After the relative largesse of the last decade, Paul Morrell speaks for a more rigorous approach for the next generation of projects. Elaine Knutt reports. Photographs by Peter Guenzel.
More for less. It’s the new mantra spreading across the construction industry. It’s the topic of every conference programme, the holy grail of every client, and the proud boast of chief executives in recent corporate results. It’s the focus of the government-backed National Improvement and Efficiency Partnership for Construction and the Built Environment (see page 12.) And it’s likely to echo through a series of forthcoming Whitehall reviews: the Sebastian James review of the school building programme, the Infrastructure UK review of UK civils projects, Sir Roy McNulty’s review of the rail industry…
So it’s not surprising that Paul Morrell, the government’s chief construction adviser, is very much signed up to “more for less”. “I’ve got two strong agendas — one is getting money out [of the industry], and one is getting carbon out,” is his summary of his role at the heart of the Department for Business, Innovation and Skills (BIS).
Carbon has been the main focus of his work so far, and the subject of his forthcoming report for the Low Carbon Construction Innovation and Growth Team. But in the months to come, it’s likely that squeezing old, hard cash out of public sector frameworks, PFI contracts and other construction spending programmes will take equal billing.
“In the public sector, the price of extra cost is that we do less,” Morrell states. As for the late, lamented BSF programme, he’s in little doubt the public purse was short-changed. “The reality is that if we had paid for all of our schools, the amount that we had paid for those that occurred in the lowest quartile of cost, we’d save an awful lot of money. So if you look at our lowest cost schools, they’re down at the right level, but there’s a lot that we’re paying loads more than that. Maybe we built 10 fantastic schools, but it would be better to build 13 or 14 good schools.”
So does that mean we should be squeezing an extra 30-40% of output from current spending? Well, yes and no. “For some government departments it will be 0% because they’re doing jolly well, and for others it will be 30% because they’re paying that much more than the benchmark,” he says, singling out the Highways Agency and Procure 21 as efficient procurers, and some NHS contracts as too costly. “But it seems clear that in general the public sector pays more for it’s construction than the private sector, and a lot of that is layers of administration and duplication.”
Diagnosing the waste and inefficiency he hopes to challenge, Morrell takes a chronological overview of typical project. Unnecessary costs first arise in lengthy pre-qualification procedures, but really get going in the design phase (which he says many contractors are fail to manage properly). Costs then mount as specifiers select from a bewildering array of products. “For public buildings paid for out of tax, I don’t think there’s anyone saying ‘ah, but our loos need to be different from everyone else’s’,” he says pithily. And as a final coup de grace, the final account will also include the knock-on costs of the industry’s late payment culture.
Of course, you don’t have to be a construction historian to know that all this sounds horribly familiar. The 1998 Egan Review described exactly this kind of endemic inefficiency, then set tough year-on-year targets for reducing costs, accidents and defects, and increasing predictability, productivity and profitability. On the long journey of self-improvement that followed — which led to the Movement For Innovation, Constructing Excellence — the industry made huge strides in many of these areas.
But the fact that chronic inefficiencies still exist is, in large part, a symptom of the wider problem Morrell’s role and appointment are designed to address: the misalignment between public sector demand and supply side response.
In other words, the construction industry knows that standardisation produces cheaper buildings, but government departments continue to commission one-off schools and hospitals; the industry signs up wholeheartedly to partnering frameworks, then public sector clients open up the deal to an unworkably large number of firms and select via mini-competitions ; the government wants to off-load risk in PFI-style arrangements, so the private sector obliges — at a price.
Intelligent questions
So Morrell sees “more for less” as a question of straddling the faultline between government and industry, demand and supply. “You can’t separate the two [sides]. People won’t innovate or invest much to respond to questions that they only get asked once. If frameworks are the right thing, if offsite fabrication is the right thing, if better use of IT was the right thing, all of that would happen in response to a market that asked for a repetitive and long-running programme,” he says. “You have to ask an intelligent question to get an intelligent answer.”
Blowing the winds of change down Whitehall’s corridors clearly won’t be easy, but maybe some draughts will soon be felt. One target is streamlining public sector pre-qualification, so that contractors no longer have to submit short (and endlessly re-written) novels. Referring to the forthcoming PAS 91 standard for prequalification procedures, Morrell hopes to use persuasion rather than a Whitehall dictat: “I don’t think we can do anything much more powerful than say [to public sector procurement teams] ‘use this form’. It’s very hard to mandate doing anything, but you want to convince people that if they did that, they’d end up paying less.”
Outlawing late payment on public projects could be another early win. “Government pays 90% of its bills within 10 days, and yet that money creeps down through the supply chain. It’s denying lower levels of the supply chain cash, particularly when access to credit is also difficult,” Morrell points out. “First, and almost immediately, we can make an obligation to pass the money down through the supply chain at speed. If that doesn’t work, we can look at project bank accounts.”
Morrell also wants to promote a cost-saving idea that has spent a decade filed under “tomorrow” – Building Information Modelling (BIM). While it was once assumed that market forces would produce an industry-standard BIM platform that everyone would eventually scramble onto, Morrell now sees a case for government intervention.
“I’ve asked a question here [at BIS] about moving towards a stage when all government projects will be implemented on BIM,” he says. “You make an incremental plan – a road map that says ‘as of such and such a year, people will need to operate BIM’.” So you hope the market will start to respond to these things, that’s absolutely the right way to do it.”
Morrell, a former chair of the Commission for Architecture and the Built Environment, also speaks for a style of civic architecture that could be termed “New Realism”, or design excellence without the costly over-sailing cantilevers and “organically” curved facades. To ensure that we end up with “New Realism” rather than “New Rubbish”, Morrell says public clients first need to absorb the maxim that thoughtful, sustainable design really does add value — in all its forms.
Drawing the line
And then comes the tricky part. “[Procurement teams] have to decide where that line is drawn, the point above which you shouldn’t carry on spending. You need to know the standards — so that if you fall below them the building isn’t good enough, or isn’t sustainable, or doesn’t sit well with the civic context, or whatever. Then [as a client] you should know, or the market knows, what you should be able to buy that standard for. It’s a case of how you keep that design within the family of values you set so you don’t get something that’s over-designed.”
That’s Morrell’s promise on the demand side, but in return he wants the supply side to make some efficiency changes of its own. First, he lays the responsibility for delivering New Realist designs at the door of contractors. “Contractors are the natural integrators of this industry, but they need to understand that value is created on drawing boards. Sometimes, unfortunately, it’s destroyed in the same place, through inefficiency in releasing designs, or over-design. So the skill is to manage the design team, to release that value then stop the team destroying it.”
He also argues that it’s time the industry really delivered the integrated offer — from design to construction to operation, all tied together by whole-life costing — that is so far more rhetoric than reality. “Government needs to be asking the question that this is the answer to. Then the bits of the industry that will succeed are those that organise themselves around managing for good design, good construction and good FM.”
But the first question the government will be asking relates to the school building programme. Here, Morrell suggests that the Department for Education should commission schools on a simplified bid model, where a complete supply chain would act as a single group. “The way to integrate supply chains would be to say: show us the best school you can design and build, show us the price and the design at the same time, and we will tell you the boundaries within which we’ll measure quality and cost. As a client, you put your hand into the process, and say ‘please go about answering my question in this way’.”
Morrell has been in the post for nine months, and has made a wholly positive impression. “He’s absolutely the right man for the job,” says Gordon Masterton, the new chairman of the Construction Industry Council. “He’s got good industry contacts, good connections with the politicians, and he understands construction — all the foibles, the practicalities, and the pressures,” says Scott Brownrigg director and RIBA councillor Peter Caplehorn. “He did a presentation to us at the RIBA on Value for Money, and it was so astute, it identified lots of things we were all worrying about.”
But to what extent can one man — plus a small support team — make a difference? Worryingly, his input into government policy is not a given. At the time of this interview in late July, Morrell hadn’t been invited to submit his thoughts to the Sebastian James review. “I await the call,” he says drily. And indeed, with government procurement taking in most departments plus arm’s length agencies such as Partnerships for Schools, Procure 21, and the Homes and Communities Agency, it’s hard to imagine that even Morrell’s forceful personality can shift policy across the board.
Political player
But when it comes to implementing the “more for less” agenda, perhaps there’s an interesting parallel with Morrell’s ongoing work on creating a low-carbon industry. Here, he’s won admiration for playing an astute political game. On being appointed, his main task was to produce report for the BIS Innovation and Growth Team on how construction could re-engineer itself for a low-carbon future. But he was aware that it would take a year to produce a robust piece of work — a period in which there was a high chance of a change of government.
Morrell therefore chose to publish the working groups’ “emerging findings” in April. “There wasn’t much point in a long list of recommendations so there was only one: to make a plan,” he says. So the report contained enough detail to establish the direction of travel, but not enough to restrict Morrell’s freedom of movement in the final draft, due in November. In doing so, he also made it easier for the new government to endorse the project. “Mark Prisk, on his second day in office, came to the IGT steering group and re-affirmed that he’d like us to carry on and finish, to our original brief,” he says.
It’s that kind of political sure-footedness that will be an important asset to Morrell as he attempts to bring the demand and supply sides together. Clearly, it’s a huge task, especially when both sides are bruised and demoralised by the disappearance of jobs and projects. Essentially, “more for less” needs to become a positive rally cry for new ideas and innovation, rather than a negative threat. With Morrell as a highly-respected integrator and figurehead, there’s a good chance it can be.
