Paul Morrell argues that for the construction industry to be fit for purpose it must get itself fit first.
It could get annoying, this “more for less” thing. Those working in construction have seen the market contract, with prices following the workload down, and they are already under daily pressure as businesses seek to control staff costs and numbers.
Then, as we wait patiently for things to get better, we are told we must do still more, and yet get still less. It just isn’t fair. But anyone who seriously thinks it can be any different just isn’t paying attention.
All three of the major political parties’ prospective chancellors made clear this week that, at some stage, we face deep cuts; and it seems unlikely that an industry that is responsible for about 60% of the country’s fixed capital formation will escape.
“We must explore every way of making our product more affordable for clients, public and private, whose own incomes are under unprecedented pressure.”
Yet government also knows that we need the social infrastructure to educate those who will create the nation’s future wealth, and keep them healthy; that we need the physical infrastructure to provide the utility and mobility that a vibrant economy depends upon.
They also know that we need to construct the means by which that economy will make the transition to low carbon.
That’s a lot of need, and it all depends in turn upon another: in the words of the preliminary report of the Low Carbon Construction study commissioned by the Department for Business Innovation & Skills, if the industry is to be fit for purpose, it first needs to be fit.
And it cannot invest in its people, in new equipment or in research and innovation - in all of the engines of efficiency, if investment in construction itself continues to fall.
And so we come back to “more for less”. If money directed towards construction is indeed to be regarded as investment, rather than a subsidy for inefficiency, then we need to address our historic position as one of the most expensive places in the world to build.
Protected from international competition, construction has consistently followed a cycle of prices rising above the general level of inflation in the economy in busy times, only to suffer a vicious correction when the market stalls. That is no way to manage prices.
“We need to chase the problem right back through the process, to eliminate waste. And if not now, when?”
Instead, we must explore every way of making our product more affordable for clients, public and private, whose own incomes are under unprecedented pressure. There is no magic bullet for this.
There is unnecessary cost right through the process, from regular clients who respond to innovation by saying “that’s not how we do things”.
This includes codes that outstrip those operated by our international competitors, for no good reason; to over-design, including excessive margins for risk and a failure to design for manufacture; to wasteful layers of management and oversight; to ineffective procurement practices; and finally to a failure to create a productive environment on site.
And, by the way, I suspect that labour productivity is the least of it, and that any imported labour working under the same conditions would fare no better. So we need to chase the problem right back through the process, to eliminate waste. And if not now, when?
● Paul Morrell is the government’s chief construction adviser