Sacred cow burgers

Regime change may be good for the economy in the long run but there are always casualties while the new lot are learning to use the controls. In 1997 the Labour government, struggling with inflation, abandoned traditional methods of capital investment in favour of the fledgling Conservative concept of (off-balance-sheet) PFI. It took two or three years for the market to respond, many good firms went under and 1% was shaved off inflation. Thirteen years later the government was in disarray, PFI variants had grown into rampant monsters and the robber baron banks created the biggest sovereign debt crisis the world has ever seen - yet lived to fight another day, almost unscathed.

We have to make a plan for schools, maybe with half of the previous budget, and deliver it to government because nobody else is likely to get it right - least of
all Toby Young

Enter the coalition, determined to tackle debt not by the smoke and mirrors of PFI but by making real cuts, everywhere. It is dicing with double-dip and betting on private sector growth. Admittedly, the banks are expanding again and London has run out of grade-A office space, meaning that plans are being dusted off all over town. Let’s hope this spreads to the rest of the country and we don’t return to a loadsamoney South-east while the rest of the country stagnates.

The government’s message to construction is: “ask not what your government can do for you, ask what you can do for your government.” And although we might complain about coalition policy, there is a lot we can do to help our own cause.

All sane people involved with the Building Schools for the Future programme knew it existed in a parallel universe of crazy decision-making and overspending. Yes, I loved the RIBA prize-winning schools and, yes, I do believe good schools support good education, but I was also witness to perfectly good buildings being put up for demolition and head teachers being egged on to do projects they did not believe in. The backlash has been severe: the country is left with thousands of rotting schools and despite Michael Gove’s rhetoric, there is no coherent plan. We have to make that plan, maybe for half of the previous budget, and deliver it to government because nobody else is likely to get it right - least of all Toby Young.

Intelligent consultation and analysis followed by refurbishment and judicious interventions is probably the answer. Let’s hope Partnerships for Schools will be more receptive to new ideas than it has been.

All sane people involved with Building Schools for the Future knew it existed in a crazy parallel universe

More broadly, we face the challenge of delivering a low-carbon built environment at dramatically lower cost. Other areas of the economy are being asked to find 5% cuts, but the coalition believes structural change in the construction industry can do better than this. Paul Morrell, the government’s construction guru, is charged with delivering a report addressing these twin ambitions this autumn. We are in good hands with Paul, but he has his work cut out for him.

Two dogmas of recent decades have failed us. One is the use of the PFI to shift risk onto the supplier and obviate the need for client skills in the public sector. It was Thatcherism that stripped the public sector of its construction professionals to the point where few in authority could tell a lump sum from a two-stage tender. The management consultant’s solution was PFI variants, where risk and management were transferred to the private sector - allegedly. The real result was that both sides hired battalions of consultants and lawyers, procurement processes became denominated in years, tens of millions of pounds were wasted and clients lost all control of their projects.

How about the public sector learning, or borrowing, personnel from the private sector, where intelligent clients choose the best and leanest procurement routes, controlled by tight project management protocols? This would cut out the consultants, save a huge amount of time and let the designers speak to their real clients.

The other dogma is Egan’s sacred cow of industry integration. It has not happened and it has not delivered, mainly because it is not a good idea. It is time for a sacred cow-burger. The construction industry is not Boeing and it’s not Jaguar with its small, specialised product range. We deliver millions of different types of project, all with different challenges. Rather than integration, we should pursue models of early collaboration, as Stanhope, Canary Wharf and others do, to great competitive advantage.

The jury is out on whether the coalition is pursuing the right policies or driving the construction industry into double-dip. However, that is not the issue at hand. We have to respond to our new situation and deliver smart systems and intelligent solutions. May you live in interesting times.

Jack Pringle is a partner in Pringle Brandon