The government must increase the amount of research and development money it gives to UK construction firms if it is to improve innovation on major projects, the man leading Balfour Beatty and Vinci’s High Speed 2 bid has said.
Managing director for the Balfour Beatty / Vinci HS2 team Peter Anderson called on the government to restore construction-specific R&D funding to ensure the UK supply chain can deliver the country’s major projects pipeline as efficiently as possible.
Mr Anderson told Construction News: “Necessity is the mother of invention. With the long list of major projects coming up, the government needs to take investment [in construction R&D) back to pre-crash levels.”
He added that main contractors also needed to return R&D spending to pre-recession levels as the infrastructure market stabilises with more major projects moving towards delivery stage.
The MD made his comments ahead of the publication of a report from Balfour Beatty / Vinci HS2 exploring how the UK can better embrace innovation to deliver major projects.
Mr Anderson said the report was a “call to arms for greater innovation” in the UK construction sector, with the firm keen to “start the conversation” over how best to boost innovation in project delivery.
“I don’t think we are far behind the rest of the world,” Mr Anderson said. “But as an industry we need to continue to modernise construction techniques and approaches.”
The report from the contracting joint venture, which is shortlisted for four lots of HS2’s £11.8bn civils work packages, said there had been a decline in public R&D spending in construction over the past two decades.
The report says this fell further in 2003 when the then science minister Lord Sainsbury scrapped a £23m construction-specific R&D fund for a more centralised government fund in which construction would compete with other sectors for this funding.
The move made the UK the only advanced economy in the world that didn’t have a dedicated construction R&D fund.
Mr Anderson said the removal of this fund combined with the recession had reduced the amount of money available for firms throughout the supply chain to spend on R&D and innovation.
According to the Building Research Establishment, the UK spends just £43m on construction R&D, lagging well behind countries such as France (£203m) and Japan (£750m).
Mr Anderson said that while he understood a post-recession UK could not match the levels of investment in Japan and France, a return to the funding near pre-crash levels would facilitate greater innovation in the sector.
The report is the second to be produced by Balfour Beatty calling for government action in the sector within three months.
In July, the UK’s largest contractor published its Infrastructure 2050 report, which said the government should make the most of current low interest rates and borrow more to fund major infrastructure projects.
Alongside the call for greater direct government funding, today’s report says adopting the French model, where the government encourages innovation in construction through tax incentives, could be another way of ensuring more money is invested into construction R&D.
Other recommendations include allowing time for longer planning cycles, the replacement of month-to-month payments with payments based on the successful completion of project milestones, and greater rewards for contractors who come up with innovative solutions after contracts have been signed.
It also called for clients to give contractors more chance to innovate by moving away from overly-detailed project specifications, and the removal of cost incentives that encourage “low-risk behaviours” from contractors.
The Balfour Beatty / Vinci JV is currently bidding for all three of HS2’s £900m enabling works packages and four of the seven multi-billion-pound phase one civils packages.
Question marks have been raised over the £55.7bn project following a damning report by the public accounts committee and the news that chief executive Simon Kirby would be leaving the project to join Rolls-Royce.
But the transport secretary reiterated his backing for the scheme at the Conservative Party Conference this week and Mr Anderson said that despite these recent events, he was still confident the government remained committed to the project.
He said: “As an experienced contractor, we are used to the politics changing around major projects like HS2, but it seems there is a commitment from the government.
“Chris Grayling is in support, and the fact that a minister has been appointed specifically to look after HS2 shows this commitment.”