Last month leading contractor Ray O'Rourke declared that the construction industry in the UK and Ireland wasted £25bn a year. Now a new report exclusively revealed to QS News underlines O'Rourke's complaints, concluding that the UK and Ireland are bottom of the European construction efficiency league. And the reasons for the pathetic performance in comparison with our Continental neighbours? Just as O'Rourke stated it recently - poor procurement and a lack of prefabrication in our industries. Will UK construction ever learn? Phil Clark reports, while on page 14 Richard Heap provides a guide to one possible solution - logisitics centres

Bernard Williams is far from surprised at the results of his latest report into the industry. The 69 year-old founder of his own QS and research firm Bernard Williams Associates concluded that UK construction was highly inefficient compared to mainland Europe in a report he wrote for the Financial Times back in the early 1990s.

And he's been banging on about how the industry, and QSing in particular, needs to undergo a major cultural shift to improve output since he started his Bromley-based practice in 1969. He is quite adamant his latest report for the European Commission reveals a fundamental failing in our industry - the lack of an industrialised approach to building and the lack of input on design from the contracting supply chain. Hence we are 25-35% less efficient than the best performing industries on the continent, Belgium and Norway, according to his report.

For Williams we might have high professional skills in QSing or cost management in the UK, but that can only paper over the serious cracks: "The crux of it is this - we are good at cost management but we are managing the wrong costs."

"The costs we are managing and controlling are too high to start with. This is why this study is so important - it identifies those countries that build for less by prefabricating."

The key conclusions underline structural flaws in the industry, he adds. "The architect is kept apart from the industry by the QSing process. It's a serious issue - the QS has fulfilled an important role over here but by allowing architects to produce something in isolation you prevent the contractor from making any meaningful contribution to the economics of the design. Contractors in other countries (on the continent) have strong ideas about how they are built and architects over there listen to them."

We are good at cost management but we are managing the wrong costs

Bernard Williams, report author

For Williams there is a woeful lack of research and development in the UK, compounded by a lack of properly trained workers. "The more complex the building type is the worse the UK performance became - that's because we are asking an underpaid, undertrained and in some cases badly managed labour force to produce buildings. It's the worst of all possible worlds." It would be remiss not to mention the current Wembley project as a perfect example of Williams' argument. "It's complex (Wembley) and a big learning curve. The workforce is not qualified to do it properly."

Hence Williams is a fan of construction management, the procurement method that emerged in the 1990s but has struggled this decade in the wake of high-profile disasters such as the Scottish parliament building and the Great Eastern Hotel scheme in London, for complex projects. "I still think it gives you the best solution. What Bovis did at Broadgate in London (pioneering construction management) I believe split the efficiency difference in half between us and Europe. You are never going to erode all of it because of the system, but it went some way."

Baumeister

Where does the QS fit into this new culture? Williams has argued for two decades for a new direction for the profession. He wants it to move away from the traditional Bills of Quantities role to a more creative and pro-active position within the construction team.

At some stage someone is going to have to own up and admit that this problem is real

Bernard Williams, report author

QSs should become more like the German Baumeister, who is the equivalent to a construction manager. "He or she's an engineer with strong technology skills and a strong knowledge of building economics. They work for the client as a construction manager works with the architect."

He also advocates QSs moving from dealing with disputes to using their skills positively. "They have the best training in the field of economics of anyone in Europe, but the skills are not allowed to be used in full."

Warnings about inefficiency and the need for change have been voiced by industry opinion leaders such as Sir Michael Latham and Sir John Egan in major reports over the past decade, and more recently by Ray O'Rourke. Will this make any inroads into converting rhetoric to action? Williams is presenting his findings to industry umbrella body the Strategic Forum later this month. So the hope is that some action may follow. "At some stage someone is going to have to own up and admit that this (problem) is real," says Williams. Getting clients educated would be a start, he adds. "This will open their eyes to the fact that they are paying more than they should." Williams is realistic about how quickly change can come about, however. "You are going to have to change the culture. It ain't going to happen overnight."

How the report was produced

The research was partly based on Spons data produced by Davis Langdon in 2000. “It was very good, it covers a wide variety of building types,” says Williams. “We took the average cost per square metre for the different types then worked out the figures for labour efficiency from how much of the building type is produced in that country.” This analysed over 80 building types in 12 countries.

Williams’ team then combined this with a study on resource drivers (an action that influences the use of resources) in each country, which he found broadly mirrored that of the labour efficiency finding. The team drew on detailed interviews with 30 experts who had worked across Europe and 2,000 articles on the subject.

A major amendment made by Williams’ team was to the UK hourly rates used from Spons. “The UK industry is dominated by sub-contracting. There are a lot of bonus payments. We upped the rate – by 30-40%.”

Williams describes the report as a pilot which could be used as a basis for more detailed studies. Yet he defends the basic findings. “The amount of building types we looked at made the chances of the findings being seriously amiss very remote.” Williams thinks a detailed comparison between high performers such as Belgium or the Netherlands and the UK would be the best next move.

Key findings

The high scoring countries in the efficiency league showed:

  • extensive industrialisation of the building process

  • total or partial delegation of detailed design to the contractor (or, as in Germany, to a highly trained professional construction engineer)

  • a well-paid, well-trained, industrious workforce

  • limited scale of sub-contracting

  • well-developed, lean construction management

  • single point of responsibility for design and construction

Other findings

  • The most efficient country in Europe, Belgium, pays site workers over 50% more than in the UK. “In Belgium they train people on site. They require little management after that,” Williams says.

  • The levels of innovation reflected levels of investment in research and development and correlated with the efficiency rankings

  • With one or two exceptions there was no correlation between site health and safety performance and resource use efficiency

  • The report did not specifically consider the quality of buildings produced but the author says: “There is not too much evidence to suggest that our buildings (in the UK) are any better or worse than anyone else’s.”