Recent reports and policy papers (UK construction focus)

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Read on for the highlights of some of the reports and policy papers published this summer.

The Infrastructure and Projects Authority Annual Report

The Infrastructure and Projects Authority published its Annual Report on the Government Major Projects Portfolio 2017-18 on 4 July 2018. Introduced as a chance "to take stock and look at how much we have done so far", the report focuses on the delivery of 26 major government projects over the last year and their lasting impact for the public. Those projects include the Hinckley Point C enabling project, the Francis Crick Institute and the Thames Tideway Tunnel (which featured on the BBC's documentary "The Five Billion Pound Super Sewer" (produced by TV company, Raw)).

There are currently "over 130 large, complex and innovative projects that sit at the heart of all government activity. But this is just the tip of the iceberg. [That number] doesn't include the scores of projects that are of a smaller scale or in early development, let alone the "mega-programme" that is EU Exit," (Tony Meggs, Chief Executive of the IPA).

While Mr Meggs expects Brexit to have "an impact on the broader portfolio of government projects in future", the IPA is continuing to pursue initiatives that improve delivery within the government. Matching projects with the right resources and capabilities to deliver and managing portfolio risk will be the key focus.

The Construction Sector Deal

The Department for Business, Energy & Industrial Strategy (BEIS) published its policy paper on the Construction Sector Deal on 5 July 2018. Heralded in the press release as a way to "transform construction through innovative technologies to increase productivity", this paper sets out a vision for construction. It is a vision that must clear many hurdles: from increasing the housing supply and reducing energy consumption to delivering major infrastructure projects such as Crossrail and HS2 – all while improving the UK economy. In the face of Brexit, these are not easy challenges.

The key policies include: increasing research and development investment to 2.4 per cent of GDP by 2027; investing £725 million in new Industrial Strategy Challenge Fund programmes (with an innovation focus); investing in people by creating one of the best technical education systems and investing in science, technology, engineering and maths skills; investing in infrastructure, including in electric vehicles, the National Productivity Investment Programme and digital infrastructure; rolling out the Sector Deals to improve productivity; investing in high potential and innovative businesses; improving productivity in SMEs; and creating a transforming cities fund to improve inter-city transport connections.

The Sector Deal aims to fulfil the goal set by the Farmer Review which concluded that "transforming the industry would require shared leadership by the industry, its clients and the government. This Sector Deal meets that goal, bringing together a coalition of businesses from across the sector, its clients, the government and research institutions to set out a strategy to improve the industry's performance and help it fulfil its potential to deliver wide-reaching social benefits." (See page 6 of the Sector Deal.)

The Sector Deal's specific ambitions build on "Construction 2025" (published 2013) and include better-performing buildings, lower energy use, better jobs, better value for taxpayers and a globally-competitive sector exporting more within three strategic areas: digital technology, off-site manufacturing and whole life asset performance.

As can be seen from the other reports we highlight, other bodies, including the National Infrastructure Commission and the Infrastructure Projects Authority, are already working on some of the initiatives that will help achieve the government's infrastructure goals.

A review of the government's approach to outsourcing

Following the collapse of Carillion, the Public Administration and Constitutional Affairs Committee (PACAC) has been reviewing public sector outsourcing and contracting. The committee's report, "After Carillion: Public Sector Outsourcing and Contracting," which was published on 9 July 2018, recommends a different approach by the government to the outsourcing and awards process.

The Public Accounts Committee has issued a report "Strategic Suppliers" that also calls on the government to review its approach to outsourcing. Click here to read the press release issued on 24 July 2018.

Lords' report on off-site manufacture for construction: building for change

The House of Lords Science and Technology Committee published its report on "Off-site manufacture for construction: Building for change" (Paper 169) on 19 July 2018. Lord Patel, Chairman of the Committee, summed up the report in the press release:

"There are clear and tangible benefits from off-site manufacture [(OSM)] for construction which make a compelling case for its widespread use. We heard evidence that OSM could increase productivity in the sector by up to 70%.

"The construction sector's business models are no longer appropriate and are not supporting the UK's urgent need for new homes and infrastructure. The construction sector needs to build more trust and create partnerships so that companies can work together to improve the uptake of off-site manufacture, and the Construction Leadership Council should provide the necessary leadership.

"The role of the Government and the wider public sector is pivotal in a move to greater use of off-site manufacture. The report sets out actions that the Committee thinks the Government should take including implementation of the Construction Sector Deal, committed execution of the 'presumption in favor' of off-site manufacture and a greater move to procuring for whole-life value rather than lowest cost."

The report recommends developing site implementation, digital and procurement skills for OSM in the UK labour market. It also proposes the development and publication of key performance indicators to assess whether the presumption lies in favour of using OSM on a project (and explaining why it was not used if the project goes ahead without OSM). The report points out that the government will not reach its 300,000 housing target without OSM. The government must therefore set out how extra financial support can be obtained as a way of increasing the use of OSM methods.

The government response to the report is awaited.

CITB green paper: "Migration in the UK Construction and Built Environment Sector"

The Construction Industry Training Board (CITB) has issued a green paper on "Migration in the UK Construction and Built Environment Sector". The report urges the industry and government to work together on the skills challenges arising from Brexit. As discussed at our recent seminar on this issue, the statistics summarised in the CITB's press release are stark: less than a third of employers surveyed had taken action as Brexit approaches and only 8 per cent were intending to increase training. The data collated will help the CITB, in conjunction with the Construction Leadership Council and the government, to plan how to secure the workforce the industry needs.

You can read more about what employers can do to alleviate labour shortages and workforce issues ahead of Brexit in our articles: "Impact of Brexit on the construction workforce" and "Immigration rules after Brexit could disrupt labour supply in the UK construction industry severely. What are you doing to minimise this risk?"

Project 13's report "Ripe for transformation, ready for change"

Project 13, (an initiative launched by the Institution of Civil Engineers (ICE)), launched their digital transformation report "Ripe for transformation, ready for change" on 3 July 2018. Providing a "snapshot of the UK infrastructure industry's digital maturity – its readiness for digital transformation", the report sets out six themes (customers, leadership, commercial, capability, asset delivery and asset management) from which a series of common challenges arise.

These challenges include: understanding who your customers are and what they want; embracing digital transformation as the key to business success; breaking down data silos and better understanding whole-life performance; keeping aspirations high – but getting the basics right first; and, making information security everyone's responsibility, not just those in corporate IT.

The Infrastructure Client Group (ICG) has responded to Project 13 by establishing the Digital Transformation Task Group (DTTG) which in turn responds to the National Infrastructure Commission's report on "Data for the Public Good" – with a focus both on members' strategies for digital transformation and on understanding the barriers to wider sharing of data in infrastructure. You can access the latest data available here. (This page also gives a link to the Project 13 report.)

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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