Construction Management: Important Areas and Economic Context

CONSTRUCTION MANAGEMENT 1
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Construction Management 1
1 British Law: Its development and Current Legislation
The contentious and non-contentious domains of British construction law are concerned with housing, construction, infrastructure, planning permissions, and engineering. While non-contentious work often involves contract negotiation and general procurement that occurs before the commencement of construction, the contentious domain of British law is applicable when something goes wrong. The contracts drawn up at the procurement stage define the dispute resolution process. This domain of law was developed to minimize costs, and disputes are resolved through arbitration or adjudication. However, if cases are recommended for court hearings, a specialist barrister drawn from the construction Bar can advocate the case (The University of Law, 2021). Safinia (2014) has observed that confusion and disputes are commonplace in every construction industry due to inconsistencies between construction and design, diversity of specialists, and high-risk environments. Therefore, a subject of dispute resolution in British construction law is a crucial development that addresses the disagreements of the rights and legal obligations of the involved parties. While communication has been identified as one of the ways of limiting disputes in the construction industry, methods such as arbitration, negotiation, and litigation are often recommended in resolving disagreements. Besides, Safinia (2014) notes that negotiating and timely dispute prevention can always alter the process to a less adversarial settlement.
Current legislation in British law serves to resolve disputes in different capacities, including general, clients, consultants, suppliers, and subcontractors. General areas of disputes arise due to poor commendations among parties and the propagation of types of warranties and contracts. Clients can also cause disputes due to a lack of clear information or changing contracts' requirements and terms and conditions. Late payments to contractors and intrusion of one party into another are also common causes of client-related disputes. Lack of experience from consultants, poor coordination, design discrepancies, and contractors' lack of site managerial skills have been recognized as causes of disputes in construction sites in the UK. Subcontractors may also fail to follow the agreed orders of the contract, and suppliers may lack the competence in purpose and performance, which have all contributed to the development of British construction legislation (Safinia, 2014). While the Housing Grants Construction and Regeneration Act (HGCRA) of 1996 have not defined the term "dispute," the legal definition of a dispute is a disagreement. The UK legal experts recommend negotiation, litigation, arbitration, or adjudication processes to resolve disagreements based on the type of dispute.
The traditional form of dispute resolution in the UK is through litigation, a process based on law and legal doctrine requiring courts' follow-ups. According to the Arbitration Act of 1996, appeals are made to a High Court in England and Wales. Adjudication involves resolving disputes outside the courts, and this method was first introduced in the UK in the mid-1970s (Safinia, 2014). Following the 1994 Latham Report, the 1996 HGCRA provided that parties in a construction contract can always refer any disputes to an independent third party at any time for adjudication. The other two commonly applied dispute resolution methods are through an ombudsman or alternative dispute resolution (ADR). An ombudsman is an official charged with investigating an individual complaint against the authorities, while ADR is a method for dispute resolution that does not employ traditional methods (Safinia, 2014). ADR uses meditation, conciliation, and executive tribunal methods to resolve disagreements.
2 Health, Safety, and Well-being
The construction industry has the highest rates of work-related health issues, and many workers face early retirements due to stress, illnesses, and injury (Hanna & Markham, 2019). Although there have been several recent calls to improve health and well-being in the UK construction industry, health is still perceived from the viewpoint of health risks instead of a more holistic conceptualization of health and well-being. Hanna and Markham (2019) view the workplace as an appropriate site for promoting health, but there is little known about the promises and possibilities of health improvement and promotion within the construction industry. In their article, Hanna and Markham (2019) have explored the views of different stakeholders with health-related responsibilities and roles within the construction industry to examine their views of the landscape of the construction industry and its association to the health and well-being of the workforce. The authors have analyzed the construction sector as an anti-health promoting industry and discussed different industry-specific health issues to understand the challenges existing within the UK construction sector. In particular, construction workers are classified as blue-collar workers at the lowest in the socioeconomic power gradient. These workers also have lower health outcomes, increased rates of disabilities, and higher chances of chronic illnesses and death (Hanna & Markham, 2019). Construction workers have poor health outcomes due to the increased prevalence of musculoskeletal conditions such as fractures, back injuries, falls, and arthritis. Studies have also shown that construction workers have poor nutrition, which is one factor that impacts their performance. Demographics show that many construction workers are predominantly male, and this population is less likely to seek help when sick as they tend to demonstrate stoicism in the face of illnesses or pain.
Health safety and well-being are important areas in the construction industry as many studies find construction workers to be frequently impacted in terms of their physical and psychological well-being due to increased stress levels. Although health and safety have been well-defined, there is a lack of a definitive description of well-being (Smyth et al., 2019). Work-related stress also results in low productivity, absenteeism, and poor work performance. Male construction workers are at increased risk of committing suicide compared to the general working population. Work-related stress in the construction industry is an inherent phenomenon of the workplace environment that negatively transcends into personal and family lifestyles if not managed properly. The construction industry's sources of work-related stress include excessive work, uncertainty about roles, lack of career advancement, unpaid overtime, redundancy, client demands, and financial pressures (Hanna & Markham, 2019). Within the construction industry, poor health is often associated with shortening working lives among workers. Studies have also indicated that the mean rate of retirement due to ill-health in the construction industry is 5.3 per 1000, which is higher than other industries such as the emergency services, manufacturing, teaching, and postal work with rates of 2-2.5 per 1000 (Hanna & Markham, 2019). Retirement due to ill-health becomes a serious problem when it affects relatively younger workers, and according to studies, 17 percent of the retiring population due to ill-health in the construction sector is below the age of 50 years. This high rate of early retirement contributes to the 45 percent of lost working years (Hanna & Markham, 2019). While these figures have been established, little remains are known about workers who have left the industry and how their ill-health impacts their daily lives after retirement.
Although specific health-related issues have been identified in the construction industry, safety issues have not been given the importance they deserve within the sector. Safety has always been the focus of reducing the number of injuries at the workplace and deaths. These achievements have only been made at the expense of improving health and well-being. There are specific barriers to the promotion of health and well-being in the sector, and construction companies have raised concerns about the cost of health interventions. Studies have consistently shown that the structural makeup of the construction industry characterized by sub-contracting has made it challenging to implement policies that improve workers' health and well-being of workers. Short-term projects within the industry have become the usual culture that has made continuity and sustainability complex challenges to implement health and well-being initiatives. In many countries around the world, particularly in the UK, the workplace is always viewed as an appropriate place to promote health and well-being activities (Hanna & Markham, 2019). However, most industry-based interventions have always targeted workers in general industries, and there have not been programs designed to target specific industries such as the construction sector. This generalization makes it difficult to design specific activities relevant to workers whose sectors may require specific health and well-being. Therefore, working closely with construction workers and other stakeholders within the sector can help design appropriate measures that can be more relevant in addressing health and well-being issues in the construction industry.
3 The Economic Context that Relates to the Construction Industry
The construction sector has continued to play an important role in the UK economy. It is one of the largest industries of the UK economy that contributes to more than £90 billion or 6.7 percent of the UK economy and comprises more than 280,000 businesses and covers more than 2.93 million jobs, which is equivalent to almost 10 percent of the total employment in the UK (Department for Business Innovation & Skills, 2013). Before the recession, the construction sector accounted for 8.9 percent of the UK economy. However, despite economic recessions and financial crises that have continued to affect many developed economies, the UK construction industry has remained one of the largest in Europe in terms of the number of businesses, employment, and gross value added (GVA) since the 1950s as shown in Fig 1 below. Within the economic context, the construction industry is defined as a contracting construction sector or the provision of construction-related services, products, and materials. The demand for UK construction is likely to be impacted by globalization, demand for green and sustainable construction, demographic changes, growing demand from emerging economies such as Brazil and China, and the importance of technology in the sector. Experts have noted that increasing export activity and accessing foreign markets are growth drivers. Nevertheless, other factors that can drive competitiveness and growth of the UK construction sector in the long term include people and skills, access to capital, innovation capability, and supply chain development.
Fig 1. The output of the UK construction industry to the UK economy since the 1950s (Department for Business Innovation & Skills, 2013)
Domestic and global opportunities in the construction sector require a flexible and skilled workforce to drive future competitiveness and performance in the industry. The UK construction industry has increasing numbers of individuals with higher academic qualifications, although there has been a substantial reduction in apprenticeship completion in industries related to construction over the years. This contrasts with other industries that have witnessed a continuous increase in apprenticeship completion, as shown in Fig 2 below. Access to finance is also a long-term growth driver, and the ability of the construction industry to access the right form of financing is critical for operation and growth. Evidence has shown that construction contracting companies face more challenges than small and medium enterprises (SMEs) regarding financing from banks. This is partly because construction SMEs have increased risks because of smaller firm sizes and low levels of fixed capital. Late payments are also a challenge for many construction businesses, and contracting SMEs are largely unaware of finance initiatives and state programs to boost their growth.
Fig 2 Low levels of apprenticeship completion in the construction industry compared to other sectors (Department for Business Innovation & Skills, 2013)
The construction industry also requires innovation to promise firms competitive advantages, sustain growth, and survive. Innovation is key in driving competitive advantage, improving productivity, and enabling firms to capture higher-value components within the value chain. The construction contracting industry is perceived to have low levels of innovation capability, which is usually measured by research and development (R&D) compared to other industries. Studies have identified several reasons for the low levels of innovation within the construction sector, including high levels of fragmentation within the industry and limited collaboration. Procurement also serves to impact the level of collaboration, and there is sub-optimal knowledge transfer in the sector with lost learning points. Besides, the construction industry faces issues concerned about market uptake and awareness of the incentives from innovation, and there are issues about access to finance and the risk-averse attitudes towards innovation. Finally, stakeholders must ensure sustainable supply chain development to ensure long-term growth in the construction sector. The industry has a large supply chain, and almost the entire part is sourced within the UK. Estimates show that for every £1 spent on construction, at least 90 percent will stay in the country. However, the industry has continued to suffer from high levels of fragmentation, and for a typical large building project, the main contractor may be directly managing other 70 small subcontracts (Department for Business Innovation & Skills, 2013).
4 External Professional Bodies and the Role they Play in our industry
Professional bodies within the construct...