JCT 2024
In Spring 2024, the JCT is due to start publishing the new 2024 suite of contracts, to include a new family of contracts for procuring work on a target cost basis, plugging one of the major gaps in the JCT’s offering.
Changes to the contracts are expected to include:
- updates for building safety, to include provisions for the allocation and discharge of the duties under the new building regulations’ dutyholders regime, which is expected to take a similar approach to existing CDM Regulations drafting found in JCT contracts;
- alignment with some of the principles from the Construction Playbook such as collaborative working;
- off the back of the recent experience of the Covid pandemic, changes to the provisions for additional time and money which may be claimed – it will be interesting to see how the JCT approaches this risk;
- provision for digital signatures which again has been a change coming out of the pandemic; and
- alignment of the termination provisions with changes in insolvency law (CIGA 2020).
It remains to be seen whether the JCT will decide to develop any amendments which are specifically aimed at projects involving higher-risk buildings. The JCT will no doubt be pleased to have avoided the need to tackle the complicated transitional provisions to be found in some of the building safety legislation, with the publishing dates starting at around the end of the transitional provisions in April 2024. See here for our Expert Insight on updates to standard form construction contracts.
Payment in the Construction Industry
Certain changes announced in last year’s Autumn Statement are expected to impact the construction industry:
- reforms to the gross payment status test applied in the Construction Industry Scheme, which are to be made through the Autumn Finance Bill 2023, will see a simplification of some aspects of the test and with the inclusion of VAT in the compliance test; and
- from April 2024, for those bidding for government contracts over £5m, a requirement to demonstrate average payment periods for payment of their own invoices within 55 days, reducing to 45 days in the following year and 30 days in the years thereafter.
Procurement Act 2023
Having received Royal Assent on 26 October 2023, the Procurement Act 2023 is not intended to come into force until October 2024, with an anticipated 6 months’ transitional period following thereafter.
This is a major consolidation exercise, with contracts currently regulated under the following current legislation coming within the unified Procurement Act 2023:
- Public Contracts Regulations 2015;
- Utilities Contracts Regulations 2016;
- Concessions Contracts Regulations 2016; and
- Defence and Security Public Contracts Regulations 2011.
This new legislation is intended to “put at the heart of our procurement system” value for money, public benefit, transparency and integrity. A criticism often levelled at the current procurement system has been that the processes rarely lead to value for money.
Contracting authorities will hopefully enjoy the greater flexibility promised to be delivered by the Act though, with the promotion of the requirement for transparency, there will undoubtedly be some who will find the volume of notices required to be issued at the stages of planning, tender, award, implementation and contract end to be administratively burdensome.
There is expected to be a considerable amount of secondary legislation required to be published before the Act goes live. It is hoped that the construction industry’s recent experience of last minute delivery of some of the secondary legislation under the Building Safety Act 2022 will not be repeated here, to allow procurement teams to properly plan and upskill for the introduction of the new Act in good time.
