Earlier this year, the National Audit Office (NAO) reported that more than a third of major government projects due to be completed over the next five years were at risk of failure.
Of the projects due for completion by 2020, the NAO gave red or amber-red ratings to 37 of 106 schemes and said that urgent action was needed to improve delivery.
So far the impact of initiatives designed to improve delivery of projects has been unclear, and the NAO’s concerns are growing. The sheer volume of projects in the delivery pipeline, combined with the duration of some, the size of individual programmes, the finance required, and the ambition and complexity of transformation and infrastructure programmes, can only make the challenge greater for the industry.
Costain, which has recently acquired management consultancy Rhead Group, hosted a round table with New Civil Engineer to discuss the barriers to effort to move these projects forward.
“It paints a gloomy picture of the likelihood of any project being a success” kicked off New Civil Engineer editor Mark Hansford speaking of the NAO report.
“But that is not our world and I think
we need to persuade the NAO that we are better than that.”
Potential for capacity constraints
Costain corporate development director Tim Bowen agreed. “Depending on the phasing of the delivery of the National Infrastructure Plan (NIP), there may be capacity constraints. The industry needs to work together to innovate and collaborate in every phase of the project to deliver the business benefits to UK PLC as effectively as possible.”
“So when the NAO talks about failures, we need to know what they mean by it, as it reflects badly on all of us.”
Crossrail programme director Simon Wright disagreed, saying the NAO is naturally cautious.
“The question they are posing is: ‘if action is not taken’. That is the stage we are at today, if you don’t do something you may have a problem. That is all they are saying.”
He went on to say he had observed that, with the growth in infrastructure spending, companies in the industry have not in every case got the skills, the training, and the right innovation.
Heavy investment is needed,
he added. “It’s about people, training and skills. It’s about investment in innovation and technology.
Southern Water director of engineering and construction Richard Price agreed that skills were lacking, arguing that it is the long-term relationships founded on collaboration that make the difference in terms of training.
“It’s the changing of the muscle memory of all those people from the contractor background, to the consultant, to the client backgrounds. There is a real skills development capability challenge at all levels within all our organisations.”
Big project breed confidence to invest
UKPN head of investment delivery Jon Allan said that on-project training only worked on larger, longer term projects, or where there was long-term confidence that those skills would be in demand. “We work collaboratively with others in a way that gives them confidence, and us confidence in them. It’s a two-way street.
“The skills need to be evident from the supply chain as well as from the client.
We should expect our significant contractors, engineers, consultants all to be investing in training, otherwise we haven’t really got much to offer in a world when innovation is key.
Taking innovation off-site
Allan argued that clever thinking was needed with the growth of off site construction.
“Increasingly, innovation is being taken off-site so we need cooperation for that to happen. Technology is vital and innovation is part of that. It is important to be able to look ahead [as clients] to the supply chain as we need to give that visibility to identify opportunities for innovation.”
EY executive director for infrastructure, Geoff Smith, said it was the responsibility of government sponsors and the supply chain to create the conditions for success and “unlock” confidence. “The government needs to make the list of projects more investable, more tangible. The supply chain also has a role, to make the necessary investments in innovation and both capability and capacity”.
Consolidation lessons from other sectors
“UK infrastructure is fragmented. There are examples in other industries where consolidation has taken place to improve capacity and capability, often with the inclusion of industry-wide bodies to represent their sectors and lead on important matters such as government level consultation or training.
“This happens, for example, in aerospace or automotive where they have been able to make great strides in terms of getting organised to improve scale, productivity and efficiency.”
Highways England technology programmes director Richard Moir said skills academies established by big projects such as High Speed 2 (HS2) were leading the way. to national skills investment for the future.
Training academies can benefit whole industry
“People who are trained and develop skills through their academy will not only benefit HS2 but also the wider industry, both in public and private sectors. That is the investment they are making for their future and the country as a whole.”
Moir continued to ask whether this would, and should, be the same for other sectors of the industry. “Is nuclear the same? Airports? Utilities? If public and private companies have longer investment plans, five/10/15 year plans, could they be more likely to invest in skills academies in their own right? Could we have a training programme in all the major industry sectors, if we were able to plan further ahead and be able and confident to invest in the future of our industry? As an industry we need more certainty of the future to make those long term investment decisions.”
Major programme should take the lead
Crossrail’s Wright agreed. “Programmes like HS2 and Crossrail can and should take that initiative, and should take the lead.
“There is an element of client leadership, and public clients are better placed than most to lead, but how should the private sector respond? It depends on the economic climate. We’re perhaps in this golden age of growth in infrastructure, with huge opportunities. We would expect the private sector to pick up the lead from public clients and multiply it several times. Crossrail disappears in 2019. We’ll be gone.
“We can kick start things, sow the seeds, and hopefully the private sector can pick it up and make it fly. But only if there is enough confidence in the long term opportunities.”
Costain programme advisory director Cameron Tonkin said certainty for the infrastructure industry would improve if the National Infrastructure Plan (NIP) were seen as more than just a list. “We offer people good and prosperous careers, invest in training, graduate schemes and skills development. The NIP commitments are a forecast for certainty which in turn gives us confidence to invest.”
New Civil Engineer’s Hansford asked why the industry needed a “security blanket”.
“Even if the NIP became a 10-year-plan, this gives us no guarantee of workload. There is no guarantee long enough,” he said. “Surely we have to have the confidence ourselves to project ourselves. We have to trust the world will need engineering.”
EY’s Smith argued a longer term plan was needed. “We need to develop infrastructure-level skills which are there for the life-cycle of those assets, not just project delivery skills. We aren’t just looking at a 10-year-plan. The nature of infrastructure is a very long-term cycle, it’s not just a 10-year question. With nuclear and high speed rail these are generational questions and challenges.”
Network Rail commercial and development director for infrastructure projects Neil Thompson said the industry must ensure it has the right quality of clients. “We need to look at delivery and the government’s ability to be the client or sponsor projects. Have we got the right quality of sponsorship in the industry, the right quality of clienting? We tend to only focus on the end resource. The biggest challenge for delivering projects within an operational environment is access not resources.”
It was important to have experienced people making the decisions said UKPN’s Allan. “It’s about sustaining that honeymoon period after tender award,” he said. “It’s about being an intelligent client. It means knowing what good looks like, having that knowledge to know when to say ‘yes’ and when to say ‘no’. Likewise with the overall supply chain.”
Does lack of confidence come from the industry?
Hansford asked whether the lack of confidence in the industry is coming from the industry itself. “Crossrail is being delivered, and it’s a big tick in the infrastructure delivery box. We should have confidence in our delivery of programmes.”
Costain consultancy director Nigel Curry feels there is a growing appetite for STEM studies, particularly in engineering.
“Over the next decade there is significant investment required in UK infrastructure, creating an excellent opportunity to attract talent from schools, colleges and universities to help deliver these major construction programmes”
The industry is being held back because it has trouble celebrating its successes, said Crossrail’s Wright. “A good day is when we are not talked about. We keep quiet, keep a low profile, and try to make sure it all goes well. If it all works, nobody gives us a second thought. We don’t celebrate our successes enough, we’re not trumpeting it from the hilltops. That needs to change.”
At the table
Jon Allan, head of investment delivery, UKPN
Tim Bowen, corporate development director, Costain
Nigel Curry, consultancy director, Costain
Mark Hansford, editor, New Civil Engineer
Richard Moir, technology programme director, Highways England
Richard Price, director of construction, Southern Water
Geoff Smith, executive director of infrastructure, EY
Neil Thompson, commercial and development director for infrastructure projects, Network Rail
Cameron Tonkin, programme advisory director, Costain
Adrian Worker, vice president for civil and commercial nuclear programmes, CH2M
Simon Wright, programme director, Crossrail
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