Another tumultuous year in politics and industry has passed in the UK. For those in construction it has been particularly difficult with the industry showing itself in a poor light, attracting much justifiably negative press comment and analysis.
The tragedy at Grenfell Tower and now the collapse of Carillion will leave a profound and lasting influence on the industry and the way others perceive it.
In the midst of all this, the Construction Sector Deal has been announced by UK Government and significant funding has been allocated to help us improve efficiency in the short and long term.
The Building Live conference in London in late November provided ample evidence that some people and organisations are embracing change and indeed seeking to positively disrupt the status quo. Most it seems is client-led, both in the public and private sectors. A key element is the move towards offsite planning and production, which requires us to standardise and optimise requirements and components.
The Construction Sector Deal has three key components:- procuring for value, industry-led innovation, and skills for the future. The procurement strand is intriguing – the Cinderella of the industry, a bolt on, and often taken for granted. Rarely does it seem to be fully integrated into the project delivery process. Good procurement is essential to deliver a better value project more likely to satisfy the client’s and users’ needs. It is as much an art as it is a science. Unfortunately the scientific side (ticking the box) continues to dominate, particularly in the public sector. We need to adopt an increasingly holistic approach to how we procure, starting at the very earliest stage of a project and continuing throughout the delivery process. In the UK and many other parts of the world, we are hypnotised by lowest price and this approach has certainly hurried Carillion on its way. According to some reports the premium for using PFI is in the order of £80bn. This has nothing to do with public or private is best but everything to do with an informed client taking risk where it is appropriate, understanding and managing those risks.
It is once again crystal clear that the current delivery model is not fit for purpose. The increasing interest and utilisation of factory-made products means that the supply chain below the main contractor is assuming more prominence. No longer can the industry simply react to what it is asked to do: the supply chain is providing alternatives for clients prepared to support them. This is where the disruption is coming from and must be encouraged. If clients can align their procurement processes and approach to risk, then the innovation and efficiency from these suppliers will flourish to deliver the high value infrastructure we need. And it will be cheaper.