Setting out a new deal to transform UK construction

As he prepares to host a new Construction Leadership Council Industry Leaders Forum tomorrow (11 July), Andrew Wolstenholme, Crossrail chief executive and co-chairman of the joint industry-government body, sets out his vision to unite and mobilise the vast construction sector behind a new deal to boost innovation, drive productivity and shift focus towards through life performance. Interview by Antony Oliver

You are hosting an industry Leaders’ Forum to discuss a new strategy and potential sector deal with government to transform UK construction on 11 July. What is the ambition?

When I took over chairmanship of the Construction Leadership Council (CLC), I was looking for the model for how these councils work best. When you look at automotive or aerospace, the common links is they work as an industry right at the top level.

As such, they tend to be successful at getting match funding through government for innovation programmes – if you are automotive today the focus is on batteries and driverless technology, in aerospace you are looking at wings and engines.

There are three common strands that we are trying to link together at a similar top level across construction.

The first is digital – how do you apply digital technologies to create better, more certain outcomes in the early phase of a programme? The second is manufacturing – looking at how you use those outcomes to vastly improve the productivity in the delivery phase. The third is through life performance and how you leave that asset with intelligence to make sure that you optimise performance over the lifecycle.

Whether you are building a house, a school, a hospital or the sort of infrastructure we see on Crossrail, you can apply these three elements as common to all parts of the programme.

What will be discussed at the Leaders Forum? What do you need the industry to do to help adopt this new approach?

We want engagement for the industry. We tested this out at the last Leaders’ Forum in November and were told that we had the right agenda so we are now moving to the next phase. The job of the CLC is to simplify the business case and make it compelling to both government and industry and we are confident there will be a high degree of take-up and cooperation for this next phase.

Organisations will be asked to sign up to one of the CLC’s workstreams on innovation, technology, skills or procurement. These will form the core of the strategy that we will be putting together later in the year, ahead of a new sector deal with government.

We are holding this event in July at the Manufacturing Technology Centre (MTC) in Coventry, which is run by Innovate UK’s High Value Manufacturing Catapult and the industry. This will provide really good examples of how innovation can be turned into real business profit and demonstrate how other sectors have invested their own money to reap huge benefits.

I expect that it will help construction businesses to look at their own research programmes in a different way and learn how, by partnering with other organisations, they can get their investment match funded.

So what is the sector deal and how much investment cash is available?

The High Value Manufacturing Catapult demonstrates how this kind of deal can work well. Working with sectors such as automotive and aerospace, it has helped to develop, for example, a programme of new technology centres, such as the MTC, to drive research and innovation. Now, when the industry brings forward new research programmes, they are able to help provide match funding to boost the output.

But this isn’t one way, it isn’t just about government putting up money. It is a partnership with the industry. If you look at, say, the top 20 contracting organisations working in the UK, there is somewhere between £100m and £200m sitting on their balance sheets for research and development. If we can bring the sector together to partner and then get that match funded, we can begin to multiply the amount of money that goes into this area.

How can this new deal help to boost productivity across the UK’s infrastructure supply chain?

The very strong wins for the UK are building more houses, better journeys, cheaper energy, and more capacity in transport systems. The construction sector is so important in achieving this. It represents about 8% of GDP, is seven times larger than automotive and represents 10% of the UK workforce.

I think that government now realises that, with a £500bn pipeline of work and the aspiration to build 250,000 houses a year, there is a huge opportunity for this sector to industrialise itself to improve productivity.

We need to show that the industry is organised and worth investing in, and this is where the sector deal comes in. We are working with the Department for Business, Energy and Industrial Strategy (BEIS) and other government spending departments to understand how we can bring together this industry change programme. How can we bring the spending departments, the industry stakeholders and the supply chain together around this common theme of digital, manufacturing and through life performance?

We are working on the business case for this and with a high-level briefing to the industry on 11 July: we hope that this business case will be compelling and that large parts of the sector will support us. We can then develop a sector deal to put to BEIS in the autumn of this year.

What is at the heart of the sector deal with government and what do you expect it to achieve?

It starts with smarter procurement. Whether you are a public or private sector client, procuring a house or a railway, you need to understand the value of asking different questions at the procurement stage.

On Crossrail, for example, we asked suppliers to employ one apprentice for each £3m worth of work procured. If other infrastructure clients could adopt a similar approach – perhaps, say, to ask for a percentage of offsite manufacture – it would enable the industry to develop new methodologies.

The second element is skills. We need a new skills model for the sector and the Construction Industry Training Board (CITB) is already looking at what the industry is prepared to invest in.

The third thing is that we need is an industry-level innovation programme and that is a very exciting part of this process. We have organisations like the MTC joining up with the Cambridge University Centre for Smart Infrastructure and Construction and Digital Built Britain to help develop digitalisation, smart manufacturing and through life performance innovation at an industry level and provide new solutions to the wider supply chain.

Driving productivity is key for the UK’s economic transformation. With Crossrail now 85% complete what can be learnt?

There are a number of examples where Crossrail is leading the model of future productivity. For example, the tunnel boring machine has now become a tunnel factory that replaces clay with precast segments. Sprayed concrete lining is now almost entirely applied robotically and you can see the aspiration we have to pull manufacturing into the core process.

The whole site is very factory-like. It is clean and many of the old trades have gone as new technologies and techniques replace traditional activities. Even blockwork wall construction isn’t the same as it used to be.

We have demonstrated that increasing the number of man hours spent working offsite is critical to improving productivity and quality. By doing this we have also started to change the skilled resources needed on site.

For example, the platforms at Tottenham Court Road station were traditionally built. However, when Lang O’Rourke built the same platforms at Liverpool Street, they doubled the productivity and halved the number of people on site by prefabricating.

But the enabler is embracing digital design as that unlocks the ability to go from a traditional build into more of a manufactured approach.

The Crossrail Innovat18 programme has been central to bringing in new ideas and innovation to the project. How has this transformed the project?

In 2011 when I arrived I realised that it was highly unlikely that we were going to successfully complete a project on this scale without allowing people to think differently and to bring new ideas into play.

The Innovat18 programme has been phenomenally successful and has been a leadership and culture programme as much as anything else.

But the programme was not just about producing some new widgets. It was designed to encourage, recognise and reward those who brought new ideas, shared best practice and brought their intellectual property to bear on this site.

We now have a database of 1,000 different innovations – probably 120 of which we personally invested in and match funded. It is a model that the automotive and aerospace sectors are known and respected for but that this sector hasn’t really brought to bear before.

And unlike other programmes we expect to hand over the ideas to the next big infrastructure project by landing the Innovat18 programme into a new industry platform called I3P.

What is the I3P platform and who runs it?

I3P is part of the Innovate UK-backed Knowledge Transfer Network (KTN) and is hosted by the Tideway project. It has two goals – first to encourage the supply chain to pass on best practice and innovation at a tactical level and second, to look at innovation from a strategic level across the whole industry, focusing on one or two key issues as a sector rather than individual companies.

Following the recent public sector mandate to embrace BIM Level 2, do you expect similar rules will drive this new strategy?

It may be possible for public sector clients to specify, say, the percentage of an infrastructure programme that needs to be manufactured off site. I think that would force the sector to congregate around this idea an innovate for themselves.

But, in reality, organisations will have to decide for themselves as to whether or not they are going to join this change programme as represented by the sector deal. It is not mandated that you will succeed by getting involved but all the requisites are being put in place.

What skills do you think will be needed to deliver a smarter built environment and a whole life approach to investment?

The skills you need for to manufacture and assemble are subtly different from those in the traditional building trades. Apprenticeships should be organised with this in mind. There will typically be fewer people on site and those that are there will have less traditional and more manufacturing and assembly skills.

Skills sit absolutely at the heart of everything that we do. We have to work out with the industry and with the CITB exactly what skills we need. If you can move the model into manufacturing then more hours will be spent off site in manufacturing centres around the UK.

If you then move into the maintenance side of the process these building is going to be a lot more sophisticated. I hope that in the next two to five years we will be able to attract the sort of people that currently go to work with Google and Rolls Royce because the sector has transformed.

There is work to do. At the moment, the sector is paying one levy towards CITB and another towards the apprenticeship scheme. We have to find a model that works for this sector and turn it into an investment opportunity.

In what ways do you think the construction industry will have to change?

It is about becoming more factory like and there are plenty of examples of where that is happening. We are trying to join the dots and create a new norm – to support the organisations that are already on that journey and by helping clients to consistently ask the right questions through their procurement.

Also, if you ask individual consultants of contractors today whether they do BIM they will all say yes. But if the client asks if your asset is handed over as a piece of smart infrastructure – an intelligent asset – then the answer is probably no. So clearly there is a long way to go. My view is that we will only crack this strategic issue by tackling it at an industry level.

The most important outcome for asset owners is over the lifecycle of an asset and so we must ask how, as well as improving the performance and efficiency during construction, can we optimise the performance over that lifecycle.

What does the industry have to do to embrace, support and benefit the new sector deal and the CLC?

Carry on what a lot of the leading organisations are doing already. We are simply trying to bind that work together with a common agenda. We won’t be successful in bringing everyone along but we can appeal to the public-sector spending departments and to the majority of the stakeholders that form the delivery power. I want them to understand the proposition we are putting together and to join in and support it.

It boils down to three things: better, more certain outcomes through the application of digital technologies; improved productivity through a more manufacturing type approach; and developing infrastructure that is much more optimised through life in its performance.

That is the simple agenda that this industry should align behind and over time it will make a great deal of difference.