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Contractor Focus: Compliance is critical to effective legislation

A lack of compliance in the refrigeration and air conditioning sectors is a matter of real concern to Graeme Fox, md of Specialist Mechanical Services, as Ian Vallely explains.
Even the best legislation will fail if it is poorly implemented and badly enforced. This, for Graeme Fox, managing director of Specialist Mechanical Services, is the biggest problem facing the hvac sector - a chronic lack of regulatory compliance.

Graeme Fox

Mr Fox detects a real lack of courage among civil servants and politicians to put into practice what they have been preaching. He adds: 'A change of Government hasn't helped. And, with the financial situation they seem, if anything, to be backing away rather than enforcing compliance, despite the fact that the implementation of the F Gas regulation, for example, wouldn't really cost them anything.'

Mr Fox acknowledges that there is a general desire among government officials not to over regulate: 'They want to be seen not to be gold-plating regulations, which is fine. The problem is that, in the case of the F Gas regulation in particular, you actually have a piece of legislation that the industry has been asking for and wants to be properly implemented. There does seem to be a double standard where governments want to fully implement to the Nth degree every piece of legislation except those that are actually wanted by the industry.'

However, Mr Fox does not single out Whitehall; he sees the problem extending to local government and in Brussels too. 'Lip service is paid to environmental arguments. Ultimately, whether you believe in the environmental argument about man-made global warming or not is irrelevant... the fact is that the [F Gas] legislation is designed to curb emissions that we know are damaging.

'Besides, it makes sense, particularly when we are facing rising fuel costs that we should be focusing our attention on maximising energy efficiency which comes with minimising emissions and leakage. Purely from a common sense point of view, we have to make the F Gas regulation work and that is what is confusing me and people like me. After all, it's what we all want.'

He says government officials have already done the hard part - enacting the legislation. 'What they have failed to do is implement it effectively; they have left gaping wide loopholes that the cowboys will be happy to jump through.'

Training must be addressed

But a lack of compliance is not the only issue impacting on the hard-pressed building services sector. Long-term training requirements also need to be addressed, according to Mr Fox. He doesn't blame the sector for cutting back on training in the current economic circumstances: 'Nobody knows if they're going to be in business six months or a year from now. There have been two or three fairly high profile casualties in the building services sector in the last few months. Your own order book can be quite healthy, but if you're not careful who you're taking the orders from then you could still be put out of business by someone else's insolvency.'

He recognises that training is a major casualty because it involves major long-term investment.

However, he is concerned about lower standards of training over the last 10 to 15 years: 'The way NVQs are set up, the college work that apprentices have to go through does very little for their practical abilities or knowledge. The problem is that we have now got a generation of 'qualified professional tradesmen' who lack an awful lot of basic skills.

'Fault-finding skills, the ability to think on your feet and think for yourself seem to have wasted away. There is little high quality training going on now so who's going to train the next generation? Good engineers that have learned 'the right way' are going to be retiring and leaving the industry so you are left with a generation of journeymen who really aren't capable thinking for themselves. How are they possibly going to teach the next generation?'

Mr Fox believes there has to be a fundamental overhaul of the whole training scheme. 'You have to go back to proper, old-fashioned apprenticeships; not the way apprenticeships have been run in the last 15-20 years. For example, a couple of years ago one of my apprentices was on day release in his first year at college. I would ask him what he did in college. Week on week he would come back and say the course covered health and safety, learning to deal with customers, and so on; there was no learning about technology or the compression cycle. To me that was ludicrous. Why teach a first-year apprentice how to deal with face-to-face customer liaison? That is just one example where the whole NVQ/SNVQ system is askew... completely rewritten by political correctness without an ounce of common sense.'

Specialist sub-contractors face particular challenges

Specialist contractors continue to be dogged by poor payment practices including late payments and retentions. A related challenge is upstream insolvency. Says Mr Fox: 'That is very much recession-based. I believe we need more legislation to protect sub-contractors and sub-sub-contractors. Contract bank accounts have been suggested, whereby the cash is put aside by the client in a bonded bank account so that they can't touch it. If the client then goes insolvent, the money is already there. And, if the main contractor goes insolvent, the cash is protected - the receiver can't get their hands on it to pay off the main contractor's debts for example. That way you protect the supply stream.'

But, the challenges don't end with upstream insolvency. There is, says Mr Fox, perhaps too much emphasis placed on the carbon reduction commitment (CRC). He explains: 'As a specialist contractor I have always seen it as my duty of care to my clients to try and help them achieve their CRC targets. The problem is that without legislative backing and policing, and with the non-compliance with almost every regulation that has been brought in over the last 10 years, it is going to be difficult for anyone to meet these targets.

'Ultimately, contracts are driven by two things - cost and legislation. One of these has got to give for clients to jump on board. Legislation is weak because it is not being implemented and the cowboys thrive under these conditions. [Enlightened and progressive] contractors tick all the right boxes, training and certifying their employees, but it all means nothing if the cowboys can then come in turning a blind eye to the regulations.'
27 January 2011

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