UK Construction - Week of 27 July 2026
1. Retentions ban confirmed - start re-papering contracts now
The government's response to the Late Payment consultation (24 March 2026) confirmed it intends to prohibit deduction and withholding of retention in construction contracts, alongside a mandatory 60-day payment cap and statutory interest at 8% over base. A further implementation consultation is expected, with industry pushing for a 12-24 month transition and surety alternatives.
Why it matters: retention clauses will need deleting or set to "nil" in JCT and NEC forms - JCT hasn't yet said whether it will reissue the 2024 suite or publish amendment sheets. QSs should be pricing the cashflow shift and looking at retention bonds / performance surety now; architects acting as contract administrator need to know what replaces the defects-period leverage retention currently provides.
2. Building Safety Levy bites from 1 October - 9 weeks out
The levy applies in England to residential schemes over 10 dwellings (or 30 PBSA bedspaces), with exemptions for affordable housing, care homes and hospitals. Schemes that have started the building control process before 1 October - full plans application, initial notice, or Gateway 2 submission - escape it. NPPF reform may bring further exemptions for 10-49 unit sites.
Why it matters: this is a hard cliff-edge. Anything not yet at technical design stage is unlikely to make the deadline. Worth a portfolio sweep this week: which live schemes are close enough to submit, and what does the levy add to those that aren't?
3. Gateway 2 - signs of life, but still the programme risk
Reports suggest BSR applications are now starting to turn around within the prescribed 12-week window, a real improvement. But a refusal still means resubmission, and that compounds with the levy deadline above. The BSR itself moved out of HSE to an independent body on 27 January 2026 - the first step toward a single construction regulator.
4. Tender price forecasts are diverging - pick your source carefully
Source
2026 TPI forecast
RICS Construction Monitor
+5.6% (next 12 months)
BCIS
+15.5% over five years (costs +13.1%)
Turner & Townsend
+5% infrastructure / +3.5% real estate
RLB
+3.45% (up from 3.27%)
Materials inflation has accelerated with Brent crude persistently above $100 during the Middle East conflict, hitting energy-intensive materials hardest.
Why it matters: a 2-point spread between forecasters on the same market is unusually wide. If you're setting contingency or fixing a price fluctuation clause, state which index you're using and why.
5. Weak workload + desperation bidding = the real commercial risk
RICS Q1 2026: headline workloads at -12% (from -6%), private housing -19%, infrastructure the only positive sector at +4% (down from +12%). Profit margin expectations collapsed to -27%. 66% of firms cited financial constraints as their top challenge, ahead of planning and regulation (63%).
June construction PMI at 38.4 - sharp contraction. Insolvencies rose 4% in June to 309; rolling annual total 3,803 (down 6% YoY, but 18% above 2019).
Why it matters: contractors are absorbing price risk to win work, which temporarily masks cost inflation and then shows up as distress mid-contract. Financial due diligence on tenderers, and scrutiny of abnormally low bids, is the single highest-value thing a QS can do right now.
6. RIBA campaigning to abolish the Architects Act
RIBA has launched Towards Tomorrow's Architecture, calling for the Architects Act to be scrapped and replaced with a regime regulating architectural services rather than just the protected title, plus a Built Environment Council. RIBA expressed frustration that the King's Speech contained nothing on the Single Construction Regulator. CIAT has responded critically.
Also: a revision of PAS 9980 (Fire Risk Appraisal of External Walls) is expected this month.
7. QS skills gap is now a pricing issue
Around 20% of the senior QS workforce is at retirement age, with the gap sharpest in NEC4 contract management and digital cost modelling. BIM/digital twin cost integration is now standard on schemes above £10m. AI take-off tools (CostX, Causeway, Kreo, PlanSwift, Procore Estimating) are production-ready at Tier 1/2 - NRM2 export is supported but terminology mapping needs per-practice calibration. Birmingham City University's AI4QS report (Feb 2026) is the reference piece.
Watch list for next week
JCT statement on retention amendments to the 2024 suite
Implementation consultation on the retention ban
Q2 2026 RICS UK Construction Monitor (due shortly)
NPPF reform detail on 10–49 unit levy exemptions
PAS 9980 revision publication
Sources: RICS, BCIS, Construction News, Construction Enquirer, Construction Management, New Civil Engineer, RIBA, Pinsent Masons, Dentons, BCLP, Mills & Reeve, Norton Rose Fulbright, Charles Russell Speechlys, pbctoday.