Why productivity must be our top priority
New Build UK chairman Mark Castle argues that construction productivity must improve if the industry is to make a success of new infrastructure projects – and Brexit.
If you’ve worked in the UK construction sector, you’ll have been hard pressed to have missed that we have a productivity problem.
In real terms, we haven’t improved productivity in decades – and we lag painfully behind our European rivals and other UK industries. In the last 10 years, manufacturing output has increased by 50% and by 30% in the service sector – but it hasn’t improved at all in construction.
This isn’t because our workers work fewer hours, or because our attitudes aren’t right – it is in part because we’re not adopting new ways of working as quickly as we should.
Among the UK’s big industries, we lag behind on innovation, research and development, diversity – we’re at the back of the queue on so many important metrics that could help us improve.
It is just not an acceptable position. Our productivity needs to improve if we’re to have a hope of delivering the infrastructure and development we need to keep the UK economy growing sustainably – and indeed to have a hope of making a success of Brexit.
As asset values peak and we are still experiencing labour and material cost increases then development appraisals are coming under pressure. As an industry we must find ways of delivering projects quicker and more efficiently, otherwise projects will stall as viability will be questioned. We need to come up with ideas on how to do things differently.
Reform of pre-qualification
As the new chair of Build UK, I’ve made improving productivity and driving innovation a key component of my agenda – one of my three priorities for the two years I’ll be in post.
Since the formation of Build UK in 2015, we’ve already made some significant steps forward in this area, particularly around reforming pre-qualification for procurement.
So far, we’ve worked together with representatives from across the industry to agree a set of target outcomes and principles to reform pre-qualification. Beyond just simply improving productivity, our aim is to reduce costs for our members, improve risk management across the industry and to drive efficiencies and evidence of high standards through the adoption of a new common assessment standard.
Over the summer, we carried out “deep dive” research, working with partners and members to evaluate the assessment schemes used across the industry. Using that data we’re beginning to build up a picture of what the Build UK “common assessment standard” could look like.
We’re now setting up a steering group and a number of task groups of Build UK members and industry stakeholders to drive its development and eventual adoption. The aim is to reduce the burden of having to meet so many assessment schemes – and to increase the transparency and relevance of pre-qualification assessment.
Progress following Farmer’s lead
We’ll keep pushing for this – it’s a huge issue that affects so many companies from the top of the supply chain to the bottom, and a careful balancing act to provide the right level of assurance to clients. Working with the rest of the team at Build UK, I know that there are many more incremental improvements that we can make as a sector that collectively will make a really tangible difference to our productivity.
Many of these were laid out by the Farmer report last year, and 12 months on it is pleasing to see that we’ve made real progress on some of his recommendations – and that the government chose to support the vast majority of them when it published its official response in July.
I want us to take a strategic lead and build a real consensus across the sector about how we can begin to seriously compete on productivity – what can we learn from other industries?
We’re faced with the proverbial “burning platform” – if we don’t start working smarter there are going to be real consequences, from SME level to Tier 1 contractors. It’s time to shake off our productivity programme and show that we’re ready to really pull our weight.
Mark Castle is chair of Build UK and deputy COO for construction at Mace