Construction must avoid the mistakes of the last downturn

Shortly after the lockdown started, construction faced a real crisis. This was not just the challenge of shut down sites and jammed supply chains. This crisis was triggered by the general public, who did not think that construction work was permitted, that sites were safe or that they should stay open.

As if continuing vital work was not challenging enough, some construction workers were subjected to abuse, and delivery trucks were prevented from getting to their destinations by the police. Construction was in the news for the wrong reasons.

For a short period of time, our industry was at risk of losing trust. Putting aside that the government’s lockdown message had not been clear, the reality was that images of unsafe site practice quickly spread across social media. Rather than proudly promoting the vital work that was being delivered by the sector; the highways, homes and hospitals, we were explaining things that did not look right.

It took a lot of determined effort by the industry as a whole, convened by the Construction Leadership task group and industry bodies, to regain the initiative – through clearer messaging from government, the development of safe working standards and promotion of best practice.

Construction work takes place fully in the public eye, and the public deserve to be assured that construction will do the right thing

The reason why I highlight the site safety crisis and bracket it with pride in the sector is that it highlights a wider reputational issue for the industry. Construction work takes place fully in the public eye, and the public deserve to be assured that construction will do the right thing – for example, that it will run safe sites. As we plan for recovery – we must also plan to be doing the right thing commercially. In the short term, this means paying on time, cascading money through the supply chain and keeping people employed and projects going.

In the longer term this could involve rethinking the balance of risk in contracts or guarding against toxic commercial practice triggered by a drop in workload. If we fall short on either managing healthy sites or ensuring the sector’s health, we will spend more time explaining the poor behaviours rather than celebrating the sector’s contribution to the recovery.

Judging by previous downturns, the odds are stacked up against sound commercial practice. Many readers will recall dubious tactics on all sides after the 2008 crash and will be hoping that the same mistakes are not repeated. Incomplete design work, uneconomic bidding, under-resourced teams and unfair risk transfer all created deep-seated problems, heightened by an all-pervasive, aggressive conflict culture. Could we really be proud of what we did, even if it did save businesses and deliver projects. Surely the cost was too high?

Instinctively we know that not doing the right thing came at a significant cost to the sector: the loss of jobs and businesses; the erosion of margins and balance sheets and the loss of trust throughout the industry. One result is that the sorting out of issues as diverse as payment, training and even the sharing of digital models has been made much harder during the recovery.

As sites restart and as projects are bid, we will start to make the thousands of individual decisions that will shape the character of the recovery

As sites restart and as projects are bid, we will start to make the thousands of individual decisions that will shape the character of the recovery. If we make the right choices, doing the right thing, then the industry has a much better chance of coming out of the covid-19 crisis with the capacity it needs to deliver essential investment.

Making these choices however will be doubly difficult, not only because they will be made by individual businesses but also because they could involve big compromises in sharing both pain and gain. Organisations may choose to accelerate payment or to reset the risk transfer in a contract. Alternatively, they may opt not to. As a rule of thumb, if the consequence of the choice is ‘winner takes all’, it probably will not be the right choice.

So where does pride and industry reputation come into this? As I have worked with the Construction Leadership Council task group over the last few weeks, I have seen key parts of the industry, including clients and the supply chain, come together like never before to convene an effective response to the crisis. From the development of the site operating procedures and a key statement on payment to a joined-up industry ask to government, the task group has presented a positive and united front. With the industry’s high-profile role in the delivery of the Nightingale hospitals we are demonstrating that we are making a difference and can take pride in what we do.

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As we look to the next stage of the crisis, we need to take that sense of pride a step further, channelling it to build a sense of collective responsibility for the health of the industry. If pride in construction encourages firms to pay their bills on time and clients to manage contract terms fairly, to think of the future as well as the present, then we will be doing the right thing, and in doing so, we will be setting up ourselves properly for recovery.

Doing the right thing will not be easy. It may cost more, and it will almost certainly involve difficult compromises. However, the outcomes are likely to be much better for the team, the project and the sector. We can protect our industry if we all do the right thing. Looking after our sector’s health will be something that we really can be proud of.