It doesn't have to be this way

The poll shows why construction is perceived as a second-class profession. And that's why the CIOB aims to improve site conditions with its 'Change in Our Sites' campaign, launched last month with a council of war attended by the top constructors in Britain: past and present Building Manager of the Year winners and medallists.

Three big themes emerged at the historic London meeting: industry regulation, barriers to entry, and the thorny issue of whose problem it is. CM will explore these in the coming months but first we address the last because, in the finger-pointing culture of construction, you can't start anywhere else. The most significant result of the meeting was a clear admission that contractors must take responsibility for site conditions. Given that, the next most important question, which this article addresses, is how to make clients pay for it.

TAKING RESPONSIBILITY
It struck a chord when Peter Rogers, chair of the Strategic Forum and a construction client in his day job, stressed that attempts to involve clients in cleaning up site conditions were potentially misguided.

"Clearly the client has a role to set the agenda by preparing a proper brief, employing the right professionals and making sure the ethos of the project enables a positive working spirit and integrated team work," he said. "But you can't ask clients, particularly one-off clients, to take a huge interest. It is simply not their business."

In fact, he said, it was downright dangerous to continue pressurising clients. "You will then get the BAA reaction which is effectively to take over as I think they are at Terminal 5, where they are effectively becoming a new-style contractor."

Rogers' message challenges the tendency to point fingers. Many despair that the industry can ever control itself, and call on government to wield a big stick. Colin Busby, chair of the MCG and upcoming president of the CIOB, has called for 1000 new inspectors. We reckon that'll cost the HSE an extra £25m, guessing that the average annual salary for each would be £25,000. The current cost of running the construction division is around £14m each year.

"We haven't got a cat in hell's chance of getting an extra 1,000 inspectors," said Kevin Myers, the HSE's head of construction. Myers pointed out that the HSC was founded in the 1970s on the principle that industry has to take responsibility for health and safety, not government.

In other words, that the risk is managed by those who create it. "Calling for an extra 1000 inspectors is just the industry transferring its responsibility to the regulator," he said.

Those at the coalface of the successful contracting organisations know their role is central. In a survey of 14 of the BMYA winners attending the campaign launch, a majority indicated that contractors are too willing to scrimp on prelims, which include provision for welfare facilities, in order to improve margins. Just under half of them said prelims were the first to go in any cost-cutting exercise. Nine out of 14 said site managers were not powerful enough to improve conditions on their own, and eight out of 14 said their companies did not have pan-organisation guidelines defining minimum welfare requirements.

Perhaps most significantly, 11 of the 14 confirmed that partnered, negotiated and framework contracts lent themselves to better welfare and safety provision than one-off, competitively tendered bids.

We haven’t got a cat in hell’s chance of getting an extra 1,000 inspectors

Kevin Myers, HSE

THE MASTERPLAN
These people are mainly practitioners, and not chief executives. Generally they represent successful contractors and they mark a refreshing break from the "I'm alright Jack" line of the Major Contractors Group. This is welcome because according to CM research in March, workers, subcontractors, consultants, clients and even main contractor employees give major contractors a less-than-sparkling report. Forty of the 109 people who responded had been on five or more MCG sites in the last year. 37% of those reported that on half or more of these sites they suffered working delays due to poor organisation; 22% said 50% or more of the sites were unnecessarily dirty or uncomfortable, and a quarter of them said that on 50% or more of the sites they witnessed unsafe working practices.

It is very encouraging that nearly 80% of all 109 respondents said they thought site conditions have improved over the last three years. However, there is clearly some distance to go before the public stops seeing farms and high street shops as better places to work.

So what is to be done? For a start the CIOB is inching down the name-and-shame route by issuing a protocol for official CIOB visits to sites. This means the president, his officers or any Institute employee on an official visit must terminate the visit if conditions don't come up to par. The idea seemed good enough to Peter Rogers, who took it to construction minister Brian Wilson in the hope that government visitors to public projects would walk off shabby sites as well.

But at the site conditions war council a more profound process got under way. First on the agenda was tackling the pricing of prelims in a way that protects the money spent on health, safety and welfare. Psssp! went the can of worms. This subject focuses attention on the most important issue, namely, how to make the client pay for better site conditions.

Andy Sneddon, health and safety director at the Construction Confederation, says: "Despite the accountabilities that lie with clients in CDM, it is common practice for them to offload this responsibility onto principal contractors, who are left to finance effective risk control out of a contract costing that has paid little or no attention to the risk inherent to that project."

Some say this implicates cost consultants, and they are not eager to answer the charge. We asked three large consultancies (Davis Langdon & Everest, Cyril Sweett and EC Harris) to help define how much it costs to build safely and with due consideration to workers. All three declined to comment, despite an initial enthusiasm for the topic. Even the RICS failed to respond. Only one offered comment. Charles Johnston, chair of MDA, said that to accuse cost consultancies of being somehow complicit in starving health, safety and welfare (HSW) of cash is "fatuous". He threw the ball right back into the contractors' court.

"There is plenty of evidence out there, like the BRE's Calibre project, that shows real productivity gains coming out of well-run sites. If contractors want to price more for health, safety and welfare, they should have the courage of their convictions and price for it," he said.

Clearly it's up to the contracting community to lead the way. In the days following the workshop CM asked 15 experts to suggest ways of protecting prelims at the competitive tender stage. Our assumption was that prelims are among the first to get chopped as companies struggle to protect margins. Therefore, we need an adequate method of calculating health, safety and welfare costs.

Furthermore, this needs to be transparent and simple so that if contractors sought to undercut each other on these items, the client advisers would know. We asked 15 people and we got 15 different answers. But there was a common thread: money for safe, clean and well-organised sites needs to be protected from cut-throat competition.

Said consultant David Trench: "I would like to see prelims (excluding staff and mechanical plant) provisionally summed in tenders so it is expended by the whole team including the client after the selection of the contractor. This would give balance without biting into profit, nor would prelims be cut in the tender process."

If we want a first-class product, we must invest in the people building it

Neil Grassie, RBS

FLAWED FORMULA
We asked: Should it not be possible to create a simple but effective formula for estimating HSW costs, articulated in pounds per cubic meter, if one creates a healthy range of site categories which accommodate big sites, little sites, inner city sites, greenfield sites and so on?

Hardly any CIOB members liked the idea.

"I don't think so," said Kenny Anderson, MD of Anderson Construction in Aberdeen. "There are so many different factors on even similar projects that this approach would be flawed. It would carry too great a risk. A properly presented appraisal of health and safety requirements must be costed and form part of the estimate at the tendering stage."

Michael Greaves, formerly property services officer at Somerset County Council, suggested a more robust method. "I don't like the sound of a rate per cubic metre," he said. "I would prefer a rate based on the forecast cost of the project. This could be a percentage, say 5% of the project cost, but weighted for higher-risk works. The client could express a weighting as part of the health and safety plan."

Greaves agreed with David Trench: "Unless you made health and safety costs a provisional sum in the contract I don't see how contractors can be forced to ring fence a sum of money sufficient to cover their likely costs."

Ray Brown, partner with Bristol property agent Alder King, brushed aside a pounds-per-cubic-metre formula in favour of a much simpler tactic – a generic checklist of all the items to consider, with a risk weighting. Brown also said this is an issue CIOB members could tackle with ease. "A group of panellists could brainstorm this in a morning and it could become a guidance document available through the CIOB," he said.

The CIOB has agreed to lead this discussion. Richard Thorpe, a BMYA medallist and Mace operations director, kicks off the debate (below), arguing that at the very least, 8% of the overall project budget should be spent on shared preliminary costs.

"It goes without saying that if we invest in a high quality environment on our sites, we will see a return on our investment," he writes.

THE LUXURY TARGET
At the moment Thorpe may be the best-qualified man to speak on this issue. He is managing the construction of the Royal Bank of Scotland's new HQ in Edinburgh and has managed to convince the client to spend more than the industry average on organisational costs, which include health, safety and welfare. The result is outlandish luxury by industry standards. The five starkest examples are:

• Centrally located drying and changing facilities with tool store lockers;
  
• Boot wash facilities intended to reduce the amount of heavy industrial cleaning;
  
• Fully co-located office with integrated IT and audio visual communication (plasma screens for announcing safety awards, project progress and even news on the war in Iraq). Plus restaurant facilities;
  
• On site retail facilities selling items such as newspapers, cigarettes and cards together with a hire shop for all types of construction kit;
  
• Full facilities management services.

The overall costs of these items reach single digit millions. Thorpe believes this up-front investment pays dividends because he saw it while building the GlaxoSmithKline headquarters in Middlesex. There, he convinced the client to spend 10% of the project cost on organisational set-up. He says the client recovered an equivalent amount thanks to improved productivity.

"It's the norm to keep costs low, so workers expect low standards and these low expectations turn into overruns," he told delegates to the CIOB workshop last month. At the RBS headquarters in Scotland, the client's head of construction liaison, Neil Grassie, admitted it was a leap of faith and that there was no hard business case for the extra up-front expenditure. But he takes it as a good sign that the project is heading for one million person hours without reportable incident. He also notices that general labourers are switching employers to remain with this job.