Despite disappointing recent quarterly performance figures, the Government has finalised a construction sector deal to add billions to the economy while planning for a highly skilled and technically competent future workforce with links to the new T-level technical qualifications. Jon Herbert reports.

From the construction industry’s perspective, one key outcome of the Government’s new Industrial Strategy White Paper is a sector deal that ministers say should add billions of pounds worth of value to the future UK economy by improving the supply of housing and essential infrastructure.

The strategy itself launched in November 2017 is meant to boost productivity and earning power across the UK by focusing on “five foundations”: ideas, people, infrastructure, business environment and places.

Announcing the new “transformative deal”, Business Secretary, Greg Clark, said the deal should bring together the UK’s construction, manufacturing, energy and digital sectors in a hub connecting the new technologies needed to build cost-effective, energy-efficient and therefore low-carbon assets.

The proposed changes will also make it easier to not only recruit and train future generations of high-skilled construction workers, but also “deliver a substantial boost to the skills of current workers and help retrain workers”.

The Government is also keen to set the UK’s technical education system on a prestigious par with higher education; construction was recently listed in a national action plan as one of the first four sectors to benefit from T-level qualifications from 2020 onwards.

Many fear that the industry’s chronic shortages of skilled, experienced workers could be made worse by any post-Brexit departure of European workers, and dramatic fall in the future recruitment of non-UK staff and technicians, who currently form the backbone of many UK building sites.

In fact, a shortage of surveyors, bricklayers and other skills is holding back building work according to the Royal Institute of Chartered Surveyors; 62% of its respondent reporting recruitment problems during the third quarter of 2017.

The deal also aims to help companies improve performance by increasing the speed at which modern infrastructure is created, while reducing costs — primarily to taxpayers. This ties in with other recently unveiled Government ambitions to accelerated home and infrastructure provision.

Transforming fortunes

Mr Clark stressed that UK construction companies already add £138 billion annually to the national economy, account for around 8% of national GDP and currently employ more than 3.1 million workers.

He added that Government and industry have worked closely during the Industrial Strategy’s preparation to form the new deal. The two sides have also developed a joint strategic sector direction. This is meant to reflect shared modernisation ambitions and respond to the challenges posed by a growing UK population with changing living and employment patterns.

The Government is also to invest £170 million over three years into the Transforming Construction programme reforming procurement practices, matched by a £250 million commitment from the industry.

Skills

The deal’s strategic approach created within the wider Industrial Strategy philosophy, tagged as “building a Britain fit for the future”, highlights three skills and career strands. These are designed to improve and make well-paying jobs and professional development more attractive in a very different future building and construction sector. In turn, these are then the four basis: cost, time, climate change and export performance improvement metrics.

The focus on skills includes the following.

• A new emphasis on skills and technology will also see the Construction Industry Training Board reformed to promote greater industry leadership and engagement on how skills are developed for modern markets. There will be a strong focus on small and medium-sized enterprises (SMEs) which often claim to be shut out of wider opportunities by larger companies with more resources.
• The Apprenticeship Levy will play a greater role in the formation of “new apprenticeship trailblazers” while increasing the overall number of apprentices in construction.
• A more unified approach to promoting the prospects and rewards of construction careers across a broader non-traditional panel of young people will be linked to removing real and perceived employment barriers. The aim is to attract a more diverse workforce with enticing career prospects, plus higher professional, technical and management skill standards.

The Industrial Strategy also includes a new National Retraining Scheme with an initial investment of £64 million for digital and construction training. This will work in tandem with a new Construction Skills Strategy.

The skills themes above should then help to deliver four clearly defined objectives.

1. The first is a 33% cost reduction, not only in initial construction but also the whole life of assets.
2. The second is a 50% cut in the beginning-to-end time to build new and refurbish existing assets.
3. A 50% greenhouse emissions reduction from the built environment is also in line with the Government’s commitment to meet its legally binding CO₂ and climate change targets.
4. Finally, with Brexit in mind there is an ambition to close the trade gap between construction products and material exported and imported by 50%.

Digital British construction

A new Centre for Digital Built Britain based at Cambridge University will also be formed as part of the Transforming Construction Industrial Strategy Challenge Fund initiative. Part of its remit will be to develop Building Infrastructure Modelling (BIM), sensors, data analytics and smart systems technology that can be embedded in new building projects.

The centre, first mentioned in the 2016 budget, will be integral to the push for lower whole-life project costs and low-carbon emissions during the construction and operation of buildings.

At the same time, it should play a key part in improving flagging construction industry productivity and the greater uptake of BIM, sensing technology, secure data and information infrastructure.

Building for 2050

The Government also plans to invest £1.4 million in a research project called “Building for 2050”. Led by service provider AECOM, the project will gather contemporary and historic evidence from three schemes in Swansea, Bristol and Manchester to uncover barriers to low-cost, low-carbon housing.

Building for 2050 will test innovative construction methods, working closely with households throughout the project to track and record their views and progress en route to reducing the overall environmental impacts of UK homes by 2050.

Industry welcomes

Andrew Wolstenholme, Chair of the Construction Leadership Council, was one of the first to highlight the deal’s benefits. Saying that he was delighted that construction has been included in the first wave of sector deals, he added that it was a huge opportunity for one of the UK’s largest industries and the broader economy.

“With a projected £600 billion pipeline of infrastructure projects to be delivered over the coming decades, it is vital that the industry and Government work together to realise the full potential of the deal,” he said.

He continued, “We have a golden opportunity to reap economic gains from improved productivity and the more efficient construction of assets, creating high-skilled, well-paid jobs in all parts of the UK and driving up exports to the global infrastructure market.”

Tony Meggs, Chief Executive of the Infrastructure and Projects Authority (IPA), also welcomed the agreement, adding that, “This Government has ambitious plans for infrastructure over the next decade. It is vital that the construction sector is modern and efficient in the way it delivers these plans. Only then will we see future investment continue to flow and make progress in closing the UK’s productivity gap.

“The IPA very much supports this Construction Sector Deal; we will support and align with industry as it implements the programme,” he said.

Meanwhile, despite being a strong industrial and economic performer over many years, construction is still not sharing the up-tick experience by other areas of the economy such as manufacturing. Performance in the three months up to November 2017 was 5.4% lower than in the previous three months.

Published by Croneri on 23 January 2018