the notice period required before landlords can commence eviction proceedings. This way, construction firms will be able to retain staff and thus recommence normal activity as soon as possible once emergency measures are lifted.
Support for freelance contractors
Following complaints that the UK’s five million self-employed had lost out on crucial financial support, the Chancellor’s most recent package offers a lifeline to people who work for themselves. On 26 March, the government announced the implementation of the Self-Employed Income Support Scheme, offering self-employed people a direct cash grant of 80% of their average monthly profits, again up to a threshold of £2,500 per month.
Self-employed construction workers will be able to apply to HMRC for the grant via an online form, receiving the cash straight into their bank accounts.
We’re always happy to talk
As stated earlier in the blog, many construction sites are operating as normal, with firms therefore continuing to require insurance in order to conduct their business as usual. As specialists in Construction insurance and niche or difficult-to-place cases, we can help you help your clients keep their businesses going. Just get in touch at firstname.lastname@example.org or call us on 0345 345 0777. We’re always happy to talk.