A turn for the worse

If they ever manage to evict the Inland Revenue, it looks as though the Law Lords are going to have to slum it in Somerset House. The reason, according to The Times on 2 January, is because Tony Blair dare not commission a purpose-built supreme court building before the next election. And the reason he dare not is that everyone assumes that such a project would end up as yet another scandal, like the Scottish parliament – overdesigned, overregulated and overpriced.

After 10 years of the pain and pleasure of government-sponsored reform and modernisation, the construction industry is back where Sir Michael Latham started in the pit of the early 1990s recession. We are still seen as a fragmented, squabbling, macho industry with a continuing (though now unfair) reputation for unreliability, adversarialism and inefficiency. High-profile client cock-ups such as the Scottish parliament don't help.

An exaggerated assessment of the current state of the industry? Perhaps it is for a minority of favoured or forward-thinking contractors, designers, specialists, subcontractors and their clients. But most of the real construction industry – those that actually build stuff – are thanklessly slogging their guts out for external supervisors and regulators just to break even at the end of the year.

Real construction is still only averaging a 1% net profit on turnover, with the best performers proclaiming a wicked 3%. The struggle to break even is the harsh reality of day-to-day construction in 2004, as it was in 1991.

The first substantive point in Sir John Egan's 1998 Rethinking Construction report (chapter one, paragraph 4.1) was that margins were too low for the industry to sustain healthy development, and had to be improved. The report's intention was clear: that by creating an integrated project process with both supply-chain and client partnering, the quality of service and product to the client would improve and the real construction industry would make a sustainable profit, steadily increasing it 10% year on year.

It was that promise that brought a naive idealist like myself into the Movement for Innovation to promote the integration of the industry through partnering, better supply-chain management and all the other sexy initiatives that flowed from our work.

Partnering supervisors have become unpaid government inspectors enforcing the near fascist regulation that is smothering us all

Don't get me wrong, I still believe passionately that the total integration of the construction process and industry is the only way forward. We cannot continue any longer as a ragbag of competing factions where design, cost control and direct access to the client are kept away from the real constructors, still the only people taking the financial responsibility for the project's success.

There simply isn't room in our highly competitive industry for the growing numbers of risk-adverse supervisors creaming margin from our work and our products. It is the main reason that real construction is still unprofitable.

But the supervisors are a powerful lobby, now joined by the major firms as prime and framework contractors. They have persuaded the Rethinking Construction quangos to limit partnering and integration to the client–supervisor level. In return, the partnering supervisors have become unpaid government inspectors enforcing the near fascist registration and regulation that is smothering us all and driving up costs.

It is now open season for partnering supervisors to exploit the traditional adversarial regime and so keep real constructors in their place – trading at cost.