Labour Party Conference Fringe Meeting 2004

Improving the built infrastructure of this country – what next?

Speech by Trevor Walker, Construction Confederation

Chairman, Ladies and Gentlemen

This is a welcome opportunity to address you, and I was pleased that Nigel Griffiths, minister responsible for construction was able to join us. It’s just a pity that his pressures of office prevented him from listening to the industry because we do have concerns of confidence.

Construction’s relationship with Government, our industry’s biggest single client and sponsor, is vital and this opportunity to discuss how we must work closer together to deliver a better value for money infrastructure programme for the nation is crucially important

This is recognised by all sections of our industry - employers, unions professionals and product suppliers.

It’s vital not only to those 2½ million men and women who work every day in our industry, but society as a whole.

Improved public infrastructure in the form of:

• Schools
• Hospitals
• Social Housing
• Transport

Benefits everyone, people of all ages, from every walk of life.

As an industry we welcomed this Government’s recognition of the significance of infrastructure to this country’s well being and future prosperity and of the need to continue investment to improve it.

After years of neglect and under funding that support and recognition was a breath of fresh air.

It’s a shame then, that despite all the talk it just isn’t happening

Almost in every area spend is fading.

Targets are being missed.

Others are at risk of being missed.

The Construction Product Association’s superb report ‘Achievable Targets’ highlights where the Government is already behind and getting further and further behind.

I have my own examples:

• The integrated ten year transport plan is in disarray, effectively cancelled, with road and rail, capital and maintenance spend nowhere near planned necessary levels

• Prime contracting, to modernise defence estates infrastructure, is way behind implementation.

• Scottish Water’s programme for upgrading water and sewage north of the border has failed to materialise. Spend again half of that proposed, though now panicking

• New school building and maintenance behind spend needs

• Housing – becoming increasingly bogged in ever growing and stifling regulations and planning issues – substantially raising costs

One point I would like to nail right at the onset is the suggestion that our industry does not have the capacity to carry out the programme of works

We do. So don’t say – “we had to slow down its release because you couldn’t cope”

This is nonsense –

A complete red herring.

Our industry always delivers its projects and programmes

It has a clearly demonstrated ability to respond to steady and sustained growth

Never has it failed to deliver because of a resources issue.

For the last 3 to 4 years the Government has promised a programmed investment on infrastructure

We believed the promise.

We invested in:-

• Recruitment
• Training and upskilling
• Plant and material developments
• We co-ordinated design teams
• We adopted modern procurement processes using longer term relationships and developed supply chains
• We resourced and financed
• We researched and developed

All has built the more responsive, capable industry you required able to deliver your prophesied needs

As an industry we also know smooth consistent work flow delivers best value for money.

The message is simple:

Our industry works best with long term planning – that’s what you promised

If Government remains serious about the delivery of their programme to upgrade the nation’s infrastructure there needs to be a greater focus on the overall strategic programme, rather than on individual projects or programs

And another critical area of the problem is the public sector’s lack of procurement expertise.

Private sector clients manage their building programmes efficiently and effectively by repeating and learning.

They don’t insist on new terms and new processes for each part of their programme.

Their learnt experience delivers even better and better value as the programme goes on.

This is an example the public sector must follow

It’s surely not unreasonable to expect a greater degree of uniformity across individual Government departments and agencies’ procurement practices

We need a more centralised approach to the best value procurement process.

And while we are on procurement -

Public sector employees need to be guided and encouraged to make decisions using best value evaluations.

Lowest price provides an easy but usually wrong yardstick to use for project award and best value for money

Part of the industry response to Build for the Task was to look at what mechanisms would deliver best value for the nation’s money.

We found them in two major in-depth industry reports.

Latham and Egan both came to the same solid conclusions encompassing the best experience we could find.

World leading conclusions accepted by all sides of industry – Government included.

Best value not cheapest price

Principles always found in

Togetherness

Partnering

Supply chains

Co-operation not confrontation

We all know this is the best way to work.

Why then isn’t Government working this way with us?

• Local Authorities are really reluctant

• Government departments and agencies – still reluctant – are each doing their own thing

• Network Rail – God bless it, is returning to the days of competitive tendering for almost everything

We really need Government to be a best practice client - to implement

and to lead others through a cultural change; to adopt what we all know to be best practice

Let’s stop talking about it – let’s do it. Also, understand that as the major client you have significant procurement muscle. Don’t be frightened to use it to increase and improve procurement standards.

Only put on your select lists those suppliers:-

• Who have improved health and safety
• Who look after their workforce
• Who train and upskill them
• Who are improving quality
• Who are giving better value

We’ve invested all the resources to improve the products

• recognise the effort and investment

This really is vital to ensure the future development of the industry, its processes and its people, and to attract new entrants

You must reward effort, support and recognise the major improvement initiatives that companies across the industry are making.

As if all of that wasn’t enough, recent changes to the funding of construction research and development by the DTI have put at risk construction research programmes.

So its vital that DTI recognise the funding needs of construction bodies like:

• BRE
• CIRIA
• CRISP

And that ways are found to support their research and development programmes for the future.

A year ago I addressed, this meeting, with considerable optimism.

I applauded Government for its recognition that infrastructure improvement is crucial to the economic development of the country and understanding that you can’t have one without the other.

I assured you industry was gearing up to meet and deliver the needs. Well we have geared up – we’re waiting and able

But as I’ve spelt out to you, and as the report illustrates, Government’s not delivering its promised programmes – its taken its foot off the accelerator pedal. In some areas it’s even put the brakes on.

Industry’s investment to mobilise and deliver has been enormous.

We achieved a capacity uplift to match your programmed projections

Our resource developed plans are now coming to fruition at the very time that the programmes are either:-

• Effectively cancelled
• Or changed
• Or slowed down
• Or just not delivering

What a waste of our industry’s collective effort and resource

Resource that would have been much better employed on real best value, not virtual delivery

For all our sakes, and all our futures, let us get on with the job you want us to do,

for which we’ve geared up the industry. Let us upgrade the country’s built infrastructure

• Help us with regulations, don’t hinder us
• Help us with long term steady state, not stop/start, programmes
• Help us with planning processes
• Help us with R&D funding
• Help us with better procurement processes
• Help us to deliver better value

Then together we can provide the people of this country with the world class infrastructure they need and which this Government has promised them.