So consider this a farewell message. Having been at Constructing Excellence for nearly nine years I’ve seen tremendous change in our sector. The industry, and how clients approach it, has changed for the better in pockets. Certainly now, central Government is a much better procurer than at any other time that I can remember. Local Government performance is, well, let’s say patchy.
Leaving CE gives me an opportunity to raise some of the things that I believe are still an issue. So, typical disclaimer, these are my views not those of the organisation but here are ten things I would like to see change.
Make your minds up on domestic retrofit
We’ve got a national target to reduce carbon by 80% by 2050. Domestic buildings are responsible for around 25% of carbon emissions. Of the buildings that will exist in 2050 at least 70% exist now. That includes rows and rows of old, typically energy inefficient homes. Some sort of programme to improve the energy efficiency of homes is absolutely necessary. So far, so obvious.
Government has talked a good game – Feed in Tariffs, Eco, Green Deal. But the actions of Government have, so far, entirely undermined the market. We’ve been involved in delivering a retrofit business support programme in London and it’s clear that the SME sector has no confidence that any of the retrofit market (which has been estimated as having a potential value of £14bn) will trickle its way down to them. Green Deal is a fabulous idea but it’s structured in such a way that will only undermine consumer confidence. What kind of independent assessment will take place when the independent assessor is appointed by a party with a financial interest in the results? And what were they thinking when the interest rate for the Green Deal loan was set at around 7%? When consumers can get a far better loan interest rate after five minutes on something like moneysupemarket.com then you know things are screwy.
If the intention is to cut domestic carbon emissions then back it up with policy that works; the sort of thing that our friends at UK-GBC campaigned for in their Pay As You Save work in the first place.
Stop reinventing support structures
A plea to Government – where industry is doing something and doing it well, don’t then set up something new on the same theme. Work with, influence the debate and direction of travel but don’t try to own. All that then happens is that, when Government steps away, as it inevitably does, all that is left is a vacuum.
Does, for example, Government need to fund a measurement group for the Green Construction Board when the UK-GBC has had a successful measurement group? Is a Government funded group considering export opportunities for UK companies and international best practice really necessary when CE International already exists with just that purpose?
Where industry is funding something, get involved in that – it’s far more likely to provide a sustainable legacy.
Ah, localism. The unwanted stepchild of Government policy. Maybe this is my failing but I really can’t tell you what localism means for construction. Is it what was suggested during the election – that local people can take control of public services and therefore responsibility for construction procurement? (Because what we really need are more clients that don’t understand how to buy built assets). I don’t think that’s what Government means by localism as none of its strategic actions in the Government Construction Strategy suggest that’s the case. If anything procurement is being more centralised.
Is localism just a drive to ensure local SMEs are used in supply chains and local people are given employment opportunities so that spending can be recycled in the local economy? I don’t think that’s what Government means by localism as it’s simply not new policy - public sector clients have been able to set such requirements for as long as I can remember.
Is localism the freedom for local authorities to procure in the way they want? I don’t think that’s what Government means by localism as that freedom generally already exists.
If none of these things are localism, then what is localism? Please, somebody, enlighten me.
And localism brings us on to…
Why accept poor use of public money?
The Government Construction Strategy is great. CE could have written it, so embedded is the integration and collaborative working agenda. The Strategy demonstrates that central Government clients understand how to drive value through construction procurement and are committed to doing so over the life of this Parliament.
And that’s great. But central Government only accounts for around 40% of total public sector construction spend. Government has always shied away from requiring local authorities and other clients that receive public money to behave in a particular way. But if there is such a great recognition that one way of approaching the market delivers value and another way madness lies, then surely conditions can be attached to public money to ensure that good practice approaches to procurement are used.
There have been many attempts to gently encourage local authorities and social landlords and these have had some success but ultimately have not had sufficient traction to change behaviours. Local authority procurement is mixed. Some local authority clients are brilliant – Birmingham and Manchester City Councils for example. But lots use rubbish traditional tendering. If gentle persuasion isn’t going to work then just find a way to force the right behaviours. Otherwise built assets will continue to be bought like paperclips.
Stop thinking that investment in long-term infrastructure will create jobs now
The UKCG did a great job in the LEK report at demonstrating the value of construction, especially in how it drives employment. And as an industry we’ve done very well at showing how important long-term investment in UK infrastructure is. But, Government seems to confuse two things. Investment in infrastructure is vital for continued UK competitiveness but it won’t necessarily drive short-term employment. For this you need to invest in social infrastructure projects, i.e. schools, hospitals. Both things are important. Right now we haven’t quite got the balance right.
Enough with the frameworks already
No, really, please. Frameworks are great. I love frameworks. When they’re properly structured to give SMEs a chance and properly performance managed to drive improvement and, basically, not just a lazy way of avoiding going to OJEU for four years. But clients, you don’t all need a framework.
Right now it seems that it’s de rigeur for clients, especially those in local government and social housing, to set up a framework and go to great lengths to ensure that everyone can use it. Clients then have a dizzying array of frameworks through which they can procure.
What does this cause? Massive wasted effort from client teams, a huge amount of wasted bidding effort from suppliers and then subsequent disappointment when the expected quantity of work isn’t put through a framework as there are so many competing for clients’ favour.
Someone needs to map the existing frameworks, see where they overlap and come up with a plan for future consolidation. CE would be up for doing that if someone wants to talk to us about it.
The quality score fallacy
How many times have I heard this:
“We let it purely on lowest price as we knew that the quality scores for the bidders would be about the same.”
My response – “You’re asking the wrong questions.”
Seriously, we keep hearing that this industry is different. Some sort of particularist approach is required to get best value. If that really is the case then structure quality-based assessments so they give weight to those things that are important to you as a client. And work out what those things are early and tell everyone so, if they apply to you, you don’t make a mess of European procurement rules.
It’s ok to be dumb
We hear a lot nowadays about ‘the intelligent client’. And that’s great. As many clients as possible should be intelligent. But let’s face it, that’s just not plausible for the vast majority of organisations that buy construction.
So, if you don’t have the capacity/capability to have an intelligent client function as part of your organisations what should you do? Well, the worst thing you can do is to behave like you know what you’re doing.
For a start, don’t produce a detailed input based specification – all you’ll do is lock out potential innovation. No – in this case an outcome-based specification will be better. Let the supply side respond and see what they come up with.
And, get external advice. Of course, that includes consultants. But, actually, regular clients are more than happy to help those that only procure occasionally. Get in touch with the Construction Clients’ Group. Some excellent construction procurers are there to help you.
No, really, integrate you bastards
I love that Paul Morrell did a presentation called ‘Integrate You Bastards’. Nothing more awesome than that in the last few years. But, basically, the industry still gives lip service to the whole idea. Payment terms are still rubbish and contractors regularly procure down the supply chain by lowest cost rather than by value.
Worst still is the tendency for exploitation by integration. Contractors still get ‘partners’ in at an early stage to input into discussions on design and buildability, take their ideas before letting the whole package on a lowest price basis. Until we get to a stage where those that innovate are fairly recompensed for their ideas, either through guarantees of work or payments as consultants, the whole idea of real integration is hollow.
CE is an industry body. There are about 300 industry bodies in all. Of those, many claim to ‘represent the industry’. They don’t. And what happens is that they all compete for attention and importance to the extent that actually they are all undermined.
As an industry we agree about 80% of things that affect us. But generally when we get together we concentrate on the 20%. And all Government sees is an industry divided.
So, let’s not try to speak one voice, let’s try to be a choir. As an industry that is responsible for around 8% of GDP we deserve more attention from Government, but we won’t achieve this is if we can’t at least to sing in harmony.
You know what, Constructing Excellence is one of the best things to ever happen to our industry. I’m sure that, if it weren’t for CE’s work, central Government wouldn’t have moved towards integrated working to such a great extent.
CE relies on industry support. I can conceive of no good reason why an organisation would not want to be part of the Constructing Excellence movement. So, come on everyone, especially those of you that have profited from positioning yourselves as an organisation that believes in integration, come and get involved.