Sarah Wilson, partner at Watson Burton LLP looks at what’s next for the Government’s Construction 2025 industrial strategy
Initiatives such as Funding for Lending and Help to Buy sparked huge headlines when they launched a few years ago and have continued to build momentum ever since. Announced in 2012 and 2013 respectively, industry has since called on the Government to take action and formalise plans for growth within the sector.
An industrial strategy document entitled Construction 2025 saw the Government respond when it came together with industry leaders in a pledge to transform the sector over the next decade. Now, nearly eighteen months down the road, how has the strategy been implemented and what’s left to do?
Released in July 2013, the 76 page Construction 2025 document was ambitious in its objectives with sustainability, efficiency and plans for international growth high on the list of ten key commitments. Designed to strengthen the dialogue between government and industry, some of the key objectives outlined in the initial document were as follows: • Lower costs – 33% reduction in the initial cost of construction and the whole life costs of built assets • Faster delivery times – 50% reduction in the overall time, from inception to completion, for new build and refurbished assets • Reducing emissions – 50% reduction in greenhouse gas emissions in the built environment
• Improving exports – 50% reduction in the trade gap between total exports and total imports for construction products and materials
Since its launch, the strategy has ramped up relatively quickly, with the formation of the Construction Leadership Council (CLC) a very promising step forward. Consisting of Network Rail co-chair Sir David Higgins, Vince Cable MP, Steve Hindley of the CBI Construction Council and Anna Stewart, group chief executive at Laing O’Rourke, to name a few, the CLC has the chance to exploit existing opportunities in the sector – and react to new ones. Its members are driving the strategy forward in five key areas; people, leadership, being smart, sustainability and of course, growth.
One area that the Council has placed particular focus on is the issue of payment practices. Discussions around the topic culminated in ‘The Fair Payment Charter’ which launched earlier this year. Consisting of 11 key commitments, the Charter looks to undertake measures that include making payments electronically and not delaying payment, as well as reducing payment terms to 30 days by January 2018.
By and large the initiative has been welcomed by the Council and has been adopted by nine of its representative firms as they look to ‘practice what they preach.’ Whether the Charter will be taken on board by the wider industry remains to be seen – businesses are currently asked to follow the process internally rather than having to make a contractual commitment.
Payment practices are an instrumental part of the equation in the Council’s mission to increase efficiency within the industry and drive down costs. Tapping into technology will also be key to achieving this, with the strategy pointing to Building Information Modelling (BIM) as a means of driving projects forward better.
Reducing gas emissions will also help drive efficiency. Sustainability and low carbon design has improved immensely in recent years but it needs to spread further into practices and processes undertaken across the wider industry. The Government’s improved commitment to investing in the energy sector will help with this over the coming years as the UK’s energy strategy develops further.
One of the main challenges set by Construction 2025 is to shake up the image of the industry in a bid to eradicate the existing skills gap. At the heart of this is a focus on an investment in skills, training and resources if we are to create and nurture a more diverse work force.
There are already a number of initiatives on their way to help with this – the set-up of a HS2 college due to launch in 2017 and the first national UK Onshore Oil & Gas College announced this November are two particularly encouraging projects. Add to this the news that training and skills body CITB has pledged to increase investments over the next two years to help fund more training grants, while local Councils are also doing their bit as they develop long-term relationships with business leaders in an attempt to seek out opportunities that will help employees to develop new skills.
As with any long-term plan, time is a key indicator and the next two years will be crucial in determining the success or failure of Construction 2025. With the general election now a matter of months away, there is no doubt that the industry will continue to keep the pressure up as we wait to hear more on the some of the major developments that may impact the sector.
While measuring success will be something of a slow burner, it is key that the industry doesn’t rest on its laurels in monitoring the progress of the vision. A lot of this relies on a constant willingness from businesses to lead by example and get on board. If the industry continues to welcome plans for growth and sustainability with open arms, the UK construction sector will be well placed to take advantage of opportunities moving forward.