Editorial: Europe – a tricky case of elephants in the room

Elaine Knutt, Editor CM

If you look at the graphs of construction output versus its labour force between 1997 and 2007 — from the arrival of Labour to the end of the boom years — you’ll see that both lines rise in step and without convergence (thanks to Brian Green of Brickonomics on this). In other words, output rose (good), employment rose (good), but there was no improvement  in labour productivity (not so good).

But we all know what happened during those years. There was a housing and property sector boom. The Labour government had an ambitious regeneration agenda, with labour-intensive programmes such as the New Deal for Communities, BSF and Decent Homes. The arrival of hundreds of thousands of EU workers put paid to fears of a skills shortage, but in effect led to the abandonment of efforts to pursue labour-efficient pre-fabrication and offsite methods. And there was an intensive (and successful) drive to improve health and safety on our sites, resulting in well-planned working methods and an increase in supervisory roles. 

Which brings us to the figures on the UK industry’s output and efficiency versus those of our European neighbours in this month’s CM (page 42). On the face of it, countries such as Denmark, Norway and Belgium enjoy far higher labour productivity. According to the European Construction Industry Federation (FIEC), output per head in the UK in 2009 was €60,000, while in Denmark it was as
high as €185,000.

Some reasons for the difference lie in the different mix of projects in each country. Compared to the Continent, the UK undetakes more repair and maintenance (labour intensive), and fewer civils projects (plant intensive).

But it’s also true that sites across the Channel are more industrialised: typical site workers will also be more autonomous, need less management and earn more. Project teams are mostly contractor-led and definitely slimmer, with fewer layers of consultants and advisers.

So, going forward, which construction industry do we want? A Continental-style upskilled industry with high labour efficiency, investment in prefabrication and technological solutions, and better value for taxpayers’ money? Oh, and a higher accident rate among its much reduced construction workforce. Or an industry that pursues labour-intensive projects such as the Green Deal and
low-carbon retrofitting, that’s proud of the variety and innovation in what it builds, not to mention its ability to generate long-lasting career paths?

There are no easy answers, but that doesn’t mean we shouldn’t ask the questions. Post-boom, we need to develop a deeper understanding of what we do, why we do it and whether it’s working. One way is cross-European benchmarking and the exchange of ideas across borders. And another is the proposal, from the Association of Consulting Engineers, for a National Construction Research Institute. If we don’t, we could all end up paying the price of our splendid isolation.

Elaine Knutt, Editor

Vox pop

What struck you most about the Comprehensive Spending Review?

The government managed expectations very well, leaving the general feeling that the spending cuts weren’t as bad as they could have been. George Osborne made a calculated play that as the public sector cuts back, the private sector economy will pick up the slack.

Even after the cuts, there is a large public sector portfolio, construction programme and estate to operate. The public sector is paying too much for its property, construction and facilities management and needs to be receptive to ideas from the private sector if it is to reduce costs in an intelligent way.

Graham Kean, head of public, EC Harris

We’re wary of any changes that might reduce opportunities for getting young people into employment and training, so the implications of the huge cuts to the social housing budget are worrying, as we work with many social landlords.

But the renewed focus on green skills is fantastic, and the need to retrofit our housing stock is a great incentive to get young people into training. Some of the
big retailers are now offering to help homeowners retrofit their properties, so we’ re looking at how we can work with their supply chain to get youngsters involved. I also applaud the government’s commitment to apprentices.

Christine Townley, director, Construction Youth Trust

The Office of National Statistics says construction  output is 11% up on last year, the best growth figures since 1988, but the feeling on the ground is still one of trepidation. The government has tried to sweeten the blow of pulling capital spend on BSF and housing with a resurgence of council-led projects, but this will not fully bolster the confidence of my construction colleagues. In my local council, I’m especially keen to facilitate private-public sector partnerships utilising the region’s excellent educational resources.

Charles Meynell, Sustainable Construction Innovation Network (iNet) and a Conservative councillor in North West Leicestershire

The cuts are particularly regressive with respect to the challenges the government’s proposals for future carbon reduction targets. The main impact will be on green innovation and research, which will make it more challenging than ever to meet the objectives for the government’s low-carbon transition plan.

The huge cut to the education budget is likely to reduce university intake, which will put pressure on skills for the industry in the future.

Emma Nicholson FCIOB, chair of the CIOB’s working group on climate change

My fear is of an overall squeeze in the market. Companies like ours can hang on for a couple of years, but we need signs of a recovery soon and I don’t see one coming for the next two years. We do about 30% public sector, 30% commercial and the rest high-end domestic. I’m not convinced about the argument about private sector investment compensating for cuts in the public sector. We’re a private enterprise, and we’re dependent on income from the public sector. Private companies need incentives, like training grants – but CITB funding has been cut.

Bernard Keogh MCIOB, managing director, Arque Construction, Exeter

The impact is going to be horrendous.. With departments making serious reductions in overall spend, secondary functions, like building work for smaller contractors like us, are definitely going to suffer. The Department of Education will be looking to make cuts that allow it to  deliver education — not building and maintenance work.. But perhaps we’ll see an increase in work in the longer term, in five years, as the building stock deteriorates due to lack of investment.

Vance Babbage MCIOB, director, B&M Babbage

Feedback

Why the construction diploma is failing: an insider’s view

Stephen Barthorpe, group corporate responsibility manager, MITIE

I read your feature article on diploma doubts (CM, October, p20) with interest.

The statement made by Chris Simpson of Wates that BTEC courses are only available at FE colleges is incorrect — they can be taught in schools too. MITIE has seven Construction Skills Centres in secondary schools around the UK where 527 14-19-year-old students are studying BTEC certificate and diploma (or Scottish equivalent) courses. The schools either self-deliver or get FE college tutors to provide part or all of the tuition. MITIE also enhances the student’s learning with demonstrations from trades people and “World of Work” insight events by our employee volunteers.

Some of these seven schools also offered the new CBE Diploma when they were introduced in 2008 but their tutors have advised me that there is currently no interest at all from students because of the relative complexity of their structure and the high academic standards necessary, particularly in maths. The high drop-out rate you discussed in your feature therefore concurs with this situation.

I was involved as an employer representative during the consultation phase of the new CBE Diploma and argued that the existing provision worked well enough and didn’t need another set of qualifications for employers to have to
get their head around. It seemed to me that the government’s decision was already made and the new diplomas would be introduced regardless.

The same argument was lost with the industry-accepted and respected ONC/D and HNC/D but the government favoured the Foundation Degree, which has also struggled to gain industry acceptance. As a former university principal lecturer in construction management, I think the introduction of the Foundation Degree was heavily influenced by the previous government’s aim to get at least 50% of school leavers into higher education.

There is potential for the CBE Diploma, but it favours the more academic students who are perhaps less likely to be attracted to vocational qualifications anyway.

The success of MITIE’s Construction Skills Centres and the growth of our facilities management services, particularly for long-term PFI school contracts, has prompted us to initially open three FM Skills Centres in schools/academies around the UK by next April. We eagerly await the formal accreditation of the new Level 2 NVQ in Facilities Services proposed by Asset Skills to enable 16-18-year-old students to gain a vocational FM qualification which ,combined with appropriate work experience from MITIE, will give them an opportunity to get employment in the FM sector. When they are open, we would be happy to host a visit from CM.

A minority point of view 

Gerald Brown, Bowthorpe Road, Norwich

With reference to your September CPD segment covering diversity, could I venture to suggest that the biggest obstacle to increasing diversity in any industry is actually the ever increasing amount of legislation intended to further it?

Every time an additional “right” is given to one group over another, the less attractive that group becomes to an employer.

Why should an employer be required to subsidise the lifestyle choice of a woman who chooses to have a child, and then have to tailor “his” job to her working hour whims after the birth? The expense and problems can be avoided by not employing women of child-bearing age to start with.

As an employer is now responsible for “upset” caused to one of his employees by another, a sensible employer will aim to reduce the risk arising by looking to employ “industry standard” employees. For example, a reason to be taken to a tribunal on unfair dismissal is that the individual was selected for dismissal on race grounds. The employer has to prove he wasn’t rather than the plaintiff prove he was. So why not avoid handing out an extra stick for somebody to beat you with later by not employing that group to start with?

I believe such perversity in legislative effects is known as “the law of unintended consequences”.

The race and equality “industry” survives by continually attempting to convince us that we are institutionally racist and sexist. It receives much of its funding from the taxpayer and in these times of financial stringency I would suggest that the industry would be one of those least mourned if it suffered substantially in spending cutbacks.

Let’s not forget who we are

Michael Roffe MCIOB MCIAT MRICS, principal, Michael Roffe Associates

I am very concerned at the inference on the way forward in regards to education for future members, as described in “CIOB seeks course changes” (CM, October p8).

Surely the foundation of any building professional is to fully understand the complexities to achieving a successful construction process, which should encompass all the complex individual procedures, such as setting out?

What does the article mean by “more non-technical skills”? Are we to become professionals who can skim the surface of a problem, but have no understanding and/or knowledge on its root cause?

With the economy in such a poor condition, every business must utilise all of its recourses to whatever means to survive. This is a short-term requirement to keep business alive, but it is not a long-term objective in terms of development of the professional, learned society.

By its very name, the Chartered Institute of Building is just that. It is not a branch of head-hunters, climate change consultants, law enforcement consultants etc. It is a learned society dealing with the practicalities of constructing buildings and structures. 

If we lose track of this and need to employ separate consultants, for instance to set out a simple building, then we are losing the plot and deceiving the public on what we actually are. At the twilight of my career, I will be concentrating on the technical benefits that I can propose to my clients to achieve their requirements.

Contact us

Do you have an opinion on any of this month’s articles? Email: construction-manager@atompublishing.co.uk

Online opinion: Your reaction to the stories in last month’s CM

Building a presence in the social media space

Great article! I am writing a dissertation on the subject for a Construction Project Management degree. It is a new concept and I guess there isn’t going to be a lot of information out there, but that’s what motivates me.

Daniel Maddocks

Lord Young: we need clearer, simpler H&S regime in construction

Fundamental to any review should be the time attached to a RIDDOR accident. This has not changed for years and we now have the added burden of self-certification for sick leave, which undermines the accuracy of the RIDDOR process. Seven-day reporting would help to give more meaningful accident statistics.

David Jones

Insurer battles housebuilder over timber-frame fire

In the 1970s, residual values of timber-framed houses were lower. In some areas, timber-framed dwellings were unsaleable due to the condensation problems within the cavity construction. 

I used to be an agent for the import of high quality Nordic timber-framed houses. I would never own one.

Dr Keith G Skelton

Foster academy slated over design faults  

I am surprised that a Foster-designed building could turn out with so many deficiencies. My company has engaged Foster to do a proposal for a high-end condo in our capital city. I am keen to know any follow up action on this issue.

George Liew

Chris Blythe: ending boom and bust, yet again

Not entirely Chris — you can’t blame government for the banks selling on sub-prime mortgage debts until they realised there was no hope of them ever being repaid. Banking deregulation and the FSA, which didn’t understand how to control it, were the major flaws.

It was extremely clear that the banks were out to sell loans to the maximum and had no self control, otherwise this would have been reigned in before the crash ever could have happened.

Peter Lithgow

Quangos prepare for the worst

The paperwork inflicted on the building trade over the past 13 years is horrendous. I am thankful to be retired and not part of this “red tape” any more.

Eddie Monk

Bob McKittrick: coming clean on costs

Bob, I note with despair the facts as you describe them, however there are a number of points I would like to make. First, the Scottish Parliament building was surely the product of a classic undefined and incomplete design brief, while the death of the principal architect, Enric Miralles, half way through the project did not help matters.

And who was responsible for agreeing the method of procurement? This would never have happened under a PFI with a Non-Profit Distributing Organisation (NPDO) special purpose vehicle. There would have been little or no risk to the government, and the project would have been delivered much quicker.

James Doherty

Top five stories in October

One

Diploma doubts — our investigation into why only one in three candidates passed the new construction diploma.

Two

Foster academy slated over design faults — a web-only story from our weekly news round up, on a catalogue of problems at the Bexley Business Academy

Three

The lengths we went to — Victorian baths (pictured above) in north London restored for the local community in a complex refurbishment undertaken by Wates

Four

Insurer battles housebuilder over timber-frame fire — another web-only story, on how the fall-out from a 2008 fire in Hounslow could have wider implications

Five

CSR Part 1: where the axe fell — readers face up to the implications of cuts in public spending