The author of last year’s construction review considers how things have changed since then and reveals what he thinks about the industry now
One year has passed since I published my review of the future of the construction industry. Modernise or Die was intended to ruffle feathers, get industry and government to sit up and listen, and to start an open and honest debate about the outlook of our industry.
My findings covered lots of old ground but also assessed the impact of new and worrying issues affecting the industry in the long term. My focus in the past year has been on general awareness building and influencing some of the “strategic initiators of change” that I referenced in my report. What happens in the period ahead, however, is crucially important for the continuation of momentum.
Big events have played out in the past year. We have had a litany of poor financial results from major supply-chain players. We have also seen a plethora of headlines about poor-quality construction and dissatisfied customers, from the woes of Bovis Homes to the Scottish schools programme debacle. Without doubt, though, the most sobering event of all has been the Grenfell Tower tragedy, which has far-reaching ramifications for how we deliver built assets.
I’m hopeful we are now entering a period of unprecedented change for construction, one that is long overdue. [But] we must accept that there will be winners and losers
While these events have different causes and effects, I would suggest they are linked manifestations of one overarching theme – the structural deterioration in the skills base and associated level of competency in our deeply fragmented built environment industry. This spans everything from clients, to professional disciplines, to site-based trades.
Although antiquated procurement practices, industry culture and some much broader regulatory failures are all implicated here, the core game-changer is the simple fact that our industry’s resiliency is under stress. We have fewer people with the right skills, in the right roles, being deployed in the right way. Therefore, I see reform of our traditional labour-intensive, highly wasteful and siloed delivery model as being at the heart of any modernisation strategy.
With more people retiring every year than joining our industry, and with the added uncertainty of Brexit playing out in the background, we must attack industry productivity and effectiveness in a way that we have failed to do in the past. This requires a carefully managed sequence of change, starting with focused, government-led policy interventions, and combined with industry pushing new ways of delivering and clients pulling by commissioning work in a more intelligent way. I remain resolute in my belief that clients and their advisers are key here, and must demand better if they are to guide the industry towards self-improvement.
Much has happened in emerging housing policy development over the past year that has increased recognition of the role of skills and construction modernisation. The housing white paper, combined with the disruptive intent of Homes England, and the rapid evolution of the mayor of London’s thinking about his own devolved housing strategy, have all created significant platforms for demand-led transformation.
Although antiquated procurement practices, industry culture and some much broader regulatory failures are all implicated here, the core game-changer is the simple fact that our industry’s resiliency is under stress
In institutional terms, my call for fundamental reform of CITB was met with a quick announcement last year of the ITB review, due to be published imminently. With the industry having also heeded the call to conditionally retain CITB through its latest consensus process, it now has the opportunity to shape the agenda around current and future skills. I’m certain this can be assisted by a set of strategic ITB review recommendations, led by a forward-looking leadership at CITB who want to work with the industry to get this right.
All of this can inform the emerging sector deal being developed by the Construction Leadership Council (CLC), which gives us a chance to really accelerate industry modernisation. I support the three central themes developed by CLC: digital, manufacturing and performance. If I were to emphasise one of these, it would be manufacturing. If we can drive change on this axis, then digital becomes the enabler and performance the outcome. There is so much latent potential in moving our basic approach to a “construction as manufacturing” mindset.
This in turn links inextricably to two of the CLC’s other priority areas – “procuring for better value” and “skills for the future”. The mass roll-out of better integrated procurement models, the future-proofing of our skills base and the related improvement in the industry’s public-facing image are going to be vital if we are to succeed.
The sector deal narrative and the details of the Industrial Strategy Challenge Fund application are still being developed by the CLC, but I am encouraged by what I have seen so far. There also seems to be a willingness from the CLC to address my concern about leading the industry and its reform in a more integrated way. Better-embedded future links to Build UK, CIC, progressive SME bodies, and of course CITB, will enable it to mobilise a critical mass of both key enablers and business leadership.
I’m hopeful we are now entering a period of unprecedented change for construction, one that is long overdue. It seems brutal to say this, but I’m afraid not all existing businesses, organisations, or indeed those individuals who want to protect the status quo, will navigate that journey successfully. If we are to move to a different place, we must accept that there will be winners and losers. That is what the Modernise or Die challenge is all about.