The Farmer Review is the latest report to call for the fragmented built environment sector to embrace truly collaborative ways of working. The entire construction industry must come together if we are to fulfil our potential
It’s now been weeks since Mark Farmer published his report, Modernise or Die, delivering a sharply critical analysis of the built environment sector today. It will take more time to figure out exactly how we are to respond to the report’s challenging recommendations, but respond - with action - we must.
I am determined not to let this opportunity pass. We have had reviews of the industry in the past, for example, those produced by Sir Michael Latham in 1994 and Sir John Egan in 1998.
But this is a new, fresh opportunity. We have to avoid returning to previous form, which is to acknowledge our shortcomings but then carry on as if nothing was wrong.
Among other reasons, the UK leaving the European Union presents additional challenges to an industry that was already struggling with a vulnerability to economic cycles and a shortage of home-grown talent in many key skills areas.
The Farmer Review came to some stark and dramatic conclusions, but these are probably not exaggerated. As chairman of CITB, I particularly appreciate his detailed analysis of what is wrong with our current system for developing skills. I agree that CITB needs reform, and I am working with the CITB team, together with government and the industry, to deliver that.
In such a fragmented industry as ours, collaboration across the value chain is vital to working productively, yet is too often lacking
In particular, we should seriously consider Farmer’s recommendation that CITB is given a broader mandate that allows it to look at skills needs in the future and to actively promote innovation.
We will of course be working closely with the government’s review of industrial training boards, as announced in its Post-16 Skills Plan.
The more recent announcement that Paul Morrell will lead this review is good news indeed - lending it serious gravitas and understanding of the industry. But we need to ensure that the multitude of governmental reviews and overlapping plans do not paralyse us or otherwise delay action. There is plenty for us to be getting on with.
I also welcome the Farmer Review’s insight into the role that clients have to play in delivering the necessary change. Indeed, in such a fragmented industry as ours, collaboration across the value chain is vital to working productively, yet is too often lacking.
Fortunately, even before the release of the Farmer report, we had been seeing progress in this area. For example, there are now six major client organisations that have joined Build UK, the industry group that I chair, showing a real desire to engage with the supply chain. They want to be around the table to collaborate on working practices, and Build UK is providing that forum.
Understanding each others’ business models, and sharing in risks and efficiencies is at the heart of collaboration, and it starts with a mindset
Of course, we won’t be able to change the structural nature of the industry overnight. It is simply not possible to start merging design, engineering, construction and related firms
in order to achieve the same sort of integration that other industries have, where a single company is in control over everything from the concept to delivery of the product. However, we can behave more like that.
Here’s an example of what I mean: my company, the Wates Group, was negotiating prices for high-end kitchen equipment for a large residential building, and we found that there was little scope for negotiating bulk discounts with the manufacturer. However, we dug deeper.
We discovered that the manufacturer was bearing considerable storage and transportation costs, moving the product from mainland Europe to a holding facility in the London area, before redistributing.
We found a way to help the supplier save money by transporting the goods directly to our building site, and we both shared in the cost savings.
That is a small but symbolic example of how we can collaborate better across our supply chain and work together to deliver better value for money.
Understanding each others’ business models, and sharing in risks and efficiencies is at the heart of collaboration, and it starts with a mindset. It is the sort of shift in attitude that is necessary to deliver the reforms that the Farmer report calls for.
In its conclusion, Farmer’s report indicates that “cherry picking the recommendations will dilute effectiveness”. Tweaking here or there is not going to achieve the change needed.
This means all of us are affected and all bear some responsibility; we all must change.
James Wates is chairman of Wates Group, the CITB and Build UK