New Employment Rights
The latest measures under the Employment Rights Act came into force on 6 April 2026, introducing new ‘day one’ rights for employees and placing greater obligations on employers regarding fairness, equality and wellbeing. Described by the Government as the ‘biggest upgrade to rights at work for a generation’, the recent changes include:
- Employees are now entitled to Statutory Sick Pay from the first day of illness, instead of the fourth day, and the lower earnings limit has been removed.
- Paternity leave and unpaid parental leave has also become a ‘day one’ right, and the restriction on taking paternity leave after shared parental leave has been removed. There is also a new statutory right to take bereaved partner’s paternity leave.
- Sexual harassment is now a protected disclosure under whistleblowing law, meaning that employees making a sexual harassment disclosure are protected from unfair dismissal.
- The maximum ‘protective award’ for failure to meet collective redundancyconsultation obligations has doubled from 90 days’ pay to 180 days’ pay.
Large employers are being encouraged to publish Equality Action Plans to address their Gender Pay Gap and support employees affected by the menopause. These will become mandatory from spring 2027.
To assist employers to comply with the changes, the Government has created a dedicated webpage with guidance and practical tools, which will be updated as more measures are introduced under the Act throughout 2026 and 2027. The Government has also launched the Fair Work Agency, combining the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, and HMRC’s National Minimum Wage enforcement team, to enforce workers’ rights, with penalties for businesses that don’t comply.
Delivering New Homes
The Government has now passed legislation to implement the new Future Homes and Buildings Standards, which are designed to ensure that new homes and non‐domestic buildings are built with high levels of energy efficiency. This should mean they will not require retrofitting to become zero carbon in use, as the electricity grid is decarbonised.
Under the new standards, new homes and buildings will be required to have low‐carbon heating systems, improved airtightness and higher standards of insulation, as well as solar panels equivalent to 40% of the ground‐floor area of each dwelling with exemptions for buildings over 18 metres in height. The standards will come into force from 24 March 2027for most dwellings, and from 24 September 2027 for Higher‐Risk Buildings, with a 12‐month transitional period from these dates to allow the industry to comply with the new standards. To assist the industry, the Government has published revised versions of Approved Document L (Energy and Greenhouse Gas Emissions) and Approved Document F (Ventilation).
The Government has launched the National Housing Bank with £16 billion of financial capacity to support the delivery of over 500,000 new homes. The Bank will offer a range of products, including direct lending to SMEs and guarantees to leverage over £53 billion of private investment into complex development projects over the next 10 years. It will also work closely with mayors and local authorities to issue loans and investments at lower interest rates.
MHCLG is consulting on the New Towns Programme, including the seven proposed locations for the new towns, which are each capable of delivering at least 10,000 homes. The consultation seeks views on how the new towns could be delivered and planned, and the proposed approach to design and planning policy. The deadline to submit a response is Tuesday 19 May.
There is also a consultation on changes to planning application fees designed to ensure that local planning authorities have the resources to deliver planning decisions. The proposals include a new national default fee schedule based on 90% of estimated costs, restructuring fee categories to reduce complexity for users, and local fee setting including the potential to introduce a cap. The deadline to submit a response is Monday 18 May.
Major Projects Reform
NISTA has reformed the Government Major Projects Portfolio (GMPP) to focus support on around 80 of the most nationally significant projects and programmes. The aim is to improve delivery and value for money by enabling NISTA to target advice and assurance where it is most needed, with departments and delivery bodies continuing to lead projects.
New Reforms to Payment Legislation & Improving Payment Performance
- Board‐level scrutiny – The board or audit committee of large companies who have made a ‘significant proportion’ of payments late will be required to publish commentary on GOV.UK explaining how they intend to improve payment performance.
- Maximum payment terms – From ‘no earlier than 2027’, payment terms will be capped at a maximum of 60 days, with the following exemptions: where both parties are large companies, the purchaser is the smaller party, or the goods or services are either being imported or exported. The Government has confirmed that this measure will be aligned with the Construction Act.
- Deadline for disputing invoices – There will be a statutory time limit for disputing an invoice, with businesses required to pay compensation to their supplier if they do not raise a dispute within the time limit.
- Mandatory statutory interest – Compulsory interest of 8% above the Bank of England base rate will apply to all late payments under commercial contracts.
- Additional Reporting on Statutory Interest – Large companies will be required to report on interest payments, including the value they are liable to pay and the value that has actually been paid.
- Financial Penalties for Persistent Late Payers – The Small Business Commissioner will have the power to fine businesses based on their payment reports, with the level of fine based on their unpaid statutory interest liability.
- Retention payments under construction contracts – The Government proposes to take forward a legislative measure to prohibit the deduction and withholding of retention payments under construction contracts and will consult further with interested parties on its implementation.
The Government has published its response to the Late Payments Consultation, setting out the measures that will be taken forward to tackle late payment and ensure small businesses are paid on time. Described as the ‘largest set of reforms in over a generation’, the changes include a proposal to prohibit the deduction and withholding of retention payments under construction contracts.
This is another significant step forward and the result of years of hard work by Build UK members across the whole supply chain. Back in 2018 when we began benchmarking members on their payment performance, the average time taken by our tier one Contractor members to pay invoices was 45 days and not one of them paid within 30 days, leading Construction News to state that “ensuring payment practices actually improve should be the benchmark by which Build UK is now judged”. Fast forward to today and the average is 30 days, with two thirds paying in 30 days or less.
Build UK is still the only trade organisation benchmarking payment performance, and we have proved the value of measurement and transparency in changing behaviours across a sector with significant results. The latest reforms build on all the progress that has been made to date and will enable us to move forward, particularly on the issue of retentions. It is a huge opportunity and Build UK will be working closely with the Department for Business and Trade to demonstrate that our members and the wider industry have both the appetite and the ability to continuously improve the way we operate.
The changes will require both primary and secondary legislation, which we understand will be introduced in the next Parliamentary session starting in May. There will also be further engagement with industry on how the measures will interact with the Construction Act which we called for in our response. Based on concerns raised during the consultation, including by Build UK, there will be no change to the frequency of reporting for large companies, and they will continue to be required to report twice a year.
Building Safety Consultations
Build UK has submitted a high‐level response to the consultation on the Single Construction Regulator Prospectus, supporting the Government’s ambition to integrate the regulatory system for the construction sector, in order to strengthen oversight of buildings, products and professions and support cultural change across the industry.
We highlighted that lessons must be learnt from the introduction of the Building Safety Regulator (BSR), and that the transition to a Single Construction Regulator must include sufficient resources for it to operate effectively, with minimal disruption to ongoing regulatory processes and project delivery. The success of the proposed reforms will also depend on continued collaboration between Government and industry, a proportionate and risk‐based approach to regulation, and careful implementation through a phased transition.
Build UK has also submitted a response to the consultation on proposals to streamline the building control requirements for fibre optic cabling and mobile communications mast work on Higher‐Risk Buildings (HRBs). We confirmed that we would not support the removal of any procedural requirements that could reduce the oversight that building owners and Principal Accountable Persons have of work undertaken or that could weaken the safety assurance of a building.
The BSR has launched a call for evidence on the Conditions of Authorisation, which are the criteria that underpin the operation of Government‐authorised self‐certification scheme operators, such as Competent Person Schemes. The aim is to ensure the Conditions of Authorisation remain fit for purpose and schemes continue to support safe, compliant building practices. The deadline to submit a response is Friday 5 June.
Industry Training Board Reform
In line with the recommendation in the ITB Review undertaken by Mark Farmer, the Government has now published a consultation on merging CITB and ECITB to create a single, unified Industry Training Board (ITB) to support the skills needs of employers in the construction and engineering sectors across England, Scotland and Wales.
Due to the similarities between the operating models of CITB and ECITB, the Government has put forward the case for a more ‘efficient use of resources to meet their shared challenges’. Its proposal to close one of the current ITBs and expand the scope of the remaining ITB is designed to reduce duplication and free up resources, which could be refocused on a unified skills strategy to meet industry‐wide and sector specific needs, whilst maximising the return on employers’ combined Levy contributions of £263 million. If the decision is taken to proceed with a single ITB, it is expected to be established in the first quarter of 2028.
The consultation is also seeking views on expanding the employer activities in scope of CITB and ECITB, as well as extending the maximum Levy period beyond three years. Build UK has previously set out in its ‘Levy In Skills Out’ proposal how the Levy should be used as part of a skills system which would benefit the whole industry, and we will be working with members across the supply chain to submit a comprehensive response to the consultation by the deadline of 14 June 2026.
CIS Changes
Amendments to the Construction Industry Scheme (CIS) from 6 April 2026 have strengthened HMRC’s powers where businesses ‘knew or should have known’ that fraud was taking place in their supply chain, and HMRC can now remove Gross Payment Status with immediate effect, levy a penalty of up to 30% of the lost tax, and pursue directors personally.