In my talks I emphasise that the government and other forward-looking client businesses are demanding wider changes to how the industry works. The January 2018 collapse of Carillion is just one sign of a deeper malaise within the UK construction sector – and a succession of government and industry-driven reports (McKinsey’s 2017 Productivity report is just one) are highlighting that the sector must, to reuse the title of Mark Farmer’s October 2016 report, “Modernise or Die”. Short-term adversarial business models are being rejected in favour of longer-term business relationships founded on collaborative processes and behaviours; government is shifting from lowest price tendering to demanding best whole life value; and, rather than seeking bespoke project solutions, industry clients are looking at greater standardisation and increased use of offsite manufacturing techniques.
My recent Specifi presentations included extracts from successive government construction industry strategies (2011, 2016), and from “Construction 2025” which set stretch targets to lower project costs, shorten programmes, improve carbon performance, and improve the competitiveness of the UK industry currently known as construction. And recent budget statements have committed to supporting these strategies.
In Manchester, I was asked which document should be required reading. I said the potentially most important document had yet to be published: the Construction Sector Deal.
‘The current construction business model is not sustainable’
Within 24 hours, on 5 July, this had been published by the government (and I happily updated my presentation for the 17 July event to reflect its key themes). It bluntly warns “the current business model of the construction sector is not sustainable,” and stresses three strategic areas for change:
And within days, two further notable documents appeared. First, the House of Lords science and technology select committee published a report recommending wider adoption of offsite manufacture for construction. Second, the Construction Leadership Council published its “Procuring for Value” report, advocating procurement based on delivery of best whole-life value and performance, with a strong focus on measuring and rewarding good asset and supplier performance.
It will take time for these and related initiatives (eg: Digital Built Britain, Project 13) to bear fruit, and there undoubtedly will be some inertia and resistance to change. But some of the UK construction industry’s largest customers are increasingly looking for suppliers who can work digitally.
I quote Internet founder Tim Berners-Lee’s remark “if the past was document sharing, the future is data sharing”. As an industry we have to move beyond document and file-based thinking and make data the new normal. It will not just be about digital thinking but about rethinking construction as a whole.
