BRE privatisation will be a disaster for long-term research unless the industry backs a new National Centre for Construction, argues Graham Watts
WHEN the government decided that it wanted to transfer ownership of the Building Research Establishment (BRE) from the public to the private sector, many in the industry were worried.
Research and development is a key issue for construction. Yet here was a measure that could, some feared, reduce the industrys capacity and know- how in that very area.
In response to these fears, the Construction Industry Council, the umbrella body for constructions professional bodies, agreed to act as the champion to facilitate the development of a National Centre for Construction (NCC).
The idea was to create the premier European construction research institution providing multi-disciplinary research and transfer services and promoting innovation to the construction industry and its clients.
Many in the industry believe that creating an organisation like the NCC to succeed the BRE could both meet the governments desire to transfer ownership of the BRE to the private sector and at the same time satisfy the constructions desire for an holistic national research centre working on a non-profit distributing basis.
But how did this threat to the existing BRE come about, and why?
The governments desire to get the best value for money in publicly-funded research led to it setting up an efficiency unit scrutiny of public sector research establishments, which reported in July 1994.
The concept of setting up a National Centre for Construction first emerged from the CICs response to the scrutiny. It was further developed in the councils evidence to the Science and Technology Committees in both Houses of Parliament later in 1994 and through CRISP, the Construction Research and Innovation Strategy Panel, set up jointly with the main contractors group, the Construction Industry Employers Council, and the subbies umbrella body, the Constructors Liaison Group.
The government did not respond to the scrutiny until September 1995. It reiterated the need to examine the options for transferring public sector research establishments into the private sector.
In November, environment secretary John Gummer told the House of Commons he was commissioning external consultants to advise on the options for transferring BRE to the private sector.
Since then, the external consultant, PA Consulting, has been busy. In just a few weeks spanning the turn of the year it obtained 120 written submissions from the industry and conducted around 20 face-to-face interviews with key bodies.
Its report will now be with DoE Ministers and we expect it to say that there was overwhelming support from industry for the concept of establishing a non-profit distributing National Centre for Construction.
However, we also expect this to be tempered by a degree of scepticism. The industry may have done a good job in mobilising support for the NCC. But, given the popular perception of the construction sectors fragmentation, will it be able to turn the concept into a viable proposition? As the original author of the NCC idea, the CIC remains keen to turn it into a reality but we recognise that we can only do so with a wide alliance of industry support.
This means active collaboration with all varieties of contracting and manufacturing bodies represented in CIEC, CLG and the new Alliance of Construction Product Suppliers, plus the client community through the Construction Clients Forum.
All of these bodies belong to CRISP, and we were therefore delighted when CRISP gave CIC a mandate to take the lead in developing the NCC. It is important to stress that our vision for the National Centre does not mean simply creating a son of BRE. To begin with, the National Centre must be truly market-orientated, as distinct from the present BRE, which effectively serves a monopoly client.
This change in culture needs to be established alongside a centre which is independent, impartial and authoritative.
The centre will need to complement the existing research infrastructure and retain and develop the specialist research facilities, which would each be vulnerable in a profit-led organisation.
The guarantee of independence and authority to be provided by the National Centre is essential to the further development of a world-class role as an impartial adjudicator on technical matters, in benchmarking, through third-party validation and in the reliability of technology transfer.
Here there will need to be a firm emphasis on the needs of small and medium-sized firms with the aim of raising the performance of construction.
There are many other options for privatising BRE and each will be considered by ministers.
A straightforward trade sale might raise short-term cash for the Treasury. But will the buyer be interested in a long-term research service or simply the value of the assets that go with the sale? Some of BREs activities are unique. It is a monopoly supplier to a monopoly client and the market could be lucrative in the short-term.
But would a trade buyer plough these profits back into non-profitable areas of long-term research in the national interest, or would it take the money and run?
Who will set the agenda: society or the shareholders? If you think of past experiences of privatisation it wont take too much grey matter to work out that creating the National Centre is best way forward for construction, its clients and society.
We believe the industry has won the argument for a national centre. Now we need to show the Treasury and others that we can demonstrate a real commitment, by turning the concept into reality.
Graham Watts is chief executive of the Construction Industry Council.
Individuals and firms willing to support the creation of a National Centre for Construction should contact Graham Watts, Julien Parrott or Martin Lockwood at the CIC, 26 Store Street, London WC1E 7BT (tel: 0171 637 8692).
We believe the industry has won the argument for a national centre. Now we need to show we can turn the concept into reality