Decent homes, better schools, adequate healthcare, transport that works. All the big political ambitions of the 21st Century depend on a revved-up construction industry, which Constructing Excellence is here to deliver

A well-worn cliché it may be, but this really is crunch time for the construction industry. The mainstream media may concentrate on the politics of the Olympic bid, the economics of Crossrail, the nimbyism surrounding plans to meet the growing housing crisis and the emotive reactions of the public to health and education, but it is on the shoulders of the construction industry that these ambitions lay. On top of all that, there is the uncertainty of a coming election campaign.

Constructing Excellence is the organisation that is trying to create a coherent voice for the industry to tackle the problems caused by these mighty aims. This supplement identifies some of the key sectors and their particular challenges for the next few years. It seeks to demonstrate how Constructing Excellence is meeting these challenges, and presents arguments for debate on future problems.

The government is waking up to construction’s importance. Construction minister Nigel Griffiths says: “It was demonstrated last year when one month output figures were under-reported. When this shortfall was made up in later figures economic growth was sent soaring.”

He acknowledges that the only way to ensure the government meets its grand ambitions is to listen to the voice of Constructing Excellence: “It continues to play a part in ensuring we have a world class construction industry,” he says. “Constructing Excellence is working in every region to improve performance, identifying, capturing and promoting innovative ideas and practices.”

The key sectors discussed in this supplement include the following:

Infrastructure

The Sustainable Communities Summit of January 2005 looked at the progress made on the government’s regeneration plans since they were announced exactly two years earlier.

The government wants to build a city the size of Leeds to the east of London and, effectively, to knock down and start again with huge swathes of northern England. Naturally much of the focus has been on housing, but this forgets the sheer amount of infrastructure needed to facilitate and create these communities.

Barry Broe, head of planning and policy at Transport for London, points out that his organisation alone has £10bn to spend over the next five years, which includes extensions to the Docklands Light Railway and the East London Tube Line, as well as the Thames Gateway Bridge, vital to unlocking London’s biggest brownfield site.

With so many infrastructure needs, he says that there could be losers amongst those competing to attract the best skilled people. Infrastructure, after all, is immensely complex. Think of Crossrail, threading its way underneath the existing tube network.

“Construction is only as good as the programme that goes with it,” he warns.

Housing

The infrastructure issue, however, should not be allowed to crowd out concerns over housing. Housing Forum chairman Steve Lidgate says: “Housing has probably become the single biggest issue in the political arena.”

Anti-war and pro-hunt protestors may well disagree, but there is real power behind Lidgate’s argument: “After ten years of falling housing output and rising prices, most people now accept that there is a need to build new houses. The failure to meet housing needs is a barrier to employment. It is affecting our economic growth.”

The UK not only needs more housing, though, it needs better design, more variety, and quicker build times. Few would dispute the claim that it lags behind many other major industries in satisfying its customers.

Skills

The industry is 300,000 people short. Profit is supposed to be a great motivator but it isn’t working here: the legendary Terminal 5 agreement where skilled workers could earn £55,000 a year, and the fact that construction accounts for 20% of growth in GDP, seems to have had little impact on attracting workers.

Nor is it just about luring newcomers. Keeping the workers we’ve already got is a real challenge in an industry with a terrible health and safety record and a reputation for being dirty and uncomfortable. It is also one of the least sexually and ethnically diverse of the major industries. The necessary skills for the major construction projects on the horizon are simply not there. And this is not just the brickie on site. There are not enough management, financial and top level skills either, as well-trained people and graduates look to more glamorous industries.

Commercial

The commercial market has suffered in recent years due to an economic flattening and general uncertainty following 9/11. Things appear to be back on track now, presenting yet more opportunities for a hungry construction market.

Some of the main issues here are arguably with the client. David Crump, head of project management and construction at developer Quintain, is responsible for two of the UK's most important regeneration projects: the revamp of the Greenwich peninsula surrounding the Millennium Dome, and the £1.3bn redevelopment of Wembley, adjacent to the new national stadium.

Crump says: “Clients might not feel as though they have a responsibility to change the construction industry, but I feel that we have to be involved, be the catalyst for change.”

Warming to his theme, Crump adds: “The building contract in my experience is used mainly to dump risk on the contractor. This seems to still be the case, especially when some of the smaller developers are involved.”

At Wembley Crump and Quintain have looked to share risk with the contractor, sharing any gain or any loss caused by the construction programme.

Local Government

Local government has often been slated for its perceived inefficiencies. Indeed, the Gershon Review recommends cutting £7.5bn over the next three-and-a-half years from local authority operations.

Yet with the government looking to establish Local Education Partnerships, councils are set to become more important than ever. LEPs involve contractors, local authorities and government quangos sharing framework agreements to redevelop an area’s secondary schools over the next 15 years.

Some fear that local authorities have yet adequately to grapple with the problems of the construction industry, of which they are such a major client. A recent Constructing Excellence survey showed that while 61% of authorities view innovation in procurement and construction as very important, only half of those surveyed encouraged innovation with any kind of incentive.

Constructing Excellence 2005