Egan on Egan

"As far as I'm concerned, the forum will be worthwhile if it does things instead of talking about things," says Sir Michael Latham, reflecting the feelings of many. "If it's just important people talking, it will last a year and that will be it."

Chairing the forum is Sir John Egan, who presided over the 1998 Rethinking Construction report and is one of the most respected business leaders in the country. "There's nobody more likely to pull this off," says Latham.

So, will it work? Last week the forum agreed to focus on three priorities: integrating supply teams, getting clients involved, and "people" issues such as training and safety. It's early days, and the forum meets again in two months to finalise its agenda. Egan has hinted that he will quit after a year if it does not work.

In this exclusive interview, he tells Building what he wants the forum to do, what he thinks of the Egan report, and why Bob the Builder is going to need a laptop.

Q: What are your objectives for the forum?
A: I'm simply looking back at Rethinking Construction and trying to get the whole of the industry involved. We now know we can achieve the targets set.

Q: What happened at last week's meeting?
A: We looked at the areas we thought would get the agenda moving forward most quickly. We all agreed that integrating supply teams earlier on was the most important thing. The second thing was that we felt clients, especially the government, had to take more of a lead. Then there are people issues: we want to see a better trained and educated workforce, and to tackle safety. I want to achieve the safety targets [a 40% reduction in fatalities within three years, set at February's safety summit] in the first few months.

Q: Ministers initially proposed a separate forum to tackle safety. Why?
A: Because they hadn't thought about it. I don't think they had thought that the best way to gain safety was through a well-managed and predictable industry. But that's the only way I could see it working. I know safety is important but it will come because of training, preplanning, good process management. Not by putting hard hats on, wearing yellow vests, having toecaps and fining people. If people don't know how to be safe, they can't be safe.

Q: So you believe safety is best tackled through the Rethinking Construction agenda?
A: Absolutely. When I was at BAA, we went round Heathrow and interviewed everybody working on every site, and only one-third of the people were qualified to do what they were doing. When we built the Heathrow Express, we made a careful log of every accident. We found 90% of injuries were to people working out of process.

So we have to treat safety and training as key inputs into better process management. Hopefully we can utilise the HSE's analysis and its ability to put rules and safety regulations in place to spur process improvement along.

Q: Given the latest safety figures, shouldn't the industry prioritise safety and training and worry about process improvement later?
A: Oh no, no. Who's going to pay for that? Margins are razor thin. The waste has to go before we can pay. You can't improve one of the inputs to a process on its own.

Incidentally, the safety record on Movement for Innovation projects is better than the government's three-year targets. We've got to get this more widely disseminated. The one thing that would make me very angry is if profit margins go up – and they have on the M4I projects – and firms haven't put the money into training. I'd be very upset.

Q: Is the government doing enough to promote Rethinking Construction?
A: They've got to pick up their game. We'd like every government department to read Rethinking Construction and procure their projects that way, and we'd like the National Audit Office to check they're doing it. It's most important to keep the government working at being a best quality client because, after all, they're responsible for about 40% of all construction.

Q: What should the government be doing to improve its record?
A: Anything that gets in the way of forming the integrated team has to be removed. More money should be invested up front in the project. [The government] should also be prepared to pay consultants for any work they want done, which often they're not prepared to do.

I’d be very upset if profit margins go up and firms don’t put the money into training

Q: So government tendering is wasteful?
A: The trouble with tendering is that a lot of people do work at risk, and they do it grudgingly, and the work is generally not good. The old tender route is simply wasteful. There's also a huge amount of waste that goes into PFI tendering, but at least that is an integrated team.

Q: The strategic forum reports to Brian Wilson, the industry and energy minister. Does Wilson understand the industry and take it seriously?
A: I don't know. He will have to appreciate it is important. He will have to respond to it.

Q: You say you want to get the rest of the industry involved in Rethinking Construction. Who are you referring to?
A: Component makers, for example, have never been part of the thinking of the industry, but they could bring huge safety improvements. For example we could start manufacturing on grids with interchangeable parts that fitted properly. Once things don't fit, you have process difficulty, which means lack of safety.

Q: Some people in the industry feel Rethinking Construction was too critical.
A: I don't think it was. It was hard, but it was not in any way unreasonable.

Q: Three years on, do you think the report has been a success?
A: Through initiatives like the M4I, Rethinking Construction now touches 10% of the industry.

I think that's a wild success. Normally what happens to government reports is people flick through them and throw them in the bin.

Q: What about the other 90%?
A: We can't do it the way they do it in France, for example. Bouygues has a disciplined supply chain because it is a huge company. It has been spending millions of pounds a year on research, it has a massive building programme with huge technological back-up. But I don't think we are going to build up those companies here – we're going to have to do it [through Rethinking Construction].

Q: Does the report need to be updated?
A: No, but there are some parts I would accentuate more. We said there was a vision

for the future; we talked of totally predictable buildings built on computer. That's in our grasp.

Q: How can that be achieved?
A: You need the right tools. Strangely enough, I think the best thing I've seen yet is Asite [the e-commerce venture that Egan chairs].

Q: Asite marked your return to the construction industry after a three-year absence. Why did you agree to chair the company?
A: Of all the things in Rethinking Construction, what will make the difference? It is a disciplined supply chain prior to the commencement of the project. That is more important than anything else. I joined Asite because, within 12 or 18 months, it will have the capability of total supply chain integration and preplanning of projects. By the way, if BAA hadn't picked Asite, I wouldn't have done it.

Q: Do your roles at Asite and the strategic forum create a conflict of interest?
A: I asked the government to look at that before I took on the appointment and they said no. In fact, they thought it was very helpful. I wouldn't have taken on the strategic forum if I hadn't already rejoined the industry through Asite.

Q: Initiatives like the strategic forum and Asite are aimed at the big players, but many of the industry's problems lie with the smaller firms.
A: At the moment, if Bob the Builder hires a van, gets a wheelbarrow and a shovel, he can go into business. The way things are changing, I think he's going to need a computer as well. I think he's going to be able to join into supply chains.