UK building firms have some work to do before becoming the strongest international competitors
This year has the makings of a great British summer of achievement on the sports field: the first men’s singles Wimbledon champion for 77 years, the historic British Lions victory on Australian soil, and Chris Froome’s powerful ride to grab the yellow jersey in the Tour de France. (Though let’s not take anything for granted with the Ashes, eh?) Coming on the back of last year’s Olympics medal haul, there have been serious column inches devoted to whether our recent success denotes Britain returning once more to become a nation of winners, after two or three decades of underachievement. A nation that may have finally got over the image of itself as a once-great country locked into inexorable post-colonial decline.
Certainly the current government is keen to replicate this sporting success in the boardrooms of British firms. Last week’s industrial strategy, Construction 2025, set out an ambition to halve the £6bn trade deficit on construction products, in part through an ambitious expansion of UK contractors overseas. This is a vision of superfit UK firms competing with the strongest of global competitors to win roles on the most prestigious international projects.
If the industry is to pitch to the government for more help to make it internationally competitive, it can’t afford political own goals
But while the UK’s construction consultancy sector - architects, QSs and engineers - can argue they are taking part and often winning this contest with their foreign rivals, the UK’s building firms have yet to get themselves in shape. And this is not to belittle the abilities of our biggest builders - Balfour Beatty, Carillion and Laing O’Rourke all have significant chunks of overseas business. But construction is notoriously hard to replicate abroad, being reliant on robust supply chains, and clients that are willing to pay promptly.
As the boss of overseas investment firm British Expertise points out this week, the government also needs to be aware that foreign rivals may be being helped, subsidised or otherwise favoured by their national governments, in a way that makes them almost impossible to compete against on their home turf. This means that more specifically targeted help will be needed for UK companies to ensure Construction 2025’s ambition for UK building firms is achieved.
Meanwhile, our contractors are increasingly hard pressed just to compete on UK soil: we report this week how Spanish contractor Dragados’ superior bid won it the £560m job to rebuild Bank station, though rivals will eye the 10% saving that client TfL says Dragados’ design allows with some suspicion, given the state of the firm’s home market. Its Spanish rival OHL, one of the 20 biggest contractors in Europe, is also looking to join the fun. So contractors can’t afford to rest for a moment on their laurels - they need to be aware that as soon as the market improves, the UK will be filled with challengers, particularly from the cash-strapped continent, looking for work. But if the industry is to successfully pitch to the government for more help in making it internationally competitive, it can’t afford to score political own goals. Given the current climate of austerity, the pressure we report this week on Laing O’Rourke to be more transparent about its tax position (page 9) is only likely to grow.
If we’re looking to persuade our public clients to buy British, we should at least be able to demonstrate we pay our fair share to the nation’s coffers.
Joey Gardiner, assistant editor