Ask not what the next government can do for construction

During an election campaign, it is always tempting to run through each party’s manifesto and examine what they are offering – or not offering – our industry. And that’s fine. But the construction industry also needs to ask itself: what can it offer the next government?

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This is important because, as an industry, we really do need to lift our game. Throughout my career, there have been numerous reports diagnosing construction’s ills, going as far back as Sir Michael Latham’s review in 1994. And, if we are perfectly honest, despite progress in some areas, the industry remains beset by many of the fundamental problems identified in that review and others since. Not least when it comes to low productivity and a lack of investment in innovation and skills.

On modern methods of construction, the government has actually made progress, actively promoting MMC through the Construction Playbook and department frameworks to build schools, prison spaces and defence accommodation. More could be done, of course, and parliament’s built environment committee was right to call for a refresh of the MMC strategy this year, particularly in light of the high-profile failures of some modular construction housebuilders.

The case for transforming the industry through an industrialised approach only continues to grow

It was welcome, therefore, to hear Labour’s shadow housing minister Matthew Pennycook recently highlight the important role that modular will play in delivering on Labour’s agenda, particularly around new towns, should it form the next government (an outcome that, let’s be honest, looks increasingly certain).

Of course Reds10 is a firm believer in the power of MMC to transform our industry. The benefits – around cost, quality, productivity and sustainability – are now both well-rehearsed and proven. The case for transforming the industry through an industrialised approach only continues to grow.

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This is particularly the case for the public sector estate, with the growing need for new high quality sustainable buildings across key areas such as education, defence, justice and the NHS. Yet the next government will be operating in difficult circumstances when it comes to the public finances.

According to the Institute for Fiscal Studies, government departments are facing a 13% real-terms cut in their budgets from 2025-26 to 2028-29. This collectively amounts to a £19bn cut, comparable to the round of austerity implemented by David Cameron and George Osborne in 2010.

A renewed and reinvigorated commitment to MMC and the efficiency that it can bring will help the next government to continue to deliver on its priorities for the public sector estate.

Our industry needs deep reform and wide-ranging modernisation and that needs to start with the failing tier one contractor model

But, while the government can play an important role in driving reform of construction, through regulation and as a client, ultimately it is up to construction itself to get its house in order. And that must go well beyond MMC to include progress on the wider industrialisation agenda.

Our industry needs deep reform and wide-ranging modernisation and that needs to start with the failing tier one contractor model. A business model with a main contractor managing an ever-growing chain of smaller suppliers is inefficient, drags down productivity and fails to incentivise investment in skills and innovation. As a result, despite decades of technical advances in construction, the benefits have not flowed through to improved productivity.

We need a new model of tier one contractor that brings more of the supply chain and design in house, so the innovation that has been happening can be properly harnessed to drive improvements in productivity. We need a new model of doing business, with more tier one contractors developing their own workforce, as construction used to do (we can learn from the past as we look to the future).

We need to embrace MMC and standardisation and to invest in continued innovation. That is our vision at Reds10 – and we are showing that it is not only possible but can deliver better results for clients and the communities where we work.

Yes, there are actions which the next government can take to help accelerate this industrialisation agenda: speeding up the planning system; supporting a platform approach to delivery; making it easier to invest in apprenticeships; and continuing to procure and deliver long-term programmes of work to name a few.

But, when we look at what the political parties are proposing, let’s think less about what the next government can do for us and more about what we – as an industry – can do for the next government. Let’s drive forward the industrialisation agenda, reform our broken business model, invest in skills and innovation and in doing so better shape our built environment, boost our economy and build a better future for this country.

In that way, construction can step up and become a true partner to the government which the UK will elect next week.

Paul Ruddick is the chairman of Reds10