Nine billion pounds worth of work coming down the pipeline shouldn’t be seen as easy pickings
In May 2001, on a cold wind swept university campus in Southampton, Tony Blair was setting out his case for a second term of office. He stood on the raised platform and declared, with the great sincerity for which he was famed, that as far as the Labour party were concerned once he was returned to power… “Our top priority was, is and always will be education, education, education.”
Perhaps he should have been more specific and said higher education. Prior to that first Labour term of government between 3-5% of the population could hope to aspire to graduate with a degree. Now in 2014 some 13 years since that speech it is more like 53% who will leave with their scroll and graduation photo. The market for knowledge is huge and with this comes a great opportunity for those of us that help provide the built environment in which people learn.
This has been highlighted by the recent survey from Deloitte which follows on from a report by the Russell group of top universities showing that from their elite cabal, 24 are due to spend more than £9bn on new teaching facilities, accommodation and IT infrastructure. The race is on to attract students and four out of five university finance directors are planning significant increases in capital expenditure over the next year to fund new facilities.
The head of department or chemistry professor may not be concerned about technical facets of the new building but may have a specific interest in specialist equipment or research. Nevertheless he or she is the ultimate client
The amount that they intend to spend is obviously fantastic news for those that have the skills, knowledge and experience to deal with these specific projects. Construction for higher educators is a specialist area of activity. They are some of the most interesting and quite rightly, demanding of clients. In spite of the new market for education that is creating this building boom often those involved in the construction process from academe are not inspired or motivated by the commercial agenda that say a developer might offer.
If for instance if you are delivering a new purpose built chemistry faculty, the head of department or chemistry professor may not be conversant or even concerned about technical facets of the new building but may have a specific interest in one small part of the project related to specialist equipment or research. Nevertheless he or she is the ultimate client in this instance. Hence communication and visualisation of designs and concepts are vital before and during the construction process. Those in the team assisting the professor might include the capital works officer, looking at budgets and the estates management team who are considering the on-going management of the building after it has been handed over.
Where educationalists may have also been different from their commercial developer counterparts is their adoption of BIM technology, quickly embracing the ability to gain real time information, design and specification changes and how they may affect the budget.
Traditionally the further education client has an immovable fixed budget, whereas the commercial client may be able to vary a cost per square foot based on projected rental yields. For the finance director of a large university once the building is created there are very few variables that allow him or her to derive greater income from the space once it is built. They therefore have very strict budgetary controls in place which can be the subject of tension should the departmental head feel that their voice is being subjugated at the expense of the costs. These dynamics within the group need to be handled diplomatically by the project and cost team.
Where this is different from commercial projects is the juxtaposition of the various stakeholders with an overriding academic agenda managed by a professor who may never have been exposed to a construction project of this size and complexity but has the responsibility for the delivery of the end of product – the qualification. Our job is to manage those relationships and bring the project to a successful conclusion.
However, wherever and for whomever you work construction is always full of challenges and that is part of the reason we all work in the creation of the built environment. Remember that the potential workload involved is staggering with 54% of finance directors’ expecting to borrow from the bank to fund these new projects and just over half even considering a bond issue to raise the finance.
As the headline in the Financial Times put it “Universities plan for Building Bonanza!” as an industry we should ensure we are ready.
Richard Steer is Chairman of Gleeds Worldwide.