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Home > News > Construction, Covid-19 and ‘Covexit’

Construction, Covid-19 and ‘Covexit’

24 April 2020 | David Morris

Coming together in a time of unprecedented challenges, it was really encouraging to see over eighty people from the industry take part in our April Construction Breakfast.

While the croissants and coffee may have been self-service, experiences, hopes, fears and industry insights were shared generously during the online event.

Undoubtedly, the construction industry has faced extremely tough times since the outbreak of Covid-19. However, the sentiment in the breakout rooms and from our expert panel was forward-looking, and focussed on how the industry will regroup and recover as the first steps towards a ‘new normal’ are taken.

Construction contracts, employment matters and financial and business planning were all hot topics with our expert panel crystallising the story so far and what comes next as we move towards ‘Covexit.’

Leading the debate were Gregg Latchams’ David Morris, Head of Construction, Nick Jones, Head of Employment and executive board member, Chris Bull.

Due to the success of the event and positive feedback we will be announcing the date of our next online Construction Breakfast soon. In the meantime, here are five key takeaways from April’s event:

Contracts must go on

When it comes to construction, certainty and cashflow are kings, but while both have been hugely affected by Covid-19, existing contracts continue on. David Morris explained that Coronavirus is not automatically a force majeure event – though in future, pandemics will undoubtedly be included in contracts as such – and equally, is unlikely to be enough to terminate a contract using frustration as it likely does not render the contract impossible to physically or commercially fulfil. In the case of Covid-19 then, many sites have reached a mutual closure, but others remain open and sites, as well as suppliers, are opening by the day. In the case of any uncertainty, David stressed the importance of knowing your contractual provisions, knowing who has control of sites, keeping up-to-date records of actions, conversations and transactions and issuing notices correctly and on time, as the contracts continue on, and the courts are open for business as usual.

Beyond furlough

With six updates and counting, since the Job Retention Scheme was announced, Nick Jones pointed out that just trying to keep up with the changes and run a business at the same time was challenging enough for most employers. However, with the conversation turning gently towards ‘Covexit’, and some on-site work still taking place, it’s not too early for employers to start planning ahead. What will the structure of your team look like post furlough? Which contracts will you have? Who will you need in place to fulfil these? What cash is available for salaries? Despite there being no fixed points, Nick suggested employers who consider these questions and plan as much as possible will be best placed when recovery starts.

Cash is king

Echoing the importance Nick puts on forward planning, Chris Bull said the old adage ‘Cash is King’ has never been truer than in the current environment. As well as considering salary costs as the Job Retention Scheme is inevitably scaled back, employers and business owners should be looking at other costs. Costs relating to premises, suppliers and other items on the balance sheet should all be reviewed as a matter of course. Businesses should not forget to look outside their organisation for help too. Talking to the bank, the HMRC and local council are all worthwhile. Admittedly, many businesses have been frustrated by slow responses. However, these organisations are catching up and deferring an HMRC payment or getting a business rates holiday from the local authority could really boost cashflow for some businesses.

Don’t neglect the pipeline

The audience were reminded that even when circumstances are tough and they are understandably focussed on the ‘here and now’, the new business pipeline should not be neglected. As a business development professional, Chris Bull highlighted the need to keep tracking the weekly sales pipeline and having regular new business meetings. However reduced, understanding what’s coming in and what might is a crucial part of business planning. It promotes a sales culture but also determines future cashflow, staff needs and is also required by financial institutions should future support be needed.

Relationships matter

A common thread across all the topics being discussed during the breakfast was the importance of relationships. Without strong relationships in place, contracts which are most vulnerable now may have already been weak before Covid-19. Employers who have strong relationships with their employees will be able to harness these to work with them positively and get through the next six months. Equally, organisations who treat their own suppliers and customers fairly will be remembered for it in the years to come, way beyond the current pandemic.

Interestingly, since the Breakfast, major housebuilders Vistry, Persimmon and Taylor Wimpey have all announced that they are reopening their mothballed sites – Vistry and Persimmon next week, and Taylor Wimpey a week later – in a move that we believe will signal and shift further forwards towards Covexit in the construction sector.

The Gregg Latchams team are on hand to provide advice and guidance at this time. You can find up-to-date information across a range of topics on our dedicated Business Advice Hub. To contact one of the team please call 0117 906 9400 or email 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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