Government Advocacy Programme to support the Profession through COVID-19

In the wider construction context, RICS have communicated the following top line concerns arising from COVID-19 –

• Skills shortages, on top of Brexit, are not to be under-estimated; we are already facing a retirement cliff edge
  
• Housebuilding and infrastructure are two key planks of the government’s strategy – there is a risk to recovery if support and clarity is not now given (particularly for SME’s)
  
• Much life-safety critical maintenance is carried out by SME’s and the self-employed. If capacity is substantially reduced, this presents risks across many types of buildings both in the immediate and longer term
  

•  RICS, with RTPI and RIBA, issued a letter to Government supplementing the calls we made through the CLC, and making an offer to Government to provide access to information and resource hubs, and to work with firms with portfolios in the hospitality or residential space that could be utilised by the NHS.
• In the letter RICS further urged the Government to provide assurances to the sector by ensuring that long overdue legislation, such as the forthcoming Building Safety Bill are not interrupted.  We therefore welcome the recent publication of the Governments response to the ‘Building a safer future: proposals for reform of the building safety regulatory system’ consultation, which hopefully signals a commitment to Building Safety Bill staying on schedule.
• Access the full letter here
  

A letter from the Secretary of State for Business, Energy and Industrial Strategy, issued on the 31st March 2020, maintains the Governments position that construction activity can continue, providing it is done safely in line with PHE guidelines. See the published letter here.

Scottish Government have announced (7th April 2020) that all non-essential construction work should cease immediately due to COVID-19 concerns. Guidance published by the Scottish Government advises on construction sites and associated works that can continue under specific conditions, and that those that cannot meet the requirements stop operations. 

Scottish Government guidance can be found here

’The NI Executive, Department for the Economy, has published guidance on making workplaces safer and a list of priority sectors which can be found here – it should be noted that the guidance is for advisory purposes only, with the decision on whether to proceed with any construction activities being left with individual companies

Specific construction Government measures include The Cabinet Office publishing model contract variations for JCT and NEC contracts. The new contract variations will support the Government’s procurement policy note 02/20: Supplier relief due to COVID-19, which is relevant until end June 2020, and sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coronavirus outbreak.

As members of both the Construction Industry Council (CIC) and as representatives on the Construction Leadership Council (CLC) advisory group, RICS have fed into joint work strands across the issues of viability of site operating procedures, consultant site inspections and post COVID-19 stimulus. RICS supported a CLC letter issued to the UK Prime Minister which outlined the following sector recovery proposals -

• Suspend PAYE and CIS tax due to HMRC in April and May for construction and consultancy firms and workers with no financial penalty;
  
• Defer/cancel Apprenticeship Levy payments for the duration of the crisis;
  
• Government to advise all public sector clients, regulated utilities, and firms in the private sector to expedite cash flow throughout the supply chain;
  
• Support the directors of micro-businesses, who currently fall between the support provided by the Job Retention Scheme and assistance for the self-employed;
  
• Direct all Government bodies to release all retention monies, which are estimated to total £4.5 billion across the supply chain; and
  
• Extend the £25k SME business continuity grants scheme to the construction sector.
  

The letter further specifies a number of recent CLC publications including -

• The Site Operating Procedures – which sets out a practical range of measures for construction sites to comply with Public Health England’s guidance on distancing and hygiene
  
• The Safe Shutdown Process – which provides guidance to site managers when it is deemed not possible to continue work,
  
• A Minimum Essential Works List – which seeks to identify the sorts of works that need to be allowed to continue in almost any circumstances.
  

The full letter can be found on the CLC website here.

Additional CLC guidance includes –

• Advice on Temporary Suspension of Sites
  
• Construction sector access to the furlough scheme
  

RICS fed into and supported a letter issued by the British Property Federation (BPF) to the Secretary of State at the Ministry for Housing, Communities and Local Government (MHCLG) asking for greater clarity on essential works, key facilities and safety critical services to buildings.

BEIS have since published updated Social distancing in the workplace during coronavirus (COVID-19): sector guidance - including sector specific advice to 'Tradespeople and working in people’s homes' and 'Construction'.

RICS, with CIOB and the national architecture bodies (RIAS and RSAW), have issued letters to the construction Ministers of Northern Ireland, Scotland and Wales calling for a gradual re-opening of construction sites, the establishment of a maintenance programme, and the introduction of a VAT rebate funding scheme.

Access the letters full here

Read our press release and download the full survey

In the wider residential context, RICS have communicated the following top line concerns arising from COVID-19 –

• There was a lot of uncertainty around the home buying and selling process, and how properties already on the market, or subject to offers, were to be treated.
  
• Business rates relief for lettings and estate agents, with work slowing down and social distancing measures being put in place, work could not continue as usual. These business types needed to be supported just as much as others on the high street.
  
• Much life-safety critical maintenance is carried out by SME’s and the self-employed. If capacity is substantially reduced, this presents risks across many types of buildings both in the immediate and longer term
  

RICS has been working with Government on many different areas below are Government advice and announcements that RICS were involved in discussions with Government whether as part of a joined up industry push or as part of our role liaising with Government departments.

•  Buying and Selling process
• Residential lettings
• Business Rates relief
• Remediation of dangerous cladding
• Right to rent checks

RICS has also updated our RICS Valuation (Global Standards red book) and Personal Indemnity Insurance to help our members adhere to Government advice, but not go against the standards they are regulated to. Further details are provided in the Profession and Practice section of this website.

Ongoing and Future Activity
There are still issues that RICS is aware of and are continuing our work in engaging with Government on including:

• The need to include commission pay for agents in the Coronavirus Job Retention Scheme
  
• PII renewal- whilst we have updated our guidance around this we are still working on the issues members are experiencing.
  
• Local authority confusion with regards to business rates and addressing the lack of consistency in applying guidance.
  
• Energy performance certificates for new or current lettings
  
• Gas safety
  
• Energy efficiency measures
  

RICS in collaboration with RIBA and RTPI sent a letter to the Prime Minister around construction issues, but within the letter we also highlighted measures to help the planning sector during COVID-19 and asked the Government for:

• Additional short and medium term funding to cover staff absences or redeployment to maintain operating capacity within planning departments;
• A temporary relaxation of time limits for planning applications to allow local authorities to prioritise cases to reflect health and safety considerations and the nature of requests;
• Waivers to allow the deferral of requirements for information if planning officers judge a request to be of low or no impact;
• Greater flexibility around the operation and submission of evidence to planning committees.

We are also continuing to engage with Government and will be looking to engage and influence on the following issues:

• Housing delivery:
 Cash flow issues
 S106 and CIL payments: and
 Measures that will help stimulate the market.
• Planning system:
 Short term planning reforms to address the critical delivery situation without a loss in standards.
 Longer term planning reforms to bring more certainty for communities and developers about what is to be delivered, without a loss in standards.
 Accelerated use of technology to engage with communities, develoers and decision makers
 Review of viability assessment in planning in the new context

RICS is in regular contact with MHLCG to raise a range of issues, some of which have been resolved. The most progress that has been made is on business rates and grants and getting them applied to estate and lettings agents, along with pressing to make sure that local authorities are consistent in the application of business rate relief. We have also had success on Right to Rent checks.

We are exploring estate agent commission and dividend-based salaries to be included as part of the furlough scheme, as well as a phasing out of the furlough scheme as opposed to an abrupt stop.

Key issues that have been raised:

• Business rates and grants to be applied to estate and lettings agents
  
• Gas safety
  
• New electrical regulations
  
• Essential maintenance
  
• Energy Performance Certificates
  
• Issues with non-payment of rent/confusion about language being used ‘rent holidays’
  
• Impact of losing commission as well as salary for agents.
  
• Agents struggling to get finance from lenders.
  
• Right To Rent checks
  
• Issues with developers and handovers
  
• Local authority confusion with regards to business rates – lack of consistency in applying guidance
  
• Support for commission and dividends to be included with regards to job retention scheme
  

We have been engaging with MHCLG on inspections and viewings and visits of private residential properties to seek clarity on current social distancing measures for home moving. In addition, we have been approached by MHCLG to share our views on post lockdown suggestions as they look to update guidance once stay-at-home measures are lifted.

In addition, we are working in collaboration with the residential property sector to:

• provide industry recommendations to MHCLG, specifically on physical contact with people and/or when entering homes i.e. physical inspections and visits
  
• Seek clarity from the government on post-lockdown measures to ensure to ensure consistency across the entire home moving process.
  
• This UK cross-industry initiative will be followed by industry and consumer guides on home moving to ensure safe, clear, transparent, consistent and smooth process for all parties.  
  

In the wider construction context, RICS have communicated the following top line concerns arising from COVID-19 –

• We wrote a joint letter with the Institute of Revenues Rating and Valuation (IRRV) and the Rating Surveyors Association (RSA) addressed to the Chancellor and Minister for Local Government to outline our proposals on how the rating system could be used to provide assistance to ratepayers business.
  
• Initial measures of business rates relief on retail, leisure and hospitality sectors, by UK and devolved governments, didn’t go far enough – and these were duly extended to includes estate and letting agents
  

The Chancellor has introduced a range of temporary measures aimed at supporting high streets and commercial market participants businesses, including:

• A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England – extended to include estate and letting agencies
  
• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
  
• A number of the schemes offering loans and grants for large and small businesses (see Profession and Practice section)
  

Scottish Government introduces new measures to protect business tenants
The Scottish Government's Minister for Public Finance, Ben Macpherson MSP, has written to the main business organisations in Scotland to promote new powers introduced in the Coronavirus (Scotland) Act; such as an extension to the notice period for commercial leases from 14 days to 14 weeks before a commercial lease can be terminated for non-payment of rent. RICS welcomed the Minister's advice to seek professional advice.

• Evidence from RICS commercial property members show that rental payments due monthly in March (it was quarter day on 25th March) fell significantly. Early indications are that only 30 to 40% of tenants have paid. Whilst some have been in touch with agents to arrange a rent holiday or concession but others have simply not paid.
  
• Similarly, commercial landlords find themselves in an unequitable situation where they are still paying empty property relief, despite inability to open property for viewings.
  
• RICS is collaborating with the Property Industry Alliance (PIA) in gathering evidence to inform the UK Government on a need to examine this situation and make change
  

As the policy landscape for the sector rapidly evolves, UK Government have made a number of relating key announcements to support businesses; these include:

• Extended Coronavirus Business Interruption Loan Scheme (CBILS)
  
• New Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  
• Coronavirus Job Retention Scheme
  
• Self-employment Income Support Scheme
  

RICS was very vocal in urging Government to support for the self-employed, and we are now calling for Government assistance for those whose salary is commission based.

Full details of the UK Government’s implementation of business support, including rates reliefs and grants, in response to the Covid-19 virus can be found here.

The devolved nations received additional funding (totalling £5.3bn) under the Barnett formula to support businesses. Further details of help available for companies in the devolved nations can be found here:

Scotland
Wales
Northern Ireland

RICS published important guidance to help our members ensure they are able to deliver valuations that allow them to adhere to Government advice, but not go against the RICS Valuation – Global Standards red book to which they are regulated and so as to not undermine the strength of RICS standards.

This guidance was sent to MHCLG, BEIS, VOA, HMT, No 10 and the FCA, and has led to regular dialogue with MHCLG around valuation and inspections, developing an inspection protocol for immediate use when lockdown rules change.

We also have weekly update calls with Financial Conduct Authority (FCA) to talk through the market and RICS activity. The FCA have also issued instructions allowing fund managers to dispense with the requirement for physical inspections for now thereby allowing valuations to continue. FCA cited RICS in the announcement and our guidance as being the reason for the decision.

Further sectoral engagements have led to a protocol with UK Finance when valuing on restricted information; biweekly calls with Department of International Trade to update on market activity and advising on what the market needs to allow activity to return; and we hosted a regulator round table (Bank of England, MHCLG, FCA, Association of Real Estate Funds (AREF)) to discuss issues of material uncertainty and valuation.

RICS will be writing to Government to increase awareness of the challenges faced in procuring PII, the impact that this is having – and/or will have – on key surveying activities (that will be passed onto the functioning of the market), and to call on the Government to work with us on solutions.

We have already issued a press release which describes the actions we have taken thus far. You can read this here.