Paul Morrell, the government’s chief construction adviser, gave the eighth annual JCT Povey lecture to an invited audience on 18th November. This is an edited and shortened version of his full speech.
Whatever our current predicament, and however long the recovery might take, it will still be short by comparison with the life cycle of a building. The core of our ambition should therefore be a determination to resist the temptation to solve our problems by thinking only in the short term – thereby giving us a bigger problem later on.
Ambition is not new. Indeed, the subject matter of my distinguished predecessors in delivering the JCT Povey lecture can be characterised by ambition:
- Richard Saxon (2003) called for a better understanding of the total impact of the built environment upon the economy and our daily lives;
- Roger Flanagan (2004) talked about risk and navigating the industry and its projects more securely;
- Peter Brandon (2005) pressed for the more intelligent use of IT in design, procurement and construction management;
- James Wates (2006) looked forward to the reorganisation of the industry into an integrated proposition;
- Bob White (2007) looked at innovation as a key instrument in the industry change agenda;
- Nick Raynsford (2008) looked at industry fragmentation, and the complications this causes in its relationship with Government – itself fragmented and hardly less diverse than the industry;
- Francis Salway (2009) made a plea for sustainability to be put at the core of the industry‟s activities.
But if there is consensus (as seven years of these lectures would suggest), then why isn’t it happening? What do we need more of, and what do we need less of, and what are the long term virtues that are under threat as we concentrate more on the “less” than on the “more”?
Top of my list is whole life value. Yet, over my career, when things got really tight, I found it almost always came down to cost over value. There are some perfectly human reasons for this. Firstly, capital cost is simple: we can all understand the pound in our pocket. The unit of whole life value, however, is output (or benefit) over cost over time, and the human brain simply isn’t wired to cope with the additional variables. It requires more data, and judgment, and a long-sightedness that frequently goes unrewarded in business.
How much better it would be if project teams themselves converted their thinking to whole life value, and presented options to clients in those terms. This would, of course, mean that they would first need to have an absolute understanding of how a new construction project would deliver value into the client’s operations, and this would make far greater demands of the briefing process than is the current norm.
There is currently much talk of inter-generational equity. The concept, usually associated with sustainability, has been extended to cover the problem of debt, so that future generations should not see the fruits of their own efforts diverted to repay the consumption of previous generations.
There would, however, be no greater equity in passing off to future generations buildings which are so ill-conceived, or so badly designed or constructed, that they will be expensive to maintain and run, or ineffective in delivering the purpose for which they are intended. This is simply to hand down debt in a new form.
Whole life value therefore takes on an even sharper significance in times such as these; but it is fundamentally for the supply side to come up with the arguments and tools to demonstrate that value to clients – and to desist from cynical offerings that trade turnover (for them) today, but trouble (for their clients) tomorrow.
The second factor that comes under attack when money is tight is an appreciation of the value of good design. I would say that part of the very definition of “good design” is that it produces value, and that design that celebrates little apart from itself is bad design.
Over the long boom of the last fifteen years or so, there has been a growing interest in architecture, and that is to be welcomed: there have been times in the past when we haven’t been paying attention, and we are living with the consequences.
There is no denying, however, that architecture has been as susceptible to “irrational exuberance” as have the financial markets. For private patrons, this is nobody’s business but their own, and I hope there will always be room for patronage in the public sector as well.
The message that has become clearer since I have been working in Government, however, is that, in the delivery of public services, there is a value in quantity. Getting to grips with this, and recognising its legitimacy, is counter-intuitive for somebody who has spent his career arguing for quality over quantity. But it is clear that there are levels of cost which, however fine the resulting product, are not justified in terms of functionality, durability or impact.
Just as it has been desperately important to fight against the temptation of the lowest capital cost, by setting minimum standards, so I think it is time to acknowledge that there should, in the public estate at least, be maximum standards as well.
Between the two there is still a wide range of options, in a band of what I have called “good, and good enough”. The term attracts suspicion, because the word “enough” suggests a dumbing down. It is not, however, intended to do so. The starting point is that buildings have to be good – which means that they need to meet the principles of good design, defined by CABE as “fit for purpose, sustainable, efficient, coherent, flexible, responsive to context, good looking, and a clear expression of the requirements of the brief”.
Beyond that, every feature that adds cost needs to be tested against its contribution to a rigorous measure of value. This could, and should, become a real skill: genuine value engineering instead of the discredited cost-cutting it has too often become, and rooting out costs that make an inadequate contribution to use, life, appearance or any other quality that is properly valued by public sector clients.
I need to say more about sustainability – not least because the first reaction to any speech or article that doesn’t mention it is “You didn’t even mention sustainability”. The fact is that we need to accept sustainability as an absolutely intrinsic part of the definition of good design.
Here too, it is for the industry, rather than its customers, to lead, and the leading edge also needs to go to places it has traditionally passed by. What has been under-appreciated is the enormous challenge facing us in retrofitting the existing building stock to achieve higher levels of energy efficiency. Without doing so, we have no prospect at all of meeting our carbon reduction commitment – which is now a matter of law.
Indeed, that commitment, which requires us to reduce emissions by 80% by 2050, poses questions to which we currently have no answer. However, the industry has been good at coming up with solutions to new problems where it is confident that a market will exist.
The overwhelming issue in respect of driving improved energy efficiency and other measurable aspects of sustainability is therefore the creation of customer demand. For this, most of the levers rest with Government and the regulators, but the challenge for the industry is to encourage politicians and regulators to believe that if those levers were applied, then the industry would have a skilled and trustworthy supply chain ready to deliver accredited products and services.
The BIS Industry/Government Innovation and Growth Team which has been commissioned to look into the construction industry’s place in a low carbon economy will have a lot to say about this when it reports at the end of this month [the report is launched on Nov 29th].
The third thing that a client could usefully know is how much they should then be paying for that building which is “good, and good enough”. This brings me to my third priority, which is benchmarking. Like post-occupancy valuation and energy audits and so forth, this cost arises after the project is finished, when many of those involved have already moved on, and when the budget has probably been exhausted.
Benchmarking is expensive too. In my previous life, whenever I chased up detailed cost analyses of previous projects, the almost invariable response of the surveyor was that the job wasn’t typical, and that therefore there was no real value in gathering the data. This happens to be true, and data collection is also costly. I would say, however, that the failure to benchmark, and to find out just how much a project should cost, has resulted in un-necessary expense of hundreds of millions of pounds.
When this information is first gathered together, it will tend to show that the most expensive project will cost two or three times as much as the lowest – and this is not reflected in a building that is two or three times as good. Instead, it is almost certain that some of that expense will have destroyed value, making insufficient contribution to use, life or customer benefit.
The price of this, for the schools programme for example, is paid in being able to build fewer schools. But our ambition should be the opposite of that: to educate the greatest number in buildings that are good enough for the purpose – in buildings which an architect friend calls “the best of the ordinary”.
Benchmarking also has an important part to play as decisions get devolved to the local level. This calls for transparency, and the most obvious measure of what can be achieved in one local authority is what has been achieved in others. This therefore has to be a priority not just for me, but for all government departments with a significant construction programme.
So, with those three hurdles leapt, the client will be equipped with the knowledge that I would say is essential to get the best from the industry: knowing what to ask for, how to ask for it, and how much to pay.
The first duty of the supply side is to help the client put himself in that position, and to take no advantage in the meantime. I would hope, however, that the industry will have ambitions beyond that: ambitions for a future in which it can deliver a better product at better value.
This calls for reform – but reform is one of those things that we are going to get to later. It gets crowded out by the pressures of everyday business, and none of those pressures relent, even when the workload recedes. Progressive employment practices, including diversity of the workforce; skills and training; health and safety; the management of suppliers – there is almost no end to the number of things that need to be got right. These are, however, matters of hygiene – the price of admission to business, rather than the business itself.
So, as we adjust to a lower workload, can we not both see the need and find the time for reform? We do not need to look far to know what has to be done. The successive reports of Sir Michael Latham, Sir John Egan and Andrew Wolstenholme have plotted a clear enough path, looking at process, product and behaviours; and the eight JCT Povey lecturers who have preceded me have trodden much the same path.
But now I’d like to pick out two particular elements of reform that it is time to adopt or abandon.
The first is the integration of the supply chain. Books have been written about this, and we have all the reports, tool kits, maturity matrices etc that we could ever need. So if integration makes such powerful good sense, then why doesn’t the industry just do it?
For all its bad press, PFI has shown us that there is a better model. It is possible to find architects who have actually enjoyed the experience of working hand in hand with contractors, and are prepared to say so; and contractors who have started to understand how to work with designers so as to release real client value.
The second transformation that I want to see is a gradual move to the routine adoption of the full potential of Building Information Modelling. Most of us would concede, that the construction industry is way behind others in the innovative application of IT. We therefore make our mistakes on site, rather than in a computer model, and at exponentially higher cost; and we increase the chances of those mistakes by working with uncoordinated information issued to different parties at different times.
The potential for turning this around, so that we build things in the computer before attempting it on site, and do so from a set of coordinated information that all parties can access on a common platform, is enormous – but so are the barriers. In a world in which some smaller suppliers and subcontractors don’t even have an internet connection, it is impractical to mandate a system that demands that everybody works with digital information.
And yet we might as well regard information that isn’t digital as lost, because sooner or later it will be. So the Government is looking at a phased programme which gets us from the status quo to a position where all are comfortable in a virtual world. The trick will be to recognise that this is fundamentally about process rather than software, and to avoid the trap of spending the rest of our lives trying to find a utopia of interoperability.
BIM is, of course, a tool, rather than a credo, but, like good design, it is nonetheless a powerful enabler of many of the things that we want to happen. Experience in America has shown that it has the potential to eliminate waste, and thereby reduce cost and increase profit, and it certainly opens the door to greater use of offsite fabrication. Fundamentally, though, it is an instrument of integration, and these two ambitions therefore walk hand in hand.
All of this will call for leadership. Now, I have taken a bit of flak for saying that the industry needs leadership. The industry is full of leaders, I am assured – and so it is. But an industry that is full of leaders is not the same thing as an industry that is led. From somewhere we need a cadre of individuals who will work together to provide and promote a plan for their (our) future – and an ambitious plan at that.
It would be the final misery of these tough times if we emerge from them with nothing more than a divided, introverted industry, preoccupied with its own predicament rather than that of its clients; turning out a generation of nastier, cheaper buildings; cobbled together from an analogue anarchy of uncoordinated documentation.
My expectation is that this cadre is more likely to come from the leaders of key businesses across the breadth of the supply chain than from within the institutions and associations that represent them. But, wherever they come from, and however they come together, we need that plan.
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