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Government, we need to talk about construction

When the news broke on Friday that Lord Prior was to step down as construction minister after 10 months in the post, it was greeted with little surprise at CN towers.

“What number is that?” a colleague called across the room.

Lord Henley, the new construction minister, is the fourth to hold the post in the last two years.

When it was revealed that Lord Henley was to take over, I recalled a conversation I had on the day that Lord Prior was appointed back in January.

“In ministerial responsibilities, when it goes to parliamentary under-secretary and parliamentary under-secretary of the Lords, that means the secretary of state doesn’t want to look after it, the minister of state doesn’t want to look after it, and nobody from Number 10 can be bothered to bitch about it,” an industry source told me.

The government did little to quell that school of thought a few weeks after my conversation, when a leaked report revealed construction was ranked as a “low priority” sector in the Brexit negotiations.

While the government was quick to refute this, events this year have done little to stave off the feeling that construction is the runt of the litter when compared with other sectors.

Take the problems of the UK’s top 10 contractors this year, operating on average margins of -0.5 per cent.

More specifically, look at Carillion and Interserve, who have both seen their share price collapse off the back of profit warnings. 

But so far the government – which utilises both companies – has been relatively quiet on the tribulations of these two major firms. 

The collapse of Interserve or Carillion, which is still not out of the question, would be catastrophic.

Catastrophic to the thousands of staff both firms employ, catastrophic to the hundreds of subcontractors both companies use, and catastrophic to the hundreds of millions of pounds of government contracts they currently carry out. 

Then there is the skills challenges the sector faces.

While ministers will talk about the need to build critical infrastructure, their swiftness in responding to the challenge of finding enough people to build these projects has been lacking.

Just over a year ago, Mark Farmer published his “Modernise or Die” report.

While it received a warm welcome from the government following its release, actions have been less forthcoming.

The CITB review launched in October 2016, is still yet to be published, despite a consensus vote on the body taking place in the summer.

Construction is a sector in a difficult position at the moment, and needs the support of government. A generous sector deal will be a good start.

It is up against sectors like the ceramics industry and audio-visual sector for the prize it seeks: a £250m grant for research and development to boost productivity.

Yet while sectors like the ceramics industry and audio-visual are important, the ceramics industry isn’t responsible for 7 per cent of the UK’s GDP, and the audio-visual sector doesn’t maintain the railways, build affordable houses or construct the plants that power the nation.

The Department for Business, Energy and Industrial Strategy industrial strategy is expected in the next month, and is expected to list the various sector deals it has agreed.

Construction needs to be front and centre of that deal, with a healthy cash injection, too.

The gesture would be a great step forward, not only to modernise and improve the productivity of construction, but also a symbolic step in showing our sector that it is at the forefront of the government’s industrial strategy.

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