Construction 2025, the new Industrial Strategy for Construction, has been welcomed as wide-ranging and a comprehensive attempt to tackle the issues faced by the industry in an integrated way.
But the industry was still waiting for a clear picture of exactly how the new 30-strong Construction Leadership Council will operate, and how the strategy will progress from the short-term Action Plan published this week to the longer-term goals outlined in the document.
Simon Rawlinson, head of research at EC Harris, commented: “The Latham and Egan reviews focused on one or two issues that needed fixing, but possibly ignored some of the wider challenges. This piece of work is quite good in that it recognises the basic challenges of a fragmented, under-capitalised industry that needs support.
“But it also has an aspirational element – around digital transformation, decarbonisation and building exports – so it’s got all the components it needed to have. It’s a vision statement – how we get there is for another day and the Construction Leadership Council.”
The joint industry and government strategy sets out ambitious but hazy visions for construction in 2025: by then it should be delivering buildings at 33% less than current prices in both the initial costs and whole life cost, with project delivery times from inception to completion cut by 50%.
In addition, there is to be a 50% reduction in greenhouse gas emissions linked to the built environment – which currently stand at around 40% of overall total emissions – and a 50% reduction in the trade gap between exports and imports for construction products and materials.
"The Latham and Egan reviews focused on one or two issues that needed fixing, but possibly ignored some of the wider challenges. This piece of work is quite good in that it recognises the basic challenges of a fragmented, under-capitalised industry that needs support."
Simon Rawlinson, head of research at EC Harris
But the document also contains a short-term action plan of manageable steps grouped under nine different themes: smart construction and digital design; low carbon and sustainable construction; global trade; the image of the industry; capability in the workforce; future work opportunities; client capability and procurement; strong and resilient supply chain; research and innovation.
Each theme has several “action points” that will be delivered by various industry bodies, including the BIM Task Group, the CBI Construction Council, the National Federation of Builders and CITB. Many of these action points refer to programmes or reports that are already underway.
The strategy document says these bodies will be “accountable for their implementation to the Council”, leading Graham Watts, chief executive of the Construction Industry Council, to light-heartedly suggest it would function as an inquisitorial “Star Chamber”.
He added: "Much of what is proposed is happening already, in relation to BIM or skills. There’s not much that involves starting anew. But that’s good – you could say the worst thing would have been if the startegy drove a coach and horses through things that we were implementing as a result of previous startegies. So it confirms that the way forward is growth through BIM, the green agenda, and tackling the balance of trade."
The new Leadership Council, which will meet three times a year and has no budget, does not have any action points of its own, although it is understood that its role in the future may include setting out intermediate targets to reach the 2025 aspirations.
Paul Bogle, policy manager of the National Federation of Builders, said: “The Industrial Strategy had to deliver a set of aspirations that are challenging, but they are all things people have been calling for in conversations so now everybody can coalesce around these goals.”
The NFB particularly welcomed the commitment to improve payment times and reduce the length of time projects take by 50%. Bogle said: “We want to make sure the entire supply chain is thriving, so we welcome the continued pressure to improve payment times.
“A 50% reduction in delivery times sounds challenging, but the supply chain is raring to go and wants to deliver. It’s hampered by a lack of finance – if it hasn’t been paid for work it’s already completed it’s then harder to bid for the next project. So shortening delivery times allows you to speed up cash flow through the industry and get a faster through-put of projects – it’s a means to an end as well as an end in itself.”
Short-term deliverables in the Action Plan include
- The extension of the government’s Enterprise Finance Guarantee scheme to a wider range of sub-contractors. A pilot run by B&Q’s owner Kingfisher extended up to £50,000 in trade credit to traders backed by a 75% guarantee from government.
- A new construction industry payment charter to be drawn up by the Institute of Credit Management (which also wrote the government-backed Prompt Payment Code)
- Work on making apprenticeships less dependent on market fluctuations, for example via shared apprenticeship schemes
- Committing to a resource efficiency voluntary agreement, to be drawn up by WRAP
- Updating the Pye Tait research on the number and scope of card schemes in the industry
- The NFB is to undertake a report on procurement and frameworks, to build on the Effectiveness of Frameworks Review, published March 2012.
- A study by the UKTI and Construction Products Association to identify measures to boost export growth
- The UKTI to explore appetite for a trade “grouping” of UK based contractors
