CECA adjusts day rates after red-diesel ban

The Civil Engineering Contractors Association (CECA) has said that the cancellation of the red-diesel rebate has compelled it to publish new standards for the pricing of work carried out on a day-work basis.

The trade body is made up of 300 contractor members and publishes the Schedules of Dayworks, which sets the price for civils work that is carried out when no rate has been agreed by contract.

CECA said the inflationary pressures on the industry had compelled it to carry out “the fastest ever refresh of one of the industry’s key contract documents”. The last update to the industry rates was published in 2019, less than half of the typical timescale for the pricing adjustment, which averages every seven years.

The association’s chief executive, Alasdair Reisner, said: “This edition, which is applicable from 1 April 2022, takes into account increases on key items used within the industry. The speed with which we have developed this update reflects the volatility in prices that many members are experiencing, particularly driven by recent changes in the taxation of diesel.”

Along with the termination of the red-diesel rebate, which kicks in today, it is now also illegal to use red diesel to fuel construction plant and machinery. Contractors had previously relied on the cheaper fuel, which offered a rebate of 46.81p per litre. From today, they will either have to pay to upgrade to more environmentally friendly alternatives or continue using current equipment fuelled with standard ‘white’ diesel.

A survey by CECA, published last September, estimated that the tax changes would cost small and medium-sized enterprises between £250,000 and £600,000 per year, and that half of these firms feared collapse as a result of the additional expenditure.

The construction industry had called on the government to delay the end of the rebate by 12 months. The government stood firm, stating that the benefits of switching to more sustainable fuels outweighed the short-term impact on the industry.

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