Chris Blythe: Greed isn’t good
The construction industry needs to put aside greed and focus on the needs of the end user if it wants to avoid a race to the bottom, says Chris Blythe.
Top-earning QSs are now reported to be pocketing £100,000 a year, according to recent reports.
Put that alongside the following comments, first from Dame Judith Hackitt. In her interim review report, it says: “It has been observed that the use of ‘value engineering’ is almost always about cutting cost out of a project, at times without due reference to key specification requirements…”
Another significant quote comes from the CIOB publication on construction and the Modern Slavery Act. A leading dispute resolution expert says: “We have trained a generation of young people in the industry to think beating up subcontractors is the way business should be done – it is shameful.”
“The overall tone of Dame Judith Hackitt’s reports – and what it says about the industry culture – have not been challenged because it is true.”
My final quote, again from Dame Judith in her final report, neatly summarises all of this: “The issues have helped to create a cultural issue across the sector, which can be described as a ‘race to the bottom’ caused either through ignorance, indifference, or because the system does not facilitate good practice.”
There are many people who work in contractors and subcontractors who are familiar with these sentiments. I know that because it is the one recurrent theme that comes up time and time again from people I meet.
It is not just a sense of aggravation, but a heartfelt belief that these sorts of behaviour seriously prejudice their ability to do their best for the end user, the ultimate beneficiary of the construction process.
To be balanced, I must add that the characterisation Dame Judith puts on, say, value engineering is considered by some people unfair and misrepresents what value engineering is about.
But the overall tone of her reports – and what it says about the industry culture – have not been challenged because it is true.
Stamp duty slowdown
As the squeeze seems to continue in contracting, the “woe is me” is coming from the London apartment builders. As one said, the higher levels of stamp duty have all but killed off the central London property market. It has all but killed off high-end properties.
Most of us find it difficult to relate to the slowdown in the high-end property market – especially as many of the properties at this level are barely occupied with absentee owners. This market is not a market for Londoners.
Dame Judith was correct when she said that our culture is one of ignorance and indifference. What she did not include was greed, but that can be clearly inferred. I just hope that those raking in the £100,000 are about delivering real value rather than driving the race to the bottom.