Labour shortages could last for next two years

Business leaders are warning that labour supply problems could last for up to two years and will not be solved by the end of the furlough scheme.

CBI Director-General Tony Danker called on government to to get a grip on the situation as shortages hit construction and all other industries.

He said: “Labour shortages are biting right across the economy. While the CBI and other economists still predict growth returning to pre-pandemic levels later this year, furlough ending is not the panacea some people think will magically fill labour supply gaps.

“These shortages are already affecting business operations and will have a negative impact on the UK’s economic recovery.

“Other European countries are also experiencing staffing shortages as their economies bounce back. In the UK, many overseas workers left during the pandemic and new immigration rules make replacing those who left more complex.

“Building a more innovative economy – coupled with better training and education – can sustainably improve business performance, wages and living standards. But transformation on this scale requires planning and takes time.

“The Government’s ambition that the UK economy should become more high-skilled and productive is right. But implying that this can be achieved overnight is simply wrong. And a refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.

 

“Using existing levers at the UK’s control – like placing drivers, welders, butchers and bricklayers on the Shortage Occupation List – could make a real difference.

“The Government promised an immigration system that would focus on the skills we need rather than unrestrained access to overseas labour. Yet here we have obvious and short-term skilled need but a system that can’t seem to respond.

“Great economies like great businesses can walk and chew gum. We need short-term fixes to spur recovery and long-term reforms to change our economic model.”

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Top 20 contractor switches to employee ownership

Buckingham Group Contracting has become the biggest contractor to transfer equity to an employee ownership trust.

To mark the move to employee-ownership 530 eligible staff received a celebratory £1,000 tax free bonus.

At the same time, founders Paul Wheeler and Patricia Wheeler, and long-standing group stadia director and partner Kevin Underwood all retire from the board in the ownership transfer deal.

Long-term partners former CEO Mike Kempley and COO Tim Brown have been promoted chairman and deputy chairman, and are committed to stay with the business for 5-years and 2-years respectively.

Board of directors making up new senior leadership team

Ian McSeveney – Group Managing Director – Director since 2014Simon Walkley – Deputy Group Managing Director – Director since 2014Andrew Kerr – Group Financial Director – Director since 2018Richard Plant – Group Commercial Director – Director since January 2020>

Wheeler said: “Back in 1987 when the company was first incorporated, I never dreamt that the business, which was originally known as ‘Buckingham Plant Hire Contracting Limited’ would ever accomplish such remarkable achievements.

“With growing annual sales revenues nudging £700m for 2021, the business has attained the status of being a large corporate, widely recognised for delivering top quality projects and has become consistently established within the ‘Top Twenty’ private construction contractors in the UK.

“None of this would have been possible without the commitment, skills and dedication of our staff members, our management teams and everyone working in departments across the whole business.”

“In recognizing the amazing results that are now being achieved more than 30-years later, it is wholly appropriate that ownership of the business is being handed down from its founding partners to an all-embracing model of common ownership under the newly established Employee Ownership Trust.”

Kerr said: “There is no debt funding involved in the transaction, with a prudent initial payment to the selling owners coming from surplus reserves.

“Consequently, year-end net assets will remain robust at around £37m in 2021, close to the position in December 2019.

“The former owners are not motivated by a quick payment timeframe that might undermine the financial strength of the company in any way.

“Instead, they want to see the business remain financially strong to secure its lasting success.”

The Trust will be represented by a corporate trustee: BGC Trustee Ltd, led by independent chairman Russell Field. The Trustee Board also comprises two member directors balanced with two employee directors.

The EOT will always retain a minimum 60% equity in Buckingham, allowing for future issue of growth shares.

Employee Ownership Trust

An EOT is a special form of employee benefit trust introduced by the Government in September 2014 in an attempt to encourage more shareholders to set up a corporate structure similar to the John Lewis model.

The aim is to facilitate wider employee-ownership, albeit via an indirect holding company.

Shareholders selling their business to their employees are also crucially not liable for capital gains tax.

EOT controlled companies are also able to pay income tax-free bonuses of up to £3,600 per year to staff.

Data suggests that employee-owned businesses drive corporate performance with higher productivity, profitability and greater levels of innovations.

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C Spencer runs up loss after revenue drops 30%

Hull-based multi-engineering contractor C Spencer Engineering Group has recorded a loss for the fourth year running after revenue plunged 30% to £46m.

The business suffered a £1.7m loss in the year to April 2021 as a result of the pandemic.

But a post year-end contract dispute settlement for £3.8m for unpaid works gave the business a major boost in funds enhancing working capital.

The successful outcome of the legal case believed to be with MW High Tech Projects UK over the Energy Works (Hull) incinerator plant should also release a further £1.25 of cash held as security for bonds on ongoing contracts.

The group entered the new financial year with secured work of £53m and a pipeline of £188m.

Chairman and founder Charlie Spencer said: “While there has been a short term, sharp disruption in activity in 2020 as a result of the Covid 19 pandemic, general market activity is expected to remain positive in all sectors with Government’s committed spending in transportation, particularly the rail sector and the enhancement of existing provision of new rail infrastructure and maintenance providing significant future construction opportunities for the group.

“The structural repair, refurbishment and maintenance of bridges also provides a strong future pipeline of opportunities in a sector where the group has earned an excellent reputation for providing innovative access solutions that provide a competitive advantage.”

He added that the group’s subsidiary Slipform Engineering was undertaking concrete core construction for several high-rise projects throughout the UK with the board expecting significant growth as its market presence develops.

Builder breaks back in fall from work platform

A building contractor and roofing specialist have been fined after an employee fell five metres from a first-floor extension breaking several vertebrae in his lower back.

Liverpool Magistrates Court heard that on 11 June 2018, Grayton Building Contractors Ltd was undertaking a first-floor extension to a residential bungalow in Aughton. 

An employee was fitting fascia boards and soffits to allow roofers employed by Thomas Dean, who had arrived on site a week early, to commence work.

While stepping across a gap in the incomplete working platform to descend from the roof, the ladder, which was not tied, slipped sideways, causing him to fall. As a result of his injuries he was unable to work for eight weeks.   

An HSE  investigation found that both Grayton Building Contractors Ltd and the roofing contractor Thomas Dean failed to properly plan the work, to assess the risks and to provide appropriate supervision.  Subsequently the work at height equipment selected was not suitable and the work was not carried out safely. 

Grayton Building Contractors Ltd of Southport pleaded guilty to safety breaches and was fined £15,000 and ordered to pay costs of £3,742

Thomas Dean of Merseyside also pleaded guilty and was fined £400 and ordered to pay costs of £3,000.

Speaking after the hearing, HSE inspector Andy McGrory said: “The risks from working at height are well known. Those in control of the work have a responsibility to devise safe methods of working, which should include ensuring the use of suitable work equipment and adequate supervision.

“The incident could have easily been prevented with simple precautions including properly planning the work, undertaking a suitable risk assessment and by selecting, erecting and using suitable work at height equipment for the job.”

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