It takes time to build – why we need a strategy for construction

Of course not…

‘Milestones’, ‘missions’, ‘pledges’ or ‘foundations’ – whichever way you slice it, government’s plans are inextricably tied to the broader construction sector whether this is through unlocking regional growth, meeting net zero, building infrastructure such as new prisons, data centres and hospitals, fostering healthier communities or using a vibrant construction economy to increase tax take (for example through national insurance). In particular, our industry is being tasked with one of government’s core aims - the construction of 1.5 million homes within 5 years. With 65 million ‘core built environment stakeholders’ (i.e. you and me) there is vast potential to deliver prosperity and growth throughout the country.

Earlier this year CIC outlined some of the opportunities the new Government could take to empower the country’s economic growth, as well as enhance the nation’s health and wellbeing. The document illustrates the extraordinary scope and potential of the broader sector and touches on the cross-sector benefits that a long term, data-driven commitment to the construction industry can bring. Benefits which include saving the NHS around £1.4bn in first year treatment costs by improving poor quality homes, helping to reduce the £22bn a year expense maintain Government’s property portfolio and creating hundreds of thousands of new jobs by 2030 in low carbon sectors such retrofit. It is also estimated that households living in temporary accommodation cost councils £1.74 billion a year, something the sector can help fix in parallel with Government housing ambitions. Construction is also a huge contributor in terms of UK greenhouse gas emissions and can lead the necessary transition to a more circular, low-waste economy.

This is why CIC is calling for a deeper long-term sectoral strategy for construction with meaningful input from built environment professionals. If we are to avoid collective failures and enjoy collective success, we need to act as a collective and embed a strategy that seeks to address cultural, educational, placemaking and financial challenges to the broader construction sector. Previous plans – such as the Construction Sector Deal and 2013’s Construction 2025: industrial strategy for construction – were rather light touch, successfully identifying some of the opportunities and problems facing the industry yet making little headway on the broader cultural change needed and later highlighted post-Grenfell by Dame Judith Hackitt. A new sector strategy must essentially be a living document, offering the stability needed to encourage investment in core areas yet capable of being moulded and improved to reflect future events and innovations. It should become a springboard to productive work with the Cabinet Office and HM Treasury.

The UK is globally recognised when it comes to construction, planning and property advice. Our architects and engineering firms are world famous with extensive knowledge backed up by our professional bodies and standards. Our built environment sector retains its world-leading expertise in the development of high-quality, high-value, sustainable infrastructure such as the Stirling Prize-winning Elizabeth Line and the shortlisted Kings Cross Masterplan. The challenge for industry and government is to work together to spread these benefits across the UK, the concern currently is that we’re not, and that even since Grenfell there are too many examples where the system has failed such as Mast Quay in Greenwich, Darwin Green in Cambridge and the recent fire on Freshwater Road, Dagenham.

Only a holistic approach can tackle the main challenges around skills, productivity and economic resilience. Sadly, the construction industry continues to see the biggest number of administrations and liquidations by sector, with over 4000 firms collapsing in the 12 months to 31 August 2024. These conditions are not helpful to government’s plans in areas such as housing and retrofit, and they make it more difficult for industry to deliver and invest in skills and in innovations such as modular construction. Individually and collectively we must challenge the assumption that construction – an industry more tiered and interconnected than many – can simply ‘just sort itself out’ with minimal engagement from policy shapers. Deferring leadership now will mean that government and industry will simply be forced to intervene later out of necessity. We saw this in the case of the Grenfell Tower fire in June 2017 where a litany of industry and government failings helped enable a culture where safety, competence and compliance with the law was no longer an absolute priority. We saw this in the liquidation of Carillion which collapsed in 2018 owing £1.2 billion of debt to 30,000 subcontractors and in the collapse of ISG which held more than £1bn worth of government contracts.

Upskilling the industry is one of the most urgent challenges and at the heart of this is the fear that we will need to produce more with less. The government’s ambition to build 1.5 million homes and get 150 major infrastructure project approved contrasts with a growing skills shortage in construction that has been exacerbated by the age profile of our domestic workers – many of whom are near to retirement – and by a number of EU-born workers leaving.

A data-driven strategy for construction is essential and can help transform how the next generation sees and experiences the built environment. The next few years will be vital in terms of how we use data and move reporting further away from a box ticking exercise and more in line with the spirit of the ‘Golden Thread’ requirements being brought in through the Building Safety Act to foster a longer-term, more collaborative approach. This could also reap benefits by embedding the cost and safety considerations of maintenance deeper in Government - and industry – thinking. Improved reporting and analysis of post-occupancy data across a range of metrics presents an opportunity to raise standards in both new construction and retrofit as well as reducing energy costs for millions.

CIC stands ready to assist the government in whatever way is necessary.