Since 1980, there have been six general elections and continuous revolution in our industry. The new government must keep up the pace of change
General elections encourage historical reflection, and in this post-election period I’d like to review the industry over the past 25 years. My first column appeared on 11 April 1980, when Margaret Thatcher had been prime minister for one year and Jimmy Carter was president of the United States. There was no Construction Industry Council, Construction Confederation, Specialist Engineering Contractors Group, or most of the other organisations we read about in Building. “Well,” you might think, “that’s good. Who needs them? The industry worked perfectly well without them.”
No, it didn’t. Of course, builders, architects, quantity surveyors, engineers and others – most of them in small or micro businesses, many of them just one person – got on with their jobs. Some thrived, some failed. Many household names in 1980 no longer exist; major firms today had not been set up then.
Let’s recall some industry features we now take for granted which were unknown in 1993/4, when I was doing my research for Constructing the Team, let alone 1980. No constructors or designers talked about benchmarking, which was regarded as impossible. Every job was different, bespoke, architect- or engineer-designed, often involving nominated subcontractors and with a transient workforce. How could you compare one project’s performance with another? Nobody talked about supply chain management, either. The contractor was chosen competitively by the client, who was advised by the architect. The subcontractors were chosen by the main contractor, usually from a long list of tenderers, or else were nominated. There was no clear link of contractual or management responsibility.
Other terms considered normal nowadays but unknown or barely understood in 1980 were project management, design-and-build, construction management, adjudication, best practice and, above all, partnering. The attitude of the architectural profession to the discipline of project management was that it did not exist or, if it did, the architect did it as contract administrator. There was no NEC/EEC, PPC2000, JCT 98, ICE 7, Highways Agency, Defence Estates, PFI, Procure 21, LIFT, ALMOs, prime contracting, CSCS cards, health and safety tests and many other features now taken for granted in procurement and contracts, and which have greatly assisted performance, quality and cost control.
In 1980, no constructor or designer talked about benchmarking. Every job was different, bespoke
One of the biggest changes since 1980 is the growth of domestic subcontracting, much of it on a labour-only basis, which represents about 95% of value of the work done on site. Nomination has now largely disappeared, especially in England. When I began my review in 1993, the big issue for subcontractors was their treatment by main contractors. (Incidentally, main contractors had similar payment problems with clients, and sub-subcontractors also grumbled about their relationships with major subcontractors.) Such unhappy stand-offs were one of the main reasons for the commissioning of my review. Since then there has been a significant growth of real partnering, which is welcome, but a good deal more needs to be done to ensure that it ripples along the supply chain.
The Construction Act has been another major innovation. People sometimes say to me that “nothing has changed”. When I ask them why, it boils down to not always being paid what they demand. I reply that they should be paid promptly what they are properly owed. If they do not receive the proper sum, they have rights of adjudication, which they did not have before 1980 and which thousands of firms have used. Some say that they do not wish to go to adjudication because it might upset their client. I reply: “Why do you want to keep working for a client who does not pay you properly? There is plenty of work around. Don’t work for the poor payers.”
The industry has changed. It is more efficient, more responsive, more focused on client requirements and more tuned to best practice outputs on quality, price and predictability. We have seen 25 years of real progress. The new government will have a major role to play in ensuring that the public sector delivers best practice, and Peter Rogers’ Strategic Forum must enthuse clients and all industry sectors to work more closely together. There is still a long way to go.