Construction wins £250m under Industrial Strategy

Image: Phil Hatcher/Dreamstime

Construction has been chosen as one of the four key industries to receive a government boost as part of the long-awaited new Industrial Strategy published today.

The government is to invest £725m in new Industrial Strategy Challenge Fund (ISCF) programmes to capture the value of innovation. The four industries which have secured sector deals are construction, life sciences, automotive and AI.

The white paper, Industrial Strategy: Building a Britain fit for the future, revealed the details which is aimed at tackling productivity problems across the UK. 

The deal, worth up to £250m to construction, was confirmed by business secretary Greg Clark and contains commitments between the government and the industry to work collaboratively in three key areas: procuring for value; industry-led innovation; and skills for the future.

In a statement, the government said: “The deal will substantially boost the sector’s productivity, through greater investment in innovation and skills, creating new and well-paid jobs and maximising its export potential. This will also reduce the environmental impact, improve the efficiency and reduce whole-life cost of new projects and buildings to help build the houses, schools, hospitals and major transport projects we need.” 

As announced in last week’s budget, the government has committed to investing a further £725m over the next three years in the ISCF, including £170m to transform the construction sector. It also pledged £64m to digital and construction training as part of the National Retraining Scheme.

Mark Farmer, chief executive of Cast consultancy and author of the government-commissioned review of the construction industry, said: “The UK’s productivity puzzle is at the core of the Industrial Strategy and I am particularly pleased to see that government has recognised the specific importance of the construction industry within this.

“More strategic investment for modernising construction technologies and associated skills and training programmes is most welcome.

“When combined with the recent Autumn Budget announcement regarding the government moving towards a presumption of using modern methods of construction for many of its programmes, this represents the single biggest and coordinated set of measures attacking construction industry modernisation since the publication of the Farmer Review last year.”

Dr Diana Montgomery, chief executive of the Construction Products Association, said: “The construction sector has great potential as a key enabler of UK economic growth, and given last week’s downgrade from the OBR for UK productivity this takes on a greater urgency.

“The newly announced sector deal for construction will be crucial for the whole supply chain over the coming years, especially if we are to help government achieve its aims of building more homes and improving the UK’s infrastructure.

“In addition, given the risks around skills shortages and productivity weakness, we welcome government’s much-needed boost to improve digitalisation and construction skills. Critical to the success of any sector deal is leadership within industry through the Construction Leadership Council (CLC) to offer an effective contribution.”

She added: “The CPA strongly encourages government to ensure manufacturers and distributors are invited to make a more significant contribution to the CLC and that ultimately what has been announced today is not harmed by the Brexit transition period and the UK’s post-Referendum deal once it has been finalised.

“As nearly 80% of construction products used in the UK are made in the UK, this long-term view will give our industry the reassurance to invest in our sector.”

John Hicks, director and head of government & public at Aecom, said: “We’re extremely enthused by the prominence of modular and the strategy to encourage the use of offsite manufacturing by government departments, we see this as an important step to modernise our industry.

“Here at Aecom we recognise that for such schemes, the design process of the future is as important as construction. So therefore we welcome the investment in education for both construction and digital skills.”