A long, hard look

The tragedy that unfolded on 14 June at Grenfell Tower is likely to have far-reaching ramifications for both the housing and construction sectors.

There are two levels of debate that arise here. Firstly, the wider political implications of failure in broader housing policy and regulation; and secondly, the actions of the construction industry.

Head of the upcoming public inquiry, Sir Martin Moore-Bick, has already stated that he will concentrate on the facts surrounding the Grenfell Tower fire, and not address wider policy. But there must have been a major failure within the end-to-end process of regulating, designing, procuring, constructing and managing housing stock. Whether it has been contributed to by the construction industry’s own delivery failings will become clear. But confusion over cladding testing is already perpetuating the feeling that some of our most important industry standards are indeterminate, lack transparency and appear open to gamification or playing the system.

Recently, there has been a significant negative shift in public perception of the housing industry beyond the world of social housing. The growing sense that there is inequality in the housing market, now amplified by Grenfell Tower, is reinforced by stories of developers exploiting a system that looks increasingly flawed. Increasing reliance on individual investors buying units has further muddied the waters, leading to accusations that developers are busy building safe deposit boxes and pension plans instead of decent accommodation.

The build-to-rent sector has not escaped criticism either, with some permitted development conversion schemes for rent being labelled poor quality, while some premium rental products are accused of being unaffordable and unaligned to real market need.

Let’s not forget the discontent brewing that Help to Buy is seen to have become a structural subsidy for the larger housebuilders’ profits.

Meanwhile, in the public sector, as registered providers seek to reduce reliance on declining government grants and local authorities look to create income, their transition to quasi-private sector business models has led some to question their core social purpose.

Whether any of these observations are justified is of course open to extensive and emotive debate but increasingly negative public perception is now becoming the residential development industry’s reality. The homebuilding sector fundamentally needs to be building more genuinely affordable, high-quality homes more quickly in the right places across a variety of tenures. This is the crux of our so-called market failure conundrum. And something must be done about it.

The simple answer to all of this has to be led by policy and regulation. Without pre-empting specifics, the Grenfell Tower disaster is highly likely to lead to a tightening of regulations and an increase in both public and private sector clients’ awareness of potential reputational, statutory and indeed criminal risk in not demanding the very best standards of construction and specifying and procuring accordingly. This will put further pressure on existing skills, unfortunately, and will potentially reduce available supply chain capacity through “raising the bar”.

If there has ever been a moment to step up efforts to invest and innovate in how we organise and deliver, surely this is it?

The land market also lies at the heart of housing supply and affordability problems and there is a growing cross-party consensus on the problem of land value speculation. Any intervention here of course brings with it the risk of unintended consequences but the call for action is growing.

But it’s not just up to the government. If there has ever been a moment to step up efforts to invest and innovate in how we organise and deliver, ruthlessly pursuing the attainment of better quality, efficiency and safety, surely this is it? We need improved skills and training, embracing increasing use of technology and more high quality, accredited pre-manufacturing solutions, all supported by a better integrated delivery model. This is the only way we will consistently deliver a better standard at the higher levels of housing output that we desperately need in this country.

All of this ultimately needs to be paid for out of improved productivity, not by reducing supply chain margins or by charging clients more. Major businesses spanning clients, contractors, consultants and suppliers need to urgently think about how they can demonstrate pre-emptive leadership here that the willing and responsible part of the rest of the industry can then follow.

And finally, if the need for this industry to improve its standards wasn’t clear enough, consider the fact that we continue to kill people in the process of building the very things that are being accused of now being unsafe. Just one week after the Grenfell disaster, two people were killed on a construction site in Crewe. Our industry fatalities amount to the cumulative equivalent of the current official Grenfell Tower death toll of 80, every two to three years.

No doubt many will read this article and immediately move onto their day-to-day business, assuming the challenge I set out here is someone else’s problem. That attitude is one that has characterised our past. We need a different future – one that uses the awful events at Grenfell Tower as an unprecedented collective impetus for change.

Mark Farmer is founding director and chief executive at consultant Cast and author of the industry report Modernise or Die