The Olympic park can be completed on time and without conflict between the sectors – but the strategies to ensure good relations must be sorted now.
One of the most important projects for the whole country, and also for the construction industry, is the Olympic Park. I have the greatest admiration for the team at the Olympic Delivery Authority (ODA), and especially for Howard Shiplee, the director of construction and a fellow member of Building’s editorial advisory board, whom I have met many times.
I am speaking as the independent chairman of the Major Projects Agreement (MPA) forum and the Joint Industry Board for the Electrical Contracting Industry, both of which involve employers and trade unions.
The MPA forum has been overseeing the electrical, mechanical and plumbing work at Heathrow Terminal 5. This has been the only MPA project so far, although it is hoped that others will follow. T5 is a good example of an exemplary execution of the vital M&E work, with no time lost through industrial disputes. The parties at project-level deserve to be congratulated on this record.
Where difficulties have arisen under the MPA – and of course there have been some – they have been sorted out either by conciliation at an early stage or, where necessary, through procedure under the terms of the agreement.
Terminal 5 has not been anything like the problematic Jubilee Line extension. Not that the tube line was the only culprit and other major M&E schemes in the nineties and early 21st century where industrial relations were problematic also spring to mind.
None of that must happen on the Olympic site. It must be finished on time, and, hopefully, within the agreed budget. With major contractors involved, and expert project management, I am sure the time issue will be resolved satisfactorily.
The related problem will be how to ensure wages are set at the right level to attract and retain skilled employees and to provide cost certainty in terms of the agreed budget, especially as there will be other major schemes involving the same trades going on in London over that period.
The industrial relations strategy should avoid the risk of ‘leapfrog’ claims which occur when one sector feels disadvantaged by payments in another
Achieving these objectives will require two main approaches. The first will be integrated teams, involving the ODA and CLM, its delivery partner, the main contractors, the designers and particularly the front-line specialist contractors who will carry out the work on site.
Such best practice is now strongly recommended by the National Audit Office in several major reports. It is also a vital part of the 2012 construction commitments devised by Peter Rogers’ committee and endorsed by the ODA, the Strategic Forum for Construction and the Government. Hopefully, best practice will be followed throughout the supply chain, on a partnering basis.
The second requirement is an effective industrial relations strategy, which addresses the needs of each sector and the crucial interfaces between each sector, covering the various projects, which are all within a few hundred yards of each other. The ODA has reached a useful memorandum of agreement with the trade unions, and that is to be welcomed.
As a personal comment, I would like to go further, by making two suggestions. The first is that the interfaces between a total of four key sectors (electrical, heating and ventilating, plumbing and thermal insulation) can be successfully addressed by adopting the MPA, suitably modified for application to the Olympics.
The second suggestion is that the MPA should form part of an overall industrial relations strategy which effectively addresses the interfaces between sectors and avoids the risk of “leapfrog” claims which occur when one sector feels disadvantaged by the payments and practices in another.
If only the normal construction wage agreements for the various trades are followed, I see problems ahead. The practical reality is that nobody on the Olympic sites will be receiving the nationally agreed figure for their trade – they will all be getting several pounds an hour more.
If there is an effective industrial relations strategy, which might define rates of pay until the end of the project (as applies under the MPA at Terminal 5) it can be properly delivered, with good productivity. I hope this will be possible. But there is not much time left, and the employers and the unions need to be talking to one another now.