There is a powerful appetite for innovation in construction – government needs to help transform the industry with a sector deal
The construction sector is hungry for change. From the supply chain on wafer-thin margins to clients who continue to pay more than they should for their assets, the model is unsustainable.
Historically, we have been too slow to reform, a little sluggish in embracing data and technology, and sometimes reluctant to change the way we work with the supply chain. There’s recognition of this across the profession and the effects are being felt in inconsistent performance and low productivity.
But momentum is building for change, with cross-industry collaboration is starting to make a difference.
The response has been exceptional – 121 sites have been proposed and 65 were longlisted
The latest sign of our collective eagerness to modernise came from Heathrow Airport last week. As part of its plans for runway expansion, Heathrow invited expressions of interest from sites for four new logistics hubs – off-site manufacturing centres, powered by SMEs and located in different regions across the country.
The response has been exceptional – 121 sites have been proposed and 65 were longlisted by Heathrow last week
Not only was the number of responses impressive, so too were their breadth and quality. The sites range across every region of the UK, from Tees Valley to Avonmouth, and from the South-east to County Antrim. Proposals came from public and private bodies – landowners, local authorities, contractors and others – and the calibre of submissions was encouraging
In some ways, the popularity of the initiative is not surprising given the potential inward investment from Heathrow into UK regions. But all submissions were assessed against clear criteria including transport connectivity, local labour skills and supply chain capability.
Overall, the response is a powerful demonstration of the appetite for innovation in construction across the UK. From clients who have co-ordinated submissions in the hope that they could use this as an opportunity to agitate for change, to members of the supply chain desperate to prove there is another way to be engaged or who see this as an entry, a chance to disrupt.
Through the logistics hubs programme, there are opportunities to make progress in a range of priority areas for the sector: investing in manufacturing technology and pioneering component-led design; nurturing vital new skills in modern methods of construction; developing long-term, collaborative relationships deeper into the supply chain, including at SME level where innovation happens most often; and delivering economic benefits across the UK.
Sustainability is also integral, with the logistics hubs designed to reduce transport and environmental impacts and to create diversity and strength in connected, regional supply chains.
The potential of the UK’s large infrastructure programmes to act as a catalyst for change is significant. It goes beyond Heathrow – the UK has a £500bn infrastructure pipeline and, if we invest and collaborate in the right way and deliver at the world-class level we are capable of, there is potential to achieve real transformation.
An important piece of this jigsaw is the prospective construction sector deal, part of the government’s emerging industrial strategy
An important piece of this jigsaw is the prospective construction sector deal, part of the government’s emerging industrial strategy, along with the need for political leaders to accelerate these mega-projects through Whitehall’s corridors and on to site. If we do not develop these projects in parallel – or at least in continuity – there is a real danger that the opportunity for change could be lost because of fragmentation and barriers to the transfer of knowledge, learning and skills.
Commitment, policy support and funding are required from government to give investors, clients and the supply chain the confidence they need to draw up their own investment plans. R&D investment is urgently required, but has for too long been inhibited by the low-margin and stop-start environment in which the industry operates. There are positives incentives from government around funding for R&D, but at present we must compete against other sectors for our share.
The excellent work of the Construction Leadership Council has paved the way for a sector deal that could unlock investment and ensure co-ordinated and collaborative delivery across the sector.
The potential gains are significant. Not only could we develop our manufacturing capabilities and capacity, but in time we could open opportunities for export and strengthen our international trade. In a post-Brexit world, this is a proposition worth investing in.
Heathrow is showing genuine industry leadership and highlighting what could be achieved across the sector and across the UK, but it cannot transform construction alone. We hope that the chancellor will confirm that the government shares this ambition by committing to a sector deal, if not in this month’s Budget, then certainly in the Industrial Strategy White Paper.
David Whysall is head of infrastructure south and UK commercial services at Turner & Townsend, and co-chair of Constructing Excellence