Plant hire firms are facing a triple threat of tax pressures, road regulations and mental health concerns, an industry trade body leader has told Construction News.
Construction Plant-hire Association (CPA) chief executive Steven Mulholland reiterated opposition to changes in inheritance tax thresholds announced by the government in its October budget.
He said: “It’s certainly more difficult now for our 1,950 members – and 85 per cent of them are family-run businesses.
“We’ve got to deal with business property relief, pensions and fund the living wage. We’re not against the living wage; it’s a commitment but it has to be funded. On top of that, we’ve been hit by NI [employers’ National Insurance Contribution (NIC)] increases. It’s very, very narrow-minded.”
Mulholland added that the inheritance tax and NIC issues feed into the broader mental health problems in construction, especially among small and medium-sized firms that comprise the bulk of the CPA’s membership.
“I don’t think too many people think about the mental health of SME contractors. You are perceived as being bulletproof and unaffected by shouldering the burden of running a company,” he said.
“We’ve come a long way as an industry, but we’ve still got a long way to go. Sometimes, the intervention is when someone just takes time out to listen to you. If you create a culture where people are trying to do the right thing, that makes a difference.”
In May, a survey by insurance provider Simply Business found that 51 per cent of SME owners across all industries had experienced stress, and 30 per cent of respondents reported high levels of anxiety. In its conference last month, the CPA included a session on practical steps that companies can take to help their workforces, including better communication from management.
Another critical issue for CPA members has been how the police are enforcing the legislation on abnormal loads movements.
Forces each take their own approach, which restricts when firms can operate. After years of campaigning, police chiefs have now promised new guidance will go out to forces – and they will all use it in the same way.
But Mulholland also recognised years of police cuts, including to traffic officer numbers. According to the AA, there are now 4,215 traffic officers in England and Wales, compared with 5,237 in 2016.
“The police don’t have the staff to cover it [road movements across the UK] in the early hours of the morning,” he said.
Aside from the three problem issues, Mulholland does not want construction firms to lose sight of a much bigger challenge: meeting net zero emissions targets.
“We, as a sector, rely very heavily on fossil fuels. Everyone has to face the reality that the 2030 targets for non-road [mobile] machinery (NRMM) are not going to happen,” he said.
By 2030, NRMM with internal combustion power must meet the EU Stage V standard for emissions. The government is also considering reinstating the 2030 ban on the sale of new vehicles with internal combustion engines.
Mulholland said: “For every bit of equipment [weighing] over 3.5 tonnes, that infrastructure [electric charging points] isn’t there. Electric machines just don’t generate the power needed on a shift. There’s no residual value in electric equipment, mainly due to battery disposal. People are shying away from buying electric equipment at the moment.”
The latest generation of traditional plant being used by his members is still effective, he believes. “A Stage 5 diesel, which complies with the EU’s emissions standard, is fantastic. The emissions are very, very clean,” he said.
The alternative is hydrogen but manufacturers are still developing the technology.
He explains: “JCB are testing a hydrogen [internal combustion] engine at the moment. But we’re nowhere close to having that fuel portable. We need to get it into mobile tankers that can get it onto sites. But that is going to take time.
“The government can help on this. Without money, we can’t get the incentives in to change. We’re not moving quickly enough.”
