Farmer report tells industry to mend its ways or face oblivion

The man behind a government commissioned report into the future of the industry has said it will end up on life support if it does not reform the way it does business.

Mark Farmer, the chief executive of consultant Cast, was asked earlier this year by the Construction Leadership Council (CLC) to look at what the industry needs to do to become more efficient and how to recruit more people into it.

Published today, the 80 page report, called Modernise or die, makes a series of damning comparisons with other industries and comes up with a 10 point action plan.

Farmer said: “I am very clear that if we do not address in short order how the construction industry operates and delivers, we will see a long term and inexorable decline in its fortunes.

“This is not just another ‘must do better’ school report where the industry and its clients shrug their shoulders and carry on as normal, this review warns of potential marginalisation and deterioration that might not be recoverable.”

Earlier this year, the government asked the CLC to commission a report into the industry because it is worried there will be not enough people working in it in the coming years meaning its plans to build thousands more new homes as well as its big ticket infrastructure schemes will be in jeopardy.

Farmer’s analysis concludes that long term demographic changes – set to be exacerbated by Brexit – mean the problems of low productivity, low investment and adversarial relationships pose the sector an existential threat.

Speaking to Building before the report’s publication, Farmer said he was unapologetic about creating “a bit of a burning platform” to try to shake the sector out of inaction.

His report finds that the industry could see a 25% decline in the available labour force within a decade with 700,000 new workers needed in the next five years to replace those retiring.

And it found that the business of construction lags behind its peers with productivity staying flat during two decades that have seen a 50% increase in manufacturing productivity.

It says too many clients are given no real idea when their projects will be finished – only a third of high-rise buildings are completed on time – while the industry is too fragmented and dogged by low margins, financial fragility, adversarial relationships, poor investment in innovation, a bad public image and no coherent leadership.

CLC chair Andrew Wolstenholme, who is also chief executive of Crossrail, admitted: “It does not make for comfortable reading.”

But he said it was necessary because the industry had reached “a tipping point” and added: “We simply cannot go as we are…We will not have the labour force to deliver what country needs by working in those [old] ways and those ways will not create enough added value for clients or suppliers to allow construction firms to prosper.”

The government said it wants to build more houses and more quickly than has been done in the past. Industry minister Jesse Norman said: “Mark Farmer’s important review in this vital sector is very timely. It makes a strong case for change in the industry, identifies areas where it needs to improve, and sets out areas for action. We will now carefully consider his recommendations.”