The Building Engineering Services Association (BESA) and the electrotechnical and engineering services trade body ECA have both welcomed the government’s decision to focus on improving productivity as a key element of its special ‘sector deal’ with construction.
Construction has been chosen as a front runner alongside life sciences, artificial intelligence and the automotive industry for a new partnership between government, academia and business as part of the government’s new Industrial Strategy. Other sectors to benefit from similar deals will be announced next year.
The construction sector deal could involve around £250m in extra investment, designed to improve the industry’s output and underpin plans to increase house building and infrastructure development, according to Business Secretary Greg Clark.
The agreement includes a fund of £170m to be spent on R&D and innovation targeted at improving the industry’s productivity. Businesses will be encouraged to match the funding as part of a strategy aimed at improving delivery of ambitious house building and infrastructure targets, according to the government.
Paul Reeve, ECA Director of Business welcomed the new sector deal but said: “The built environment must be seen ’in the widest sense’ in order to maximize the benefits of the deal, which was put to government very much on the basis of whole life asset value, and not just for asset owners, but society.”
Business Secretary Greg Clark said that poor productivity was holding back economic growth adding that the Strategy was aimed at addressing “the weaknesses that stop us achieving our potential”. He said it would support the “five foundations of productivity: ideas, people, infrastructure, business environment and places”.
Improving the productivity of construction would involve “greater investment in innovation and skills, creating new and well-paid jobs and maximising its export potential”, according to a government statement.
“This will also reduce the environmental impact, improve the efficiency and reduce whole life cost of new projects and buildings to help build the houses, schools, hospitals and major transport projects we need”.
BESA’s legal and commercial director Rob Driscoll said the announcement was “hugely positive” and demonstrated that the government recognised the important role played by built environment professionals in delivering “social, economic and healthcare benefits”.
However, he said it was vital that the built environment “in the widest sense” was properly represented in the process for delivering the sector deal.
“Part of improving construction productivity must be a focus on the ‘whole life’ performance of the built environment i.e. ensuring that assets are designed and delivered in such a way that they continue to be fit for purpose throughout their operating life,” said Mr Driscoll.
“This will require wider adoption of digital methods of construction; increasing the amount of offsite manufacturing; development of the type of skills needed to support a more modern industry; and sorting out the industry’s payment problems so that supply chains can operate more harmoniously and collaboratively.”
BESA and the ECA said they looked forward to “working with the government and our industry partners to deliver these targets”.
Paul Reeve added: “Boosting industry productivity is possible, notably by engaging fully with digital processes and procurement, but to underpin productivity, the supply chain must also be involved early, and paid reliably.”
BESA and the ECA also welcomed the release of more details of the £64m National Retraining Scheme, announced in the Budget, and pointed out that this could be crucial in making sure more young people were made aware of the opportunities and benefits offered by apprenticeships.
Construction is one of the largest sectors in the UK economy with a turnover of £370bn, contributing £138 billion to the UK economy and employing 9% of the total UK workforce – 3.1 million people.