Happy New Year to all our readers, and we sincerely hope that 2011 brings better times than many of you will have experienced in the past couple of years. We’re all crossing fingers that the public spending hiatus gives way to a new consensus on delivering private-public hybrid projects; that private sector clients and home-owners decide their money is better invested in bricks and mortar than in low-yielding investments; and that increasing public awareness of the sustainability agenda gets the Green Deal off to a promising start.
Of course, whatever else 2011 brings, we’ll also see a continuation of many emerging trends of 2010, including the ongoing search for “more for less”. Expect to see more interest in BIM, off-site construction and new forms of design/build collaboration as clients and the industry feel their way towards more efficient project outcomes. Of course, in 2011 we’ll also see the search for affordable, measurable carbon cuts drive us slowly closer to our low-carbon future.
But if we look a decade rather than a year ahead, to a more efficient industry that’s also delivering on the vital green agenda, this will rely heavily on the people we’re training now. And on this issue, it’s interesting to read the range of opinions expressed in this edition of CM.
First, Chris Blythe picks up on the impact of higher tuition fees for the next generation of construction students. Our columnist Professor Linda Clarke questions the orthodoxy that employer-based apprenticeships are the solution to trade skills training, pointing out that most countries on the Continent have adopted a more knowledge-based approach. Our news story on the Green Deal (page 4) highlights concern that the UK’s skills infrastructure is simply too fragmented to train and qualify the multi-skilled individuals it needs. And finally, there’s a letter from BAC Construction, a Wiltshire SME that’s too small to take on an apprentice efficiently, but not too small to end up paying a substantial CITB levy that doesn’t deliver a worthwhile return.
Sometimes, the list of topics the industry is being urged to tackle seems almost too long. In this issue alone, we touch on better time management; better diversity policies; better procurement solutions for clients; better low-carbon buildings. And CM only has to write about these issues – it’s up to you to deliver.
So, at the beginning of a new year, is there really the will and the appetite to transform construction training? Clearly, it’s a massive task, and not one that will respond to quick wins.
But amongst all the other issues, the future training framework does deserve its place, because it is fundamentally linked to everything we do, and aspire to do. Current provision may have served us well enough so far, but as New Year reminds us, the world is turning fast, and standing still means getting left behind. We await government plans for CITB-ConstructionSkills with interest, but may need to go further in re-thinking training.
Elaine Knutt, editor
Feedback
Fragmented professional structure is holding us back
John Bale PPCIOB, Emeritus Professor, Leeds Metropolitan University
CM’s November/December issue rightly showcased this year’s Construction Manager of the Year Awards. Every year the awards ceremony is a joyous occasion, but more important, a reminder of the difference made to the construction industry by highly skilled construction managers, employed by contractors committed to professionalism. And yet, sadly, if you ask an average member of the public to name the professionals who deliver excellence in construction, they will mention only a handful of professional job titles of the brass-plate variety! We have to change that perception.
Later in the same issue, we find the real reason we have to change things. The Europe feature highlights the performance gap between the UK and some other European construction industries. International cost comparisons are fraught with difficulty, but the evidence is strong, and has been for many years, that it costs more to build in the UK than in many other advanced economies. The fault doesn’t lie with our construction managers. And it certainly doesn’t lie in the profits of construction companies – earning net margins of around 2% for taking real risks.
I’m convinced that the reasons for the UK’s cost disadvantage lie in our excessively fragmented professional structure and, flowing from that, in approaches to procurement that see the construction firm as a passive provider of resources (for a minimum price) rather than as an industrialist able to deliver better products for less money, through innovation in design and production, and the motivation of a highly skilled workforce.
The integration of design and production is central to the changes that need to take place. Good design is vitally important, but the expression of good design must be in fitness for purpose, buildability and affordability, as well as in aesthetic merit. As the chief construction adviser Paul Morrell said recently: “Design that celebrates little apart from itself is bad design”.
I don’t want CIOB to be confrontational in its relations with other professional bodies. I believe, however, that we need to proclaim from the rooftops that the role of the professional construction manager is vital in delivering the “more, better and different for less” demanded by the economic climate.
Equality is a bigger picture
Chrissi McCarthy MCIOB, Constructing Equality
In response to Gerald Brown’s letter in the November/December issue, I would like to say that the new Equality Act 2010 is designed to make things simpler for employers as it combines the existing legislation and aims to make life easier for everyone.
I feel, as do many others, that the industry should improve diversity not only because of public perception, but also to get to where it wants to go. Diversity is good for business – that’s all. Please feel free to look at some of the research available at our website so that you can come to your own conclusions.
While I think I can understand the point Mr Brown was trying to make, ironically the letter could be construed as being racist and sexist, a label he was apparently defending the industry from.
Assuming that he was simply pointing out that the behaviour described exists, rather than supporting it, I would have to agree with the point he makes to some extent. Legislation does sometimes have this effect, but we need to be able to see the bigger picture if we want to progress and survive as an industry. Those organisations that increase diversity will reap the rewards, and to those that are fearful of employing anyone even slightly different, I wish them luck.
www.constructingequality.co.uk/faq-s/research
When the levy aches
Kathy Bachler, director, BAC Construction
As a director of a small construction company, I wish to raise an issue which we must have in common with many other ”micro” construction companies across the UK, namely the CITB levy.
In 2007-2008 we paid a levy of £5,000 to the CITB when our company’s profits varied from a few thousand pounds to a loss of several thousand. Recently when I inquired about some management training, at a cost of approximately £250-£400 a day, I was told the grant would be £17.50 a day.
This raises the question: how much of the levy is actually used for improving training in the construction industry, and how much of it is diverted into running CITB/ConstructionSkills? From its 2009 report and accounts, it’s clear that the organisation had severe financial difficulty, with losses in the past two years of approximately £23m. So you might anticipate some restraint on salaries. However, the CEO’s salary is £222,000 a year, plus pension, with six other directors on salaries over £100,000, plus pension.
“Why are we so bad at construction training? asks Linda Clarke, Professor of European industrial relations at Westminster Business School, in a Guardian article [26 October 2010]. In our own firm, we are paying so much in levy each month (at the moment it is about £305 a month; the previous year £500+ a month) that we are unable to afford any training at all.
Two years ago, we looked into setting up an apprenticeship scheme – just to get back some of the money we had paid in levy. Unfortunately it didn’t work for us as the apprentice needed daily supervision and we couldn’t afford for a key employee to be absent at college for a day every week.
The UK apprenticeship model works more effectively with large employers who have high staff head count and the management infrastructure to run the scheme. But what about the micro employers who make up the majority of the construction industry? We pay the levy but the training grant isn’t appropriate for our needs. We are burdened financially by this crippling tax and we simply can’t afford to pay twice for training. I trust this answers Professor Clarke’s question.
What should the industry’s resolution be for 2011… and what’s yours?
Our resolution should be that we want to work together better. At a time when cost reduction is the mantra, as an industry we need to respond by improving efficiency, increasing effectiveness and delivering that often talked of thing — real value. How do we do that? By recognising the need for these traits across the whole supply chain, from client, through to professionals, contractors, subcontractors and suppliers.
I have also made a personal resolution to think more, take more chances and to make more choices.
Rob Ewen, director for UK regions, Mace
After the collapse of Ireland’s economy and many clients, consultants, contractors, subcontractors and suppliers, the industry’s resolution should be to urgently reposition itself to create a sustainable model for the future. All project delivery partners should recognise the need to identify true costs. Project budgets, fee proposals, tenders and quotations must accurately represent these, along with a modest profit margin.
My New Year’s resolution is to continue to efficiently manage the Puckane United U10B schoolboys league football team in their quest to win their division!
Steven McGee FCIOB, director of construction, JSL Group, Galway
Construction should stop feeling sorry for itself, stop blaming other people and start catching up with other industries that have moved on in leaps and bounds over the past 20 years. Take the automotive sector. Manufacturers had a torrid time when oil prices hit £140 a barrel and the government was hitting them with taxation, yet they are still building quieter, more comfortable, more efficient vehicles. They didn’t play the blame game, they just got on and focused harder on research and innovation.
Personally, I’m planning to cycle to work at least once a week for a year. It’s a 50-mile round trip, but it cuts my carbon footprint, improves my health and leaves me in a better mood. I’m also pledging to take part in the King Sturge Property Triathlon in the summer for charity.
Graham Kean, head of public, EC Harris
My strong belief is that everyone in the industry should be prepared to give up some time in 2011 to work with colleges or schools to encourage students to work in the construction industry. CIOB members in particular have a duty to
get involved — if you join an organisation that promotes professionalism then as a member you should encourage, inspire and inform the next generation to benefit the industry. Too many members just pay their fees and do nothing.
Barbara Entwhistle ICIOB, area manager, Velux
Every firm’s New Year’s resolution should be to innovate more. The industry has had some major casualties this year, but it’s on the brink of catalytic change, which will eventually open up great swathes of opportunity. Some of our more innovative and dynamic companies are thriving despite the current conditions, often by focusing on the low-carbon agenda.
My resolution is the same as each year – it’s not to have a resolution, as they are always forgotten at some stage!
Charles Meynell, senior business advisor, Sustainable Construction iNet
I think the industry should “Keep Calm and Carry On”. With the construction industry encountering such difficult trading conditions, our company will continue to ensure that through traditional apprenticeships and on-site training, we can face the challenges of 2011.
My personal New Year’s resolution will be “live for today”.
Mark Stephenson, production director, William Davis
Contact us
Do you have an opinion on any of this month’s articles? Email:construction-manager@atompublishing.co.uk
Online opinion
Your reaction to the stories in last month’s CM
Low Carbon Construction Report: in full
Consumer protection MUST be prioritised [under the Green Deal]. The reputation of the industry is still blighted by a small group of rogue traders who cost UK homeowners £1.5bn a year and the Green Deal will certainly look like a lucrative hunting ground for these predators.
But we don’t need to reinvent the wheel. We need to collaborate and share the knowledge and practical experience we have, and learn from it. TrustMark is the only organisation to require on-site inspections to check workmanship, and we have the largest database of accredited tradespeople in the UK. Our standards do make a difference to the quality of service provided to the public.
We are an eager member of the ministerial advisory group looking at the accreditation standards for installers and what this means for consumer protection. We will contribute our practical experience of what works and what doesn’t, and can offer the combined knowledge of the industry scheme operators and consumer groups who have worked together under the auspices of TrustMark for five years.
Roman Russocki, chief executive, TrustMark
Morrell asks industry to cut costs by 10-30%
Is Paul Morrell Sir John Egan in disguise, or the son of Egan? 30% saving in a recession — we might as well pack our bags and all go on the dole. Our margins are well below this at present so if we work to make a loss, will we all be bailed out like the banks and Ireland?
John Frame
Denise Chevin’s blog: are we serious about climate change?
Complying with the new regulations adds a substantial cost but no value to a new home. At a time of marginal project viability and soft house prices, [side-stepping Part L 2010] is an entirely logical move. The reality is that buyers do not value renewable technology, indeed it can be seen as unproven and therefore a potential maintenance cost.
Should the position change in the future, possibly with the widespread introduction of feed-in tariffs, I suspect many housebuilders will reconsider the position, but based on a market decision — not because of government regulations.
Russell Denness
The mistake is leaving it up to the boffins who created Building Regulations which are incomprehensible to the common man — even the qualified sub-boffin type. Furthermore, the future life of effectively sealed buildings is likely to be reduced by [dry rot] once common man starts drilling holes through walls and roof.
Martin Williams
James Wates ousted from government client group
This just smacks of the government throwing its toys out of the pram because it has heard something it does not like.
Arthur Patrick Neeson
So much for a collaborative and informed approach to simplifying procurement. I’m glad to see that all the opportunities to reduce overall wastage and excess expenditure are being explored in an open and frank manner!
Neil Coker
Top five stories in Nov/Dec
One
Rok collapse leads to scramble for contracts Contractors tussle over the remains of Rok, after the social housing repair and maintenance and newbuild contractor went into administration.
Two
James Wates ousted from government client group — CIOB President asked to leave the government Construction Clients’ Forum.
Three
Contractors pricing jobs to break even More than one in eight UK construction firms are pricing jobs for no profit, says KPMG syrvey.
Four
Five-star operator Shepherd Construction’s Neil Matthias is Construction Manager of the Year 2010.
Five
No construction industry is an island What the UK industry can learn much from our counterparts on
the Continent.
Last month
PwC says the industry needs to consolidate and cut capacity — do you agree?
51% NO
49% YES
