During 2011, the most noteworthy development in the construction and engineering industry was the coming into force of the amendments to Part II of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996), introduced by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act 2009). (The amendments came into force on 1 October in England and Wales (1 November in Scotland).)
In 2012, we will see the aftermath of those changes, with case law continuing to develop through the Technology and Construction Court (TCC), as parties get to grip with the new payment and adjudication rules. On a brighter note, we have the Queen's diamond jubilee celebrations and the London 2012 Olympic and Paralympic Games to look forward to.
Alfred, Lord Tennyson, Locksley Hall:
"For I dipt into the future, far as human eye could see, Saw the vision of the world, and all the wonder that would be."
In this update, we have summarised the expected developments over the next twelve months and linked to PLC's more detailed materials.
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In 2012, we will see the aftermath of those changes, with case law continuing to develop through the Technology and Construction Court (TCC), as parties get to grip with the new payment and adjudication rules. On a brighter note, we have the Queen's diamond jubilee celebrations and the London 2012 Olympic and Paralympic Games to look forward to.
Throughout 2012, PLC Construction will be following the progress of key pieces of legislation and consultations of interest to construction practitioners in its legislation tracker.
In this update, we have summarised the expected developments over the next twelve months and linked to PLC's more detailed materials.
Adjudication and payment case law develops
Following the amendments to the Construction Act 1996, during 2012 we expect to see the aftermath of those changes, with the likelihood of cases before the Technology and Construction Court (TCC) questioning aspects of the new payment and adjudication rules. For more information, see Practice note, The Construction Act 1996 changes toolkit.
Building information modelling (BIM) is a process of generating and managing building data during the building's life cycle (see Ask the team: what is Building Information Modelling (BIM)?).
In March 2011, the Government Construction Client Group's BIM Working Party published a strategy paper recommending the implementation of BIM in government projects above a certain size, by 2016. The government accepted this recommendation in its May 2011 construction strategy (see Practice note, Government Construction Strategy: Building information modelling (BIM). We therefore anticipate an increase in the use of BIM during 2012.
In 2010, the Department for Communities and Local Government (DCLG) announced that it aimed to carry out more work, including revisions to Part L of the BR 2010, but it has not announced the start of the next round of consultation on the remaining proposals (see Legal update, Future changes to Building Regulations announced). This should have been announced by the end of 2011, but it is now anticipated this may take place during 2012, with a view to the changes being brought into force in 2013.
Building Regulations consultation in Wales
In March 2011, the Environment, Sustainability and Housing Minister for Wales, Jane Davidson, announced that all new homes in Wales would be required to be zero carbon from 2013. As part of this, there will be a consultation on the proposed building regulations for Wales during 2012 (see Legal update, New homes in Wales to be zero carbon by 2013).
Building Regulations (Review) Bill continues through Parliament
On 26 May 2010, the Building Regulations (Review) Bill 2010-11 (a Private Members' Bill) was presented to Parliament. It would require a review of BR 2010 to see whether sprinklers should be installed in new and newly-converted domestic premises.
The Bill completed its stages in the House of Lords on 5 April 2011 and was presented to the House of Commons on 27 April 2011. Its second reading is listed for 20 January 2012 (see PLC Construction, Legislation tracker, Building Regulations).
The extended costs management pilot is running in all TCC and Mercantile Courts from 1 October 2011 until 30 September 2012 (see Blog post, Should I be worried about the costs management pilot? and Practice note, Costs management).
CRC Energy Efficiency Scheme (CRC)
A number of changes to the CRC Energy Efficiency Scheme (CRC) take effect in 2012, including:
The Energy Act 2011 introduced the Green Deal, which is a range of energy efficiency measures for both domestic and non-domestic building occupiers, and private sector landlords. They will receive finance from accredited providers for energy efficiency improvements, which will be paid for by energy bill savings. The government considers removing the up-front costs of making energy efficiency improvements as the key to retrofitting properties and driving down carbon dioxide emissions from buildings.
Secondary legislation will be laid before Parliament in spring 2012, with the Green Deal available from autumn 2012 in England (see Practice note, The Green Deal).
From 1 January 2012, new IFC Performance Standards (which increase requirements on environmental issues, climate change, social issues and human rights) will replace the 2006 IFC Performance Standards in Exhibit III to the Equator Principles (EPs) (see Legal update, Equator Principles Association announces new performance standards).
During 2011, the government launched a number of health and safety initiatives, including its March 2011 report, Good Health and Safety, Good for Everyone, its Red Tape Challenge and the independent review of health and safety law carried out by Professor Löfstedt.
health and safety guidance for small businesses will be simplified;
businesses will get simple and consistent guidance from the HSE, professional bodies and insurers on whether and when they need to bring in expert health and safety advice;
low risk businesses that manage their responsibilities properly will no longer be visited by inspectors; and
legislation will be brought forward to abolish the Adventure Activities Licensing Authority.
By 2013:
self-employed people whose work poses no threat to others will be exempt from health and safety law;
Approved Codes of Practice (ACoPS) will be reviewed to give businesses clear practical examples of how to comply with the law; and
unnecessary health and safety regulations will be revoked.
The government's Red Tape Challenge will have a housing, planning and construction theme from early 2012.
Implementing Lord Young's report, Common Sense, Common Safety
In 2010, Lord Young published his report, Common Sense, Common Safety. Shortly afterwards, a number of Private Members' Bills were presented to parliament to implement Lord Young's report. The bills are sponsored by Mr Christopher Chope MP and will have their second reading on 20 January 2012 (see PLC Construction, Legislation tracker: Health and safety review).
In January 2009, the government set up High Speed Two Ltd (HS2 Ltd), a government-owned company to look at the feasibility of, and business case for, a new high speed rail link between London and Scotland. The initial section of the high speed network (HS2) will link London with Birmingham.
A rolling two-year programme of public infrastructure and construction projects where funding has been agreed (see National Infrastructure Plan 2011).
The increased use of NEC3 contracts for the government's procurement of construction and engineering projects. As part of the plan's objectives, by March 2012, the government will consider development or further standardisation of NEC3 and other standard form contracts. (For more information on the NEC3, see Practice note, NEC: The NEC3 suite of contracts.)
Jackson LJ's civil litigation costs review implemented
On 5 April 2012, the Joint Contracts Tribunal's (JCT) consultation, Sustainability: Life Cycle Consultation ends. The consultation includes questions about whether the JCT building contracts should contain legally binding terms aimed at improving the sustainability of building projects.
The standard rate of landfill tax will increase by £8 per tonne (to £64 per tonne), but the lower rate will continue to be frozen at £2.50 per tonne in 2012-13 (see Practice note, Landfill tax).
The London 2012 Olympic and Paralympic Games open on 27 July 2012. For more information on PLC's materials that may assist your business to prepare, see London 2012 Olympic Games toolkit.
National Infrastructure Plan 2011 (NIP 2011)
The first National Infrastructure Plan was published in October 2010 (NIP 2010). Prior to NIP 2010, the development of infrastructure had been fragmented and reactive with no long-term plan. NIP 2010 committed the government to publishing an update by the end of 2011. In November 2011, the government published a second National Infrastructure Plan (NIP 2011).
Key dates in 2012 include:
From January 2012, introducing the "Lean sourcing" process, which will require all but the very biggest and most complex procurement processes to complete within 120 working days.
By April 2012, introducing measures to deliver better value for the UK from public procurement, including publishing medium-term plans setting out its procurement needs in a range of key sectors.
Each quarter, publishing an infrastructure pipeline, setting out a two-year forward programme of infrastructure and construction projects where public funding has been agreed.
A presumption in favour of sustainable development is central to the policy approach in the draft NPPF and this has proved particularly controversial. On 21 December 2011, the Communities and Local Government select committee published its report on the draft NPPF in which it warned that the definition of sustainable development needs to be expanded and strengthened (see Communities and Local Government Committee Report: The National Planning Policy Framework (December 2011)).
Nuclear industry
In May 2011, Dr Weightman, Her Majesty's Chief Inspector of Nuclear Installations and executive head of the Office for Nuclear Regulation (ONR), published an interim report on the events at Japan's Fukushima nuclear site and the implications for the UK nuclear industry. This was followed in October 2011 by his final report, which concluded that there is no reason to curtail the operation of nuclear power plants or other nuclear facilities in the UK.
Dr Weightman's reports made a number of recommendations to improve the safety of the UK nuclear industry. The government responded in December 2011, confirming that the UK would proceed with its current policy of nuclear being part of the future energy mix for the UK (see Legal update, New nuclear: government responds to final Weightman report on Fukushima).
Separately, in October 2011, the Office for Nuclear Development (OND) published an updated indicative timeline for the development of new nuclear power stations. This includes developers submitting the first Funded Decommissioning Programmes (FDPs) for each new power station at the start of 2012 (see Legal update, Government updates indicative timeline for new nuclear power stations).
Partnerships for Schools (PfS) and the James review
In July 2011, the Department for Education (DfE) published a consultation on its proposals to implement the James review. As part of this consultation, by spring 2012, local authorities should provide the DfE with initial investment plans for their areas (see Legal update, Government consults on its proposals for capital investment in schools).
From April 2012, Partnerships for Schools (PfS) will be abolished, with the Building Schools for the Future (BSF) programme transferring to the DfE's policy directorates and its new executive agency, the Education Funding Agency (EFA) (see Legal update, Partnerships for Schools to be abolished).
PFI reforms
The government's call for evidence (CFE), asking for views on how the private finance initiative (PFI) can be reformed to provide better value for money to the public sector, closes on 10 February 2012. The CFE asks for general views on using private finance to deliver public assets and services. It also asks specific questions on how changes to the existing PFI structure could deliver better value for money and a more balanced risk profile for the public and private sectors. For more information, see Legal update, PFI reform: call for evidence published and Practice note, PPP/PFI in the UK.
The Planning Act 2008 introduced a new regime of unified development consent for nationally significant infrastructure projects. The 2011 Autumn Statement announced that the government intends to build more flexibility into the major infrastructure planning regime, particularly in working with developers in the pre-application phase. These improvements will be implemented by summer 2012 (see Legal update, 2011 Autumn Statement: property implications: Major infrastructure planning regime).
Penfold review
In July 2010, Adrian Penfold (the head of planning and environment at British Land) published a report reviewing the regimes for obtaining non-planning consents for property development projects (the Penfold Review). His recommendations aimed to create greater certainty, achieve speedier decisions and reduce duplication and bureaucracy in determining non-planning consents (see Legal update, Penfold Review: final report published).
During 2012, the government will:
Introduce a remit for key consent and advisory agencies (Environment Agency, Natural England, English Heritage, Highways Agency and the HSE) to promote sustainable development. This is likely once the NPPF is finalised (see National planning policy framework).
Introduce a 13-week maximum timescale for the majority of non-planning consents, to speed up the consent process and give developers certainty. (Non-planning consents include environmental permits, hazardous substance consents, compulsory purchase orders, listed building and conservation area consents, highways consents and building regulation consents.)
Simplify a number of non-planning consents from early 2012.
The government aims to achieve zero carbon new homes by 2016, which the Zero Carbon Hub is co-ordinating. During 2011, the Zero Carbon Hub published the second and third of its reports (on carbon compliance and allowable solutions) considering the framework that will enable developers to achieve zero carbon buildings.