With a general election now only days away, Construction News is counting down the top issues facing construction that need to be tackled by the next government.
In the second part of our top 50, CN takes at look at the role of heritage in the sector, the importance of BIM in driving innovation, and the future of the UK’s airports over the coming decade.
40) Commit to restoring heritage assets
Heritage can often be overlooked in terms of value to the construction industry. However, the sector is a vital source of regular work and employs a highly skilled labour force. Plus, as Graham’s appointment to the £50m revamp of Kew Gardens attests, many of the projects can be long term and high value.
RICS president Amanda Clack argues that maintaining and supporting the UK’s heritage assets is important if the UK wants to retain its talented skills craftsmen and women.
It is not just simply a question of restoration either. One example is Argent’s incorporation of the old gas cylinders in its wider masterplan for King’s Cross, which has allowed inward investment to meld with an uplift in the cultural value of the area and the restoration of the grand monuments of Victorian transport.
So detailing how the government plans to invest or secure investment and collaboration into the nation’s heritage is a big deal for the industry. Ms Clack says: “I can remember walking into King’s Cross and they have a photo of the amazing roof they had built. You go into St Pancras and you say wow. Heritage is key to the success of both of these.”
39) Tackle the costs of doubling up on public tenders
Any contractor looking to land a large contract will be frustrated by the time and vast resources put into the bidding process. Research published in 2015 found that firms winning an average of one in five projects could be spending as much as 22 per cent of their operational turnover winning work.
The win ratio is crucial for companies looking to avoid problem jobs and determining whether to bid schemes in the first place.
However, when it comes to public tendering, firms often find they have to start from scratch on prequalification questionnaires (PQQs) when bidding for new contracts within the same local authority or public body.
This doubling up and data duplication adds time and cost for both sides. Frameworks have helped allay these problems by allowing multiple jobs to be quickly tendered to a pre-allocated pool of contractors, while the PAS 91 standardised PQQ has also helped suppliers reduce the need to complete a variety of different forms. Nevertheless, a fresh look at how the process can be further streamlined is required.
38) What’s the post-OJEU plan for public sector tenders?
With all public procurement firmly embedded within the OJEU process for decades, any companies looking to work with the public sector have had to sign up to the method of public tendering. Though OJEU is considered bureaucratic, it has become standard practice for higher-value contracts.
However, in just under 24 months’ time that process could be no more. What will replace it is not known and the question of whether UK firms will still be able to access OJEU tendering for other countries across the EU is unresolved.
The lack of clarity adds a huge amount of uncertainty for the industry – especially clients who rely on public procurement for their revenue pipeline. Public sector work won’t simply dry up, but the upheaval could disrupt cashflows or see staff temporarily cut until the picture becomes clear.
The government has its work cut out to deliver on this critical issue for all sectors of public procurement, not just construction. A bit of clarity – perhaps with a green paper on the future of OJEUs and the system that will replace it – would at least be a start.
37) Press ahead with innovative procurement such as IPI
Sorting out procurement is a task that could arguably take a lifetime. However, pushing ahead with innovative models such as Integrated Project Insurance (IPI) for major projects would be a welcome boon for the industry.
Currently undergoing trials in the UK, the IPI model is being tested at Dudley College, where it is expected to cover cost overruns on a ‘no-blame’ basis and to include measures to minimise the risks of delay and cost increases.
The plans form part of the government’s construction strategy published in 2011 and updated in 2014. In its search for costs savings, Whitehall also embarked on trials of other procurement models such as cost-led procurement and two-stage open book.
Sharing the results of these trials and determining whether they should be rolled out more widely to aid collaboration across supply chains would be welcomed.
Specialists 2017 BIM Excellence Plowman Craven
36) Enforce the BIM mandate and press ahead with Level 3
BIM was identified by the government as an area where its intervention could lead to positive change. By mandating the use of BIM Level 2 on all centrally procured public contracts, it drove a step-change in the way the industry collected and used data on projects.
Yet the latest report by the National BIM Service found that not all government departments are sticking by their own mandate. Also, many in the industry believe that Level 3, which will take in the lifecycle of a building and driving greater efficiencies, is where the real cost savings can be found.
Arcadis head of strategic research and insight Simon Rawlinson says: “Any government will need to focus on ensuring that the public sector is and continues to be an exemplar client. This includes the role of the Infrastructure and Projects Authority and implementing the BIM Level 2 mandate.”
35) Support regional infrastructure plans
With combined authorities and metro mayors such as Manchester’s Andy Burnham now in play, any new government needs to take the next step and begin to take regional infrastructure investment seriously.
A study by the Confederation of British Industry in April found that £175bn could be added to the economy if regional infrastructure was improved.
Transport for London has the kind of economic heft that regional organisations promoting the Northern Powerhouse and Midlands Engine can only dream of. Chartered Institution of Highways & Transportation vice-president Matthew Lugg says: “Planning must address the delivery of transport infrastructure to meet the needs for development in the right place at the right time.”
To achieve Mr Lugg’s aim, the UK needs to consider changing the way it delivers and integrates new developments with the required supporting transport infrastructure.
CECA director of external affairs Marie-Claude Hemming adds: “An incoming government must commit to the delivery of world-class infrastructure outside of London and the South-east. Such a policy intention will attract business to new regions and help existing companies grow.”
Manchester Airport transformation flythrough screenshot Feb 2016
34) Act on aviation with a national strategy
The debate over whether Heathrow should have a third runway has rumbled on for longer than anyone cares to remember.
Successive governments stalled on the issue and occupied their time compiling report after report before David Cameron launched the Airports Commission headed up by Sir Howard Davies in 2012. The commission did bring attention and focus to the debate, but what the Heathrow furore revealed was that the UK as a whole still lacks a clear national aviation strategy.
A new government should draw up a national strategy that encompasses both demand, the wider economic impact of new routes and access, and the realistic ability to deliver on those promises (no Boris Islands this time please). With work ongoing at London City and Manchester airports, for example, the industry needs to hear how aviation joins up with long-term transport infrastructure planning.
In London the debate still rages. As CN reported last month, Gatwick Airport is now “shovel ready” for a new runway and claims it could begin work tomorrow if it was to get government support. All Gatwick – and other airports across the country – need is a government to look at this issue holistically on a cross-party basis.
Heathrow’s third runway project comes with an estimated price tag of £18bn, while Gatwick’s second runway could be half that at around £9bn. These costs are substantial, but present a big opportunity for the construction industry as well as the wider economy.
33) Back SMEs to build more homes
The number of SMEs working in the housebuilding sector is dire and arguably getting worse. The top 10 housebuilders account for the lion’s share of the sector, with CN reporting in March that SME activity in the market had dropped by 80 per cent since the 1980s.
With a revitalised housing association influence and development plans being drawn up nationwide, it is arguable that small firms could be squeezed from both sides of the market. If the housing sector is going to reverse this decline, it will need government help to do so. Incentives or grant conditions for HAs to take on smaller builders may be a start.
The Federation of Master Builders director of external affairs Sarah McMonagle says boosting SME influence in the sector is crucial: “Whichever party forms the next government, achieving their respective housebuilding objectives will require a revitalised SME housebuilding sector to expand and diversify the delivery of new homes.
“In England, this will mean implementing and expanding upon many of the key recommendations within the previous government’s housing white paper that were aimed at encouraging more small-scale development.”
Generic housing Baxi Bryant Homes Kintbury housing
32) Expand the Accelerated Construction Programme
In the housing white paper launched earlier this year, the government admitted that the housing market was “broken”.
One possible way of increasing the supply of new homes is the launch of the Accelerated Construction Programme for local authorities. A briefing paper calling for expressions of interest was launched in January, which aimed to address the barriers authorities face in undertaking development activity such as lack of experience, skills and resources to oversee developments in-house.
The paper indicated that the programme could deliver up to 15,000 housing starts on central and local surplus public sector land in this parliament through £1.7bn of investment. The next government should build on this positive start.
Cast Consultancy chief executive Mark Farmer says: “Direct government funding, partnering or covenant support such as the Accelerated Construction Programme will drive further investment in high-quality manufacture-led construction solutions, and bring in the new skills needed to deliver them and secure greater long-term housebuilding capacity.”
31) Provide match-funding for the Infrastructure Industry Innovation Platform (I3P)
The construction sector has historically been slower than others in maximising the opportunities arising from innovation; the formation of the Infrastructure Industry Innovation Platform (I3P) in October 2016 was a step in addressing this issue.
The next government can go one step further, and as a major client through the plethora of public sector contracts, it can help drive and potentially match-fund private sources to help provide a space for collaboration and co-investment and apply learning from world-leading organisations.
CECA director of external affairs Marie-Claude Hemming says: “As an innovation community that shares valuable ideas and opportunities across the infrastructure industry through a culture of collaboration, we believe that I3P must be supported by major clients [including public sector] in order to incentivise and drive real change across the industry.”
Construction News will publish further instalments of the top 50 priorities for the incoming government next week before polling day