Construction is responsible for one-fifth of Britain’s output and affects huge swaths of government policy – so why has Whitehall divided it over eight departments?
“Construction is perhaps unique in the way it impacts upon, or can facilitate delivery of, policies of almost all government departments.”
The sentence is taken from the minutes of an interdepartmental meeting in Whitehall held on 3 September last year. And it suggests that our policy-makers recognise the value of the construction industry. As well they might: the built environment sector is worth £200bn per annum and accounts for one-fifth of the country’s economic output.
So it may seem odd that, at the end of last week, three members of the Property Consultative Group were moved to deliver two reports complaining about the way Whitehall treated the industry. One was by Richard Saxon of the RIBA, and Louis Armstrong from the RICS; the other was by Graham Watts from the Construction Industry Council. Both were handed over to the Office of the Deputy Prime Minister and both had the same aim: to detail how construction has been downgraded by the government.
For example, Whitehall is devoting fewer resources to the industry than it did – it is now the responsibility of a grade five civil servant, whereas in the 1990s it was led by a grade three official with a much larger directorate.
It is also split up between eight departments, which makes it impossible to co-ordinate. As Saxon says: “Public policy is hugely dependent on the construction industry, from sustainable communities to health and education, and yet government isn’t joining up policy. Nobody considers themselves in charge of it all, because nobody perceives there to be an ‘all’.”
The current lead department for construction is the DTI. It was transferred there from the former DETR largely so that it could be integrated with the department’s trade missions. But construction is peripheral to the DTI and, according to Saxon, it does not need a state sponsor to boost its exports.
Saxon believes that construction should sit in the ODPM, as do key officials within that department, who argue that it would help them to deliver the government’s housing plans and promote off-site construction and sustainable building.
Nobody considers themselves in charge of it all, because nobody perceives there to be an ‘all’
One difficulty with this solution is that there could be a perceived conflict of interest; the ODPM would, for example, have the job of sponsoring and assisting the construction at the same time as it was regulating it in areas such as planning. The question would be, says Saxon: “How could the ODPM be both tough and supportive?”
However, he goes on to argue that this problem may be exaggerated, as the industry is not in need of support so much as proper co-ordination, and this should be the key consideration given to where construction sits in government. “The ODPM looks like the obvious building block.
There needs to be rationalisation after the next election,” Saxon says.
Watts is more appreciative of the perception of conflict of interest and less prescriptive in where construction should be located. But in some ways his paper goes even further. In his report he argues for consideration to be given to the creation of a superministry, and concludes with the following statement of intent: “The representative bodies of the construction industry call upon the government to reverse this policy of a fragmented recognition of the industry and consolidate responsibility for sponsoring the elements of designing, constructing and maintaining the built environment within a single document.
“This could be a new Department of the Built Environment or a major directorate within an existing department led by a senior civil servant. It should, at the very least, bring together sponsorship responsibilities for construction, building, building design and architecture, planning, housing, plumbing, surveying, building services engineering, structural engineering, sustainable communities and sustainable construction.”
In making his argument, Watts recalls the Egan report in which government exhorted the construction industry to develop an integrated approach to projects. This would mean architects, structural engineers, civil engineers, housing experts, plumbers and building services engineers coming together to work on the scheme – yet these sit within four separate departments of state with little or no co-ordination between them.
The Watts report: How construction has been devalued by government
1992 Michael Howard, the secretary of state at the Department of the Environment, reviews sponsorship of construction. It remains with his department, alongside housing, Building Regulations and planning.
1992-97 The construction directorate within the DOE is headed by a grade three civil servant – first Phillip Ward and then John Hobson. They oversee five divisions, each headed by a grade five official. These include export promotion, market data and statistics. Total staff numbers are 250.
1997 Construction sponsorship remains with the DOE after it changes to the DETR. Nick Raynsford becomes the construction minister. This is a junior appointment, but Raynsford is later promoted to minister of state.
1997-present Construction previously had regular meetings at secretary of state level, but there has been no pan-industry meeting with such a figure for the past seven years.
2001 Construction sponsorship is moved to the DTI and is led by Elizabeth Whatmore, a grade five civil servant. The previous divisions of the directorate, such as market data, innovation and research, are now divided across the government.
2003 Nigel Griffiths becomes construction minister. He is a parliamentary undersecretary with responsibility for construction, small business and enterprise.