Are we approaching ‘peak new-build’ in the construction industry?

I suspect I am not alone in being amazed by how quickly both societal and political awareness of climate change has accelerated, even in the past few months. As we emerge from the pandemic, the phrase “build back better” has perhaps been over-used and some critics will challenge that it has not even been properly defined by those that use it despite this strapline prefacing the formal Plan For Growth policy document published by the government back in March.

What is clear from this is that at the heart of building back better is an inter-connected agenda of net zero carbon, innovation and skills. Although there has already been much discourse from a property and construction industry perspective on the need to meet new operational carbon targets and also to address the looming retrofit challenge of existing building stock, perhaps less has been said of the longer-term implications of embodied carbon reduction, construction process emissions assessment and optimisation as part of the new construction and development appraisal process.

When a new capital project is proposed that involves existing buildings on a site, there is invariably some form of a discussion about refurbishment and conversion not just new build. However, the reality is that that comparative assessment has often been window dressing and is over-ridden by a default assumption that the exact requirements of a client brief are best achieved by complete demolition of existing buildings and a brand new bespoke solution being re-provided.

The major exceptions have tended to be driven by planning or other statutory compliance, mostly linked to heritage issues such as building listing or being in a conservation area, or the niche expertise and market positioning of certain developers who are known for repurposing buildings.

Even more radical is the question of whether certain new infrastructure and built environment assets are needed at all

What is clearly now on the horizon is the growing need for a much more fundamental review of whether existing buildings or site features can be retained or remodelled and what the best strategy is for minimising physical interventions relative to any given client brief. Even more radical is the question of whether certain new infrastructure and built environment assets are needed at all.

This is particularly pertinent to the aviation, road and even rail infrastructure networks as patterns of working change and a push for low carbon starts to seriously impact travel modes.

This might all sound a bit melodramatic, but I suspect that it will require a fundamental change in mindset and more importantly a significant pivot in technical skills sets from all members of the design and construction team. The idea of conserving buildings and assets – or making better use of them driven by embodied carbon rather than their heritage value – is a big shift which feels a distant requirement. But with ESG-led investment patterns changing and government policy and procurement increasingly pointing to carbon as a value assessment criteria, this is going to accelerate the need to be on top of the technical, commercial and delivery challenges of making more complex decisions on a cost benefit ratio basis.

Some of this is in reality going to promote the basics of what we should be doing anyway – reducing waste, needless effort and expenditure when other solutions exist.

I remember many years ago the structural engineer Albert Taylor, of AKT II, telling me the story of how, after digging around in Birmingham city council’s archives, he unearthed the as-built details for the original New Street Station design and worked out that a large element of proposed new work on the station redevelopment could be avoided through re-use of existing structural capacity. That strategy and analytical assessment is increasingly going to be an everyday part of our projects, rather than perhaps too easily defaulting to a hefty demolition package and starting again from scratch.

Retaining existing work usually brings risks and complexity, and we are all going to have to get better used to assessing those properly and optimising solutions. Relative carbon performance needs to be assessed on a balanced scorecard alongside capital costs, schedule, health and safety risks, community impacts, delivery predictability and other key criteria.

This in reality is going to make our lives harder as consultants and contractors, and clients are going to have to recognise the trade-offs that need to be made between more investable and resource-efficient projects and the greater technical complexities, delivery risks and sometimes functional compromises implicit in making existing assets work harder.

The government clearly has a role to play here too with some high-profile campaigns calling for the slightly perverse VAT rules to be modified to better incentivise the choice to retain or retrofit rather than demolish and start again. Conversely, homebuilding planning liberalisation via Permitted Development conversions and vertical extensions which one would see as an incentive for retrofit and conversion should not be allowed to become an excuse for poor quality homes built “on the cheap” by less scrupulous developers.

The profile of the work being commissioned will change, with a greater proportion of conversion and refurbishment relative to new-build

What does all of this mean for the construction workload? At the end of the day, construction will remain at the heart of economic growth, delivering the extra homes, infrastructure and commercial assets this country needs. What I’m sure of, though, is the profile of the work being commissioned will change with a greater proportion of conversion and refurbishment relative to new-build.

The demolition sector has been preparing for this for many years and is now becoming an expert in recycling and clean, resource-efficient processes. This is going to now spread through the rest of the design and construction supply chain.

It will also mean that the growing move towards MMC will have to have many more solutions developed that can work in existing buildings and structures. This will just add to the significant advancement of “hybrid” MMC, where building components, sub-assemblies or whole elements of pre-manufacturing sit alongside either existing or new traditionally built structure.

This also clearly plays directly to the huge housing decarbonisation retrofit challenge we have. It will create opportunities for innovation in materials, logistics, site-based technologies and related process assurance.

On the latter point, in a post-Grenfell environment, we will need to make sure that building retention can lead to safe, technically assured outcomes that can be warranted and insured in the same way as new-build through interfacing both new and existing works into one holistic building system.

Coming back to the key point, this is all about mindset, behaviour and ultimately industry skills. There have been numerous recent reports talking about “green skills”. Most people immediately think this is about designing and building for higher energy efficiency or a move to green infrastructure.

Perhaps the more difficult element to achieve, though, will be the insidious impact on mainstream construction’s resource efficiency and embodied carbon profile and not just starting a new project from a blank sheet of paper any more.

Mark Farmer is CEO of Cast Consultancy, MHCLG champion for MMC in homebuilding and a member of CLC senior advisors group