We know that our delivery process is fragmented with hierarchical appointments of consultants and contractors. As a result, out-turn costs are 50 per cent higher than the initial bid.
Ten years ago Sir John Egan recommended a seamless delivery process with integrated teams at the helm. The Government set up the Strategic Forum for Construction in 2001 which agreed on measures to up the pace of collaboration and integration.
These were incorporated in Accelerating Change launched by Sir John Egan in 2002. The target was for 50 per cent of construction projects (by value) to be undertaken by integrated teams by the end of 2007.
Has the target been achieved? No. A 2004 survey by Constructing Excellence indicated that at least 13 per cent of projects were integrated. But 2007’s close, we had no improved that figure. In the meantime the National Audit Office tells us that our way of working is wasting the public sector £82.67 per second!
Integration starts at project inception. Where is the dialogue between consultants, project managers, constructors and even facilities managers that will lead to ownership by the whole team of design solutions, cost plans and decisions on risk? Going out to tender - as we often do - on an existing design is not integration.
Where do we go from here?
The Strategic Forum has agreed new targets, but these could well deliver the same lack of progress. There is a way forward.
The public sector is responsible for almost 40 per cent of construction spend. We have the Gateway Review process which is promoted by the Office of Government Commerce. This considers the evolution of projects at key decision points in their life cycle.
At each point procurers go through a checklist to ensure that the project can progress. Gateway 3 is the most significant because that is where the investment decision is made for it to go ahead.
If, at this stage, there isn’t the commitment to use an integrated team to deliver the project, funding should not be made available. The Housing Corporation already does it in order to encourage housing associations to embrace partnering.
But there are voices saying you can’t stop a hospital being built because there isn’t an integrated team. Stop wasting £82.67 per second and you can have five more district hospitals a year.
Financial levers are always effective drivers for change. Let’s hope that the Treasury will give this serious consideration.
Professor Rudi Klein is chief executive of the Specialist Engineering Contractors’ Group