Business minister says government expects to be held to industrial strategy “ambitions”


Business minister Michael Fallon has said that he is happy to be held accountable for the delivery of the four central “ambitions” in the government’s industrial strategy for construction.

The document, launched today at Building’s Government Construction Summit, sets out ambitions to: reduce construction time by half; knock a third off construction costs; and reduce both the construction trade gap and emissions from the built environment by half - all by 2025.

Asked if they were described as ambitions because the government didn’t expect them to be met, Fallon said: “I’m happy to say these are targets and I’m sure people are going to hold us to these.

“The objectives are very stretching for the industry, but we want our biggest names in this industry to be competing across the globe. And the industry has a long way to go [to meet these targets].”

Cross-party support

Fallon said he had not specifically got a commitment from the Labour Party to support the ambitions, which run across two general elections, but that Labour had been broadly supportive of its overall industrial strategy policy, launched by business secretary Vince Cable last Autumn, and had specifically supported individual industrial strategies for the automotive and aerospace industries.

The ambition to reduce construction costs by 33% is from a 2009 benchmark, and therefore includes within it the target in the government’s 2011 construction strategy to reduce costs by 15-20% between 2009 and 2015.

The ambition to reduce construction time by half takes account of the entire process from “inception to completion”, therefore including time taken in the planning process.

However, chief construction adviser Peter Hansford said there were big opportunities to reduce time spent actually constructing buildings specifically.

He said: “Without doubt the construction phase can be reduced further. Part of the retail sector says they’ve already done this.”

‘Getting our hands dirty’

Meanwhile, in his keynote speech this morning, Fallon told delegates that the government’s new strategy for the industry will “get its hands dirty” by tackling current challenges like cash-flow problems.

Fallon said the new Construction Leadership Council, alongside the Institute of Credit Management, would introduce a new fair payment charter for the industry by the end of the year.

Fallon said this would use the principles of the existing Prompt Payment Code, but would be specifically tailored to construction.

He added the government would also extend the Enterprise Finance Guarantee scheme, a loans guarantee scheme, to “support trade credit for the first time”.

He said 300 trade customers of product manufacturer Kingfisher were already benefitting from a trade credit pilot project.

Responding to scepticism that many such fair payment initiatives have been launched in the past, Fallon said: “It’s precisely by binding the industry into the commitments they have made in the strategy… that we will make sure that industry takes charge of this.

“This is something the industry has to own and take charge of itself.”

Fallon also said the new Construction Leadership council would help the industry “punch at its weight”.

He said the industry should be on a par with the aerospace sector in influencing government and wider society. He called the new strategy for the industry a “true collaboration between government and the industry at the most senior level”.

Fallon also urged UK contractors to do more work abroad and said construction products made in Britain should be more widely used.

Safety drive must extend to SMEs

Meanwhile, in his key note speech, Hansford called for a major safety drive in the industry, telling delegates that “we must strive for zero harm across the industry”.

He said there had been “enormous progress” on site safety over the past decade, but this mainly achieved by larger firms.

“Seventy per cent of fatal accidents now occur in the SME sector,” he said. “We must turn our attention to small projects.”

He added that improving occupational health should also be a priority for the sector and said he was committed to extending the Trust Mark scheme further in the industry. Hansford called the new strategy for construction “the start of a journey” up to 2025.

He said: “Imagine a world where buildings and infrastructure are conceived and built faster, with better whole life costs and low energy costs,” he said.

“An industry that leads the world in research and development, advanced materials … and the use of exciting new technologies.”

He said such an industry could attract the best “girls and boys” to join it.