How can we raise standards in the building industry? Alli Gay of CHI Homes explains how one SME housebuilder is doing its bit.
Our daughter has been helping out in CHI office over the summer and asked me why we don’t pay our tradespeople in cash when they ask? Was it to do with taxes she wondered? She was partly correct, but taxes are only part of the answer.
It seems there is good reason why the Federation of Master Builders (FMB) recently revealed that 80 per cent of builders and homeowners are calling on the Government to introduce a mandatory licensing scheme for the UK construction industry. Although an excellent idea, introducing a licensing scheme will take time, and so in the meantime, what can we as an SME developer do to help raise standards and improve our credibility?
Firstly, paying for ‘cash in hand jobs’, doesn’t help our reputation. It encourages the wrong type of tradesperson and, most importantly, is undercutting the ‘bona fide’ business. All our tradespeople sign a set of terms and conditions and we check to ensure they are registered with the HMRC. This needn’t be onerous or expensive, as, for example, the FMB provide a Subcontractors Contract which members are entitled to download. If a subcontractor doesn’t want to sign, then we don’t work with them, as frankly this sets the alarm bells ringing. I have only had three tradespeople in four years that have refused to sign.
Secondly, we should ensure we are employing trades that only possess the right skills, qualifications and competencies to carry out the work, including health and safety awareness. With 70 per cent of fatalities occurring on small sites I continue to be astounded by the response I get when requesting health and safety information. More frequently than not I hear; ‘I have never been asked for that before’ and ‘What is CDM 2015?’. We could do more to encourage credible, competent tradespeople with the correct health and safety awareness and training and avoid employing those that aren’t. As a company we are working towards only accepting tradespeople who possess Worksafe Certificates for example CHAS or SMAS. In the meantime, our health and safety consultant has provided us with a competency assessment form, which we use during the procurement process.
Finally, we should be ensuring that any tradesperson is registered with the HMRC under the CIS scheme, and that they are adequately insured and solvent. We use our HMRC portal to check CIS status and deduction amounts by simply collecting their unique tax reference (UTR), company registration or National Insurance number and name. We also run a Companies House check if the trade is a limited company and check their filing history. All of the above builds a picture of the subcontractor, and all these checks are free!
In conclusion, the introduction of a well policed, mandatory licensing scheme covering all construction work with adequate levels of skill expectation would not only help to streamline our admin burden, but more importantly would potentially raise the skills bar. Nobody wants to work with poor tradespeople, no matter how cheap they are, as it’s usually a false economy with the additional expense of putting right poor workmanship. In my experience, the more organised a tradesperson is in terms of their paperwork, the better the standard of work and the easier the job is to administer.
At CHI we are also experimenting with the use of trade tenders for major pieces of work that are in some part already regulated, like electrics and plumbing. For unregulated tradespeople, I now have a two-pronged approach. I firstly talk to the owner/director about our requirements, emphasising how we are a bona fide company running a safe site, looking to work with likeminded companies. At that point, if I am met with resistance, we part ways. By the time we are at the order stage, the scene has been set and expectations are clear. We are also working on raising our own internal standards by assisting our tradespeople with gaining a health and safety qualification, via e-learning. We are also putting together a ‘preferred supplier’ list of legitimate tradespeople who already possess the correct set of skills, qualifications and HMRC registrations and we welcome approaches from those legitimate firms. All of the above is set out in a simple standard email to subcontractors, so it’s straightforward to administer.
So, who is at fault here, is it the tradespeople? Or are we failing in our duty as SME developers to ensure we keep standards high, because it means an administrative burden to do so? One thing is sure, we certainly need to play our part. We would all benefit from belonging to a transformed industry ensuring we leave a more favourable impression of our sector with our clients. Wouldn’t we all prefer to be automatically considered ‘professional’, rather than ‘rogue’?
