Features
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The Knowledge
LBM’ s test of what readers know about London
Which Alfred Hitchcock film was set around Covent Garden?
How many London MPs are there in new Prime Minister Andy Burnham’ s cabinet?
Which London place of worship hosted the funeral services for Lords Nelson and Wellington and Prime Ministers Churchill and Thatcher?
Olympia recently hosted the UK’ s first ever elite professional tournament for this – one of the world’ s fastest growing sports. What is it?
Which American-born SPACE painter is known for his images of Victorian London including many of a fog-bound Thames?
What feature in London has been described in a poem as a“ strong brown god … keeping his seasons and rages”?
How many of the Conservative Pary’ s three women Prime Ministers represented London constituencies?
Which constituency did former mayor of London Ken Livingstone represent as an MP?
Which London stadium hosted the world’ s first floodlit cricket match in 1952?
Who wrote and performed the song So Long, London?
Find the answers on page 69
By Alecsandra Dragoi / No 10 Downing Street, OGL
3, https:// commons. wikimedia. org / w / index. php? curid = 196791206
The UK construction sector has long ranked among the industries with the highest insolvency rates, and the current financial environment is causing its foundations to shake. Menzies recently launched their latest research report, Fixing the Foundations: Addressing the Fault Lines in UK Construction, to explore the reasons why and what can be done to address the inherent issues across the sector.
Pressures The report found that nine in ten construction firms are already in or approaching financial distress with several key factors contributing to these findings. Cashflow remains a serious concern as the same number of firms experience late payments whilst significant delays to projects can ultimately cause those contracts to become unprofitable.
Labour shortages are also becoming another structural challenge with an ageing workforce and reduced pool of experienced tradespeople. To tackle this, firms are focusing on investing in graduates, apprentices and candidates with potential rather than experience.
Long-standing challenges, many shared across other industries, have continued to expose cracks in construction’ s foundations. Regulatory and compliance costs are placing increasing pressure on firms’ financial health. Strain is also being added, especially in relation to fixed-price contracts, from rising labour, energy and material costs and supply chain disruptions. Firms ultimately have little control over external pressures such as rising inflation and geopolitical events, adding to the uncertainty that has become a defining feature of the construction sector.
Rebuilding confidence The impact of the pressures weighing down on the
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A FINANCIAL BRICK WALL
BY GARETH REES construction industry are not expected to go away anytime soon, however, understanding those factors can help firms push through these difficult times. Having a robust business plan in place, using live financial data and forward-looking forecasting can help. Firms should account for the impact of inflation and impose fluctuation clauses when tendering and fixing contracts whilst also actively managing retentions and maintaining a disciplined debt collection process.
Regulatory change is also in the pipeline and may provide some relief. Measures are being proposed which will provide stronger powers to tackle poor payment practices including a 60- day cap on business-to-business payment terms and an overall ban on construction retention payments.
Conclusion Ultimately, businesses that can recognise the warning signs and act whilst maintaining accurate financial information, will be in a better position to navigate current pressures and build lasting resilience. As a sector, which is one of the largest economic contributors, employing hundreds of thousands of people, let’ s hope it can build towards a brighter future.
To read Menzies report in full visit: www. menzies. co. uk / fixing-thefoundations.
Gareth Rees is a Director in the Restructuring and Insolvency team at Menzies LLP.
grees @ menzies. co. uk + 44( 0) 3309 129 864 www. menzies. co. uk