2018 sees the industry at a quality crossroads
With findings due from the Grenfell fire inquiry, the CIOB quality commission, and a parliamentary review of housing – the year ahead could be a watershed for construction, says Chris Blythe.
The recent announcement of a construction sector deal as part of the industrial strategy is positive news for the industry in a year which has been a series of contradictions by any standards.
How realistic the government promise to consider whole-life costs and best value in its procurement is yet to be seen. The industry has been pushing the message for 25 years or more.
It has been shown time and time again that the initial build cost is a tiny, tiny proportion of the whole-life cost of projects. With some major infrastructure schemes, the actual construction work is a small part of the whole initial project costs. The initial estimates for the third runway at Heathrow had a construction cost of about £3bn out of a total £18bn.
There lies the nub of the issue. That so much gets spent on “due process” probably explains why the Chinese can lay 1,000km of high-speed rail in a year where it will take us 20 years to do 200km.
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Governments talk about improving productivity, but they could start by getting to grip with the processes that make what they do so expensive and time consuming. The real risk is that infrastructure becomes obsolete by the time it is commissioned, or that by trying to contain costs, daft compromises are made.
Seriously, who goes from London to Leeds via Birmingham or wants to stop at stations nowhere near the cities they are supposed to be going to?
But the contradictions we have are telling. Recent Home Builders Federation research shows how dependent its industry is on migrant labour. According to the HBF, over 50% of housing construction workers in the capital are not from the UK.
Mind you, much of the housing output in London is destined to go to people not from the UK either, so if there are restrictions on migrant workers it is likely to damage housebuilders’ profits rather than slow the housing of Londoners in London.
The alternative narrative to this is that the housebuilding sector would rather bank its profits than invest in a sustainable industry. Its own research reveals that most of the younger workers are from outside the UK – yet still it pleads for special treatment post-Brexit.
So, what does 2018 hold? The flurry of work following Grenfell will start to have outcomes. In the immediate new year, we should see the report of the preliminary review into the building regulations. That will be followed by more work on fire safety.
In the spring the CIOB’s Presidents’ Commission on Quality will begin presenting its findings. The All-Party Parliamentary Group for Excellence in the Built Environment will be getting to grips with poor quality in housebuilding, as well as consulting on a proposed new homes ombudsman. Finally, we could see the start of the end for leasehold.
2018 will be a watershed. For those that care about the industry it could be a cause for optimism; for the mean and the greedy it’s time to get out. Let’s hope for a happy and generous new year.
Chris Blythe is chief executive of the CIOB