Construction's road to redemption in 2019
Will a New Homes Ombudsman redress balance between buyer and developer?
After a difficult period, the construction industry faces a battle to restore its reputation, which is why formal regulation is needed, says Chris Blythe.
There is no doubt that the last 18 months have been like a journey to hell. All aspects of the industry have been called into question.
Professionals, trades, inspectors, plc directors, developers and clients – their competence, professionalism, ethics and honesty are all on the rack.
Dame Judith Hackitt in her report was excoriating about the failure of the professionals and how the gaming of the system led a drive to the bottom driven by greed, ignorance and indifference.
The highly respected Neil Stansbury of the Global Infrastructure Anti-Corruption Centre pointed to Carillion as a “great example” of corruption and said that “blind eyes have been turned at the very least”. The CIOB’s most recent survey had 48% of respondents saying that corruption was common practice in the industry, yet very few prosecutions have been forthcoming.
“Perhaps we are seeing the first steps along the road to redemption. Some of the big contractors are finding it difficult to borrow money from their client, their subcontractors or the banks, so are having to turn to their shareholders for the money.”
As far as housing is concerned, we have had the scandal of leasehold practices by the housebuilders revealed and although the government have said they are going to do something about it they have done nothing yet. On the other hand, there is the promise to introduce a New Homes Ombudsman to redress the balance between new house buyer and developer.
No doubt those advising the developers are already looking at ways to game the system and neutralise the proposed Ombudsman.
This week we hear that there are 88,000 homeless children in London – enough to fill Wembley. Yet developers moan that they are being held back from building more property for sale to wealthy foreigners – places to stash their cash which generally remain unoccupied. You wonder how people sleep at night.
This week we hear that a settlement has been reached in the Edinburgh schools debacle, where the Edinburgh Schools Partnership are going to meet all the costs relating to issues. I cannot imagine there would be any doubt that it could be otherwise – and again it is a scandal that it has taken so long to get to this point.
Perhaps we are seeing the first steps along the road to redemption. Some of the big contractors are finding it difficult to borrow money from their client, their subcontractors or the banks, so are having to turn to their shareholders for the money.
Meanwhile, some specialist contractor trade bodies are urging their members to deal directly with the client to improve cash flow.
Another step is the belated recognition that a fundamental requirement for anyone working in the industry is to have the relevant competency. The work spinning out of the Hackitt review will have a significant impact on the industry and force professionals to be able to demonstrate competency not just assume it because of the number of post-nominals.
For the first time, construction is likely to be regulated. Initially around fire safety and then across other safety-related aspects of buildings.
Time for statutory regulation
All the issues around competence and ethics mentioned above have forced the government to take the initiative in its attempt to right the wrongs – because the industry has not done so itself. Admittedly in some cases the government has not acted where it should have done, for example, after the Lakanal House fire, but there was nothing to stop the industry from acting for itself.
Construction has been a self-regulated industry – but now it is time for statutory regulation. This has happened in other sectors, namely law, accountancy and medicine.
To be really seen to be on the road to redemption, and to regain public trust, the professionals within the industry need to speak up when they see or hear things which are not in the public’s interest. To do nothing is being complicit in the crime.
Chris Blythe is chief executive of the CIOB