Chief Business Development Officer at Wolesely's speech 'Construction at the heart of the economy'
Good evening ladies and gentlemen. I am very pleased to see so many people here.
This is an event that has been organised by the three main umbrella bodies in the construction industry, and although within that I represent the supply side – product manufacturers and distributors – my brief remarks this evening are on behalf of the whole of the construction industry.
That industry has an output of more than £100 billion a year; it employs nearly two and a half million people, and accounts for around 8% of GDP. That is why the title of our Reception this evening refers to Construction as being at the heart of the economy.
Through the combined effort of the different parts of our industry we create:
- What business needs to be competitive on a world stage – the buildings in which companies operate and the infrastructure which they use to get their goods to market in this country and overseas.
- What society needs if we are to constantly improve the quality of life for people in this country – the hospitals, schools, housing, and transport infrastructure, as well as the recreation and other facilities that people properly aspire for in the 21st century. The things that politicians of all parties promise the electorate that they will deliver.
We also provide one of the major vehicles through which society can respond to the challenge of climate change and the recognition that everything we create has to be done so in a more sustainable way. As an industry we have to be far more efficient in the use of the resources we use, whilst at the same time developing the products and solutions that will ensure
- all our new homes are zero carbon by 2016,
- that we dramatically improve the energy efficiency of the existing housing stock,
- and that we meet similarly demanding targets for the other buildings in both the public and private sectors.
Health and safety has also to be at the very top of our agenda. It applies equally to the way my company operates as a major distributor as it does to those quarrying or manufacturing product, and to those working on construction sites. Important progress has been made in a number of areas, but it has been of enormous concern to all of us to see the increase in fatalities and serious accidents on house building sites. No accident is acceptable anywhere for any reason, and we must work together to ensure that this is a message that is accepted and acted upon across the whole of the industry.
I do want to keep this brief and to enable us to enjoy our hospitality this evening. However, there are just 3 messages I would like you to take away.
1. Ensure the Comprehensive Spending Review later this month maintains the momentum for investment in our public infrastructure.
We know this has been a tight spending round and maintaining a sound economy is as much a business priority as it is Government’s. But now is not the time to reverse the increased investment we have had in our schools, hospitals, and social housing. The job is far from done and indeed on the transport infrastructure it has still to begin in any effective way.
We can’t expect expenditure on the built environment to grow at the same rate as earlier in the decade, but if you don’t maintain the current levels of spending in line with growth in the economy we will only build up a further backlog of inadequate supply and disrepair and the progress that has been made in a number of these areas will be undone.
Secondly, ensure your spending programmes on the built environment have clear output targets.
We know how many social houses you want to build and the Building Schools for the Future programme tells us the number of schools to be rebuilt and refurbished. Make sure that all programmes have such clear output targets. That is the real basis on which you can judge the progress you are making and we can assess which investments we need to make to ensure we can deliver what you want.
Thirdly, work with the industry to bring efficiencies to the delivery of these projects.
The National Audit Office told us in a report over 2 years how Government could save almost £2.5billion if it looked at a more integrated approach to procuring public sector construction projects. It urged the government client to look at appointing integrated supply chains based on best value not the cheapest they could find. Progress in that direction has been disappointingly slow, but just think of what those potential savings could deliver in terms of additional facilities, increased pensions, or tax cuts – that is a real choice for the government of the day. And the message is just as important for those of you working in local government as it is in central government.