Laing O’Rourke boss calls for incentives for success as his Europe CEO warns that government inaction will lead to job losses and contractors looking overseas.
Ray O’Rourke has called for a more collaborative approach to UK procurement - including rewards for a contractor’s good performance - so the industry can move away from a culture of “pointing the finger of blame”.
Speaking at the Government Construction Summit this afternoon, the Laing O’Rourke chairman and chief executive said his firm had transferred 500 people to Australia and 100 to Canada in the past two years.
Mr O’Rourke also said the industry needed to move towards 35-hour working weeks to attract younger people to the industry.
Speaking on the state of UK construction, he said: “We need to incentivise for success rather than covering each other’s backs and pointing the finger of blame in an adversarial way.”
He added: “The current practice of prolonged competitive dialogue reduces innovation potential; contractors are incentivised to avoid penalties and not improve service outcomes.
“Future procurement needs to be a more collaborative model like the one used on Heathrow Terminal 5 and the Olympics, where you get promoters, deliverers and designers working together.”
He added that Laing O’Rourke would not need project bank accounts as it paid suppliers within 21 days - something he acknowledged as crucial to the success of trade contractors.
“I dont think we have enough capable people working in the (UK) industry at the moment,” added Mr O’Rourke.
“The industry is not an attractive place to be. We have to look at the German model and move to 35-hour weeks because at the moment things are not sustainable.”
Mr O’Rourke said working in Australia and Canada things were not “a lot better”, but they got projects to financial close sooner.
Hours earlier, Roger Robinson - chief executive officer of Laing O’Rourke’s European operations - spoke of the potential impact of government delays on decisions such as PFI, which is still subject to a call for evidence that launched at the end of last year.
Mr Robinson said it is time to “see some action” or companies like Laing O’Rourke will be forced to make cuts “and that means job losses in the UK”.
“There are places in the world that do appreciate our skills and that’s where we have to go,” he warned.
Mr Robinson said PFI - or some form of it - is “surely the answer” but that a model had been too long coming. He argued that the risk transfer on 25-year schemes had provided excellent value to the taxpayer.