An independent analysis of Britain’s building industry which claims the sector is in “inexorable decline” makes “worrying reading for anyone involved in the construction industry,” says Ray Theakston of Essential Living.
Adds Theakston, according to the Farmer Review of the UK Construction Labour Model1: Modernise or Die study, “needs to change drastically or risk becoming unfit for purpose,”.
Commissioned by the Construction Leadership Council in February, quantity surveyor Mark Farmer led the independent review of the UK’s construction labour model which has slammed the sectors “dysfunctional training model”, its “lack of innovation” and collaboration as well as its “non-existent research and development (R&D) culture”.
As a result of a lack of labour and rising costs, numerous housing projects have been put on hold due to the prohibitive costs associated with their construction, according to the research.
A 25-year veteran of the sector and former partner at EC Harris, Farmer, put together a report stating that the industry has to handle R&D and skills in a more joined-up manner with its clients. He also wants ministers to directly intervene in key places to guarantee many of the flaws identified are remedied.
“If you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality,” said Farmer.
In order to strengthen this sector of the economy, it is critical that investors, developers, and building owners who hire construction firms place more emphasis on adopting modern delivery methods and investing effectively in workforce development.
Manufacturing and building have more in common than most people realise, and this misconception needs to be dispelled, starting with the housing market.
A behavioural deterrent plan in the nature of a “carrier bag charge” is one recommendation for the medium term.
Purchasing construction work in a way that does not promote innovation or the development of skills would be subject to a tax, according to Farmer.
In order to avoid paying this tax, clients could commission construction in a more responsible manner, which would allow them to avoid paying the suggested levy of 0.5 percent of the scheme’s construction costs.
According to Farmer’s report, which was requested by the Department of Communities and Local Government as well as the Department of Business, Energy and Industrial Strategy,
Use of pre-manufactured building, such as off-site construction or modular housing, as a pilot programme in the residential development industry.
• A total overhaul of the current Construction Industry Training Board (CITB) and its related levy system, including a new mandate to appropriately support and drive forward both appropriate skills development and innovation to suit a modern progressive industry.
• The government should use education, budgetary, housing, and planning policy initiatives to stimulate change and create favourable conditions for the modernization of the building industry.
The construction industry’s workforce is dwindling as more individuals leave than join, putting increasing pressure on the industry’s ability to produce houses and infrastructure. Contractors have limited motivation to invest in long-term training for their workforce because of the reliance on a broken supply chain and self-employment.
Farmer said: “The construction industry is in dire need of change. What is evident to me following the nine months spent doing this evaluation is that keeping on as we are is just not an option. There is a pressing need for action in the construction industry given the rapid growth of digital technology and the tightening of the labour market. The building business lacks the impetus to undergo this transition; change must be sparked from outside the industry.
As long as the construction industry doesn’t discover some method to encourage innovation and make the work less labour intensive, the sector faces an inexorable decline in the coming years. So that the industry as a whole may think about how to best protect its long-term health, I’m hoping that this review will spark some discussion.
Industry minister Jesse Norman said: “This Government is determined to support more housebuilding, more quickly and in the places people want to live. Mark Farmer’s significant analysis of this crucial industry comes at a perfect time, given the establishment of the $3 billion Home Building Fund. It provides a strong argument for reform in the sector, highlights areas where it needs to improve, and puts out areas for action. We’ll think about what he has to say.”
Paul Stanworth, managing director of Legal & General Capital, said: “This review sets out a clear way for the construction sector to reinvent itself in order to meet the ever-growing demand for homes and infrastructure.
Our industry needs quick evolution, not just a ‘nice to have,’ given the persistent scarcity of homes in Britain. Legal & General has spotted this need and is assisting in its solution by investing in a new plant that will create homes using manufacturing procedures similar to those used to produce cars and other consumer products.
“This construction approach is safe, clean, and rapid, and it provides excellent consistency and longevity. We truly hope that Farmer’s assessment galvanises the whole sector to invest in innovation and guarantee its future.”
According to Laing O’Rourke Chief Executive Officer Ray O’Rourke, “Many of the findings and suggestions of the Farmer evaluation are welcome at Laing O’Rourke since we have invested extensively in innovation and continual development. Because of the substantial and systemic flaws raised by the study, we can no longer afford to overlook the UK housebuilding business or the wider construction industry.
“The introduction of new technology and sophisticated manufacturing processes offers great potential for radical transformation. Thus, the desperately needed quality housing stock in the UK will be delivered, and the acute skills gap that threatens our very future will be effectively addressed. Governments, developers, and service providers must pool their resources to achieve these common objectives and ensure the industry’s long-term viability.
“Farmer’s review makes it clear that the construction industry needs to invest in training and R&D to boost productivity and ensure we have adequate capacity to deliver the UK’s economic and social infrastructure,” said Mark Reynolds, chief executive officer of Mace. It emphasises the significance of bringing in cutting-edge expertise and equipment to the industry. We all need to embrace this spark for change to recruit a new breed of talent to reinvent our industry”.