Director of Sustainability
BRE Global Ltd
The Construction Leadership Council published Mark Farmer’s independent review of the sector’s labour model. The review examines the shortcomings of the construction labour model and shows how it has given rise to under investment in training and development, innovation, and in raising productivity. Whilst this isn’t that new or unexpected, the conclusion is: we are staring at a ticking bomb and something has to change and change urgently. If we don’t take steps now – and big steps – we simply will not be able to meet industry demand.
The report came following the Government approach to the Construction Leadership Council (CLC) at the end of last year to identify actions to reduce the industry’s structural vulnerability to skills shortages, taking account of the Council’s wider work including that on business models and offsite housing.
This review was carried out by Mark Farmer, CEO of Cast Consultancy, and the final document, as quoted by the CLC ‘does not make for comfortable reading’. It is not the first report to set out the shortcomings of the sector’s labour model but its message is much stronger - given workforce attrition exacerbated by an ageing workforce, we simply cannot go on as we are, something has to change.
At the heart of the problem lies the survivalist business model – an absence of alignment between industry and client interests and a lack of incentives and means to invest. The result is underinvestment in training and development, in innovation and in raising productivity.
This largely comes down to the way we do things. We talk about change in the construction industry but when you actually look at how we deliver projects, little has changed over the past decade. Yes our sites are safer, yes there is more focus on sustainability and building performance but we still have a big demand for on-site labour. The bottom line is that in the not too distant future we simply will not have the labour force to deliver what the country needs unless we change how we work.
Farmer highlights the ‘ticking time bomb’ posed by our shrinking workforce, which it has been estimated could decline by as much as 20-25% within a decade. The bottom line is that more people are leaving the industry rather than joining. This is likely to be exacerbated by Brexit with the restriction upon the inflow of foreign workers. Can we change this trend? If we change how we work we can slow it but can we reverse it, unlikely.
One way to slow it is through education and skills and the report calls for an overhaul of training by reforming the Construction Industry Training Board’s grant funding model. BRE, through its Academy, continues to push to ensure that we upskill our workers and provide pathways for lifelong learning to keep people in the industry but more needs to be done. Farmer goes on to recommend a joined-up construction strategy pursued by the Government, construction industry and clients, again something echoed by BRE and demonstrated through standards such as BREEAM where we continue to demonstrate and share best practise.
Responding to the review, both Industry Minister Jesse Norman and Housing Minster Gavin Barwell referred back to Communities Secretary Sajid Javid’s £3bn Home Building Fund, announcement earlier this month at the Conservative Party annual conference in Birmingham. Mr Norman then goes on to say the review ‘makes a strong case for change in the industry, identifies areas where it needs to improve, and sets out areas for action. We will now carefully consider his recommendations’ whilst Mr Barwell added ‘It is vital that the industry has the skilled workers it needs to get the job done. That is why we are investing in apprenticeships with 3 million apprenticeships by 2020.’ Considering recommendations and investing in apprenticeships are steps in the right direction, as are addressing training, but if we are to heed the advice in the Farmer report it is not steps we need to take, it is leaps – and now.
So where is this ‘leap of change’ going to come from? One key area that needs to exploited is that of innovation and in particular innovation relating to offsite prefabrication. Developers such as Urban Splash and Zed Factory are pushing hard to create innovative solutions but we need the industry to really get behind offsite if we are to see a shift in the way we build. Offsite isn’t new but it’s not something the industry has grasped with both hands. The Farmer review highlighted the success of Legal & General’s new factory in Sherburn, Yorkshire. The largest modular housing factory in the world, it is producing homes through automated processes used to make cars and other consumer goods. This is a process being replicated by other parts of the industry, but not by enough and is something that BRE has been championing and demonstrating in its Innovation Park for a number of years.
The report also looks to draw comparison from other sectors by way of highlighting the need for change - ‘if you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality. Why does this not happen in construction? This is something that BRE through the housing standard review, and more recently with the formation of the Home Quality Mark (HQM) has been calling for and echoes the evidence that BRE submitted to the HSR commons committee earlier in the year.
In a time of uncertainty, it is all too easy to think of the short term and not the long. A ticking time bomb may sound dramatic but if we don’t act now it could be too late, or at least, we will make it more difficult for ourselves. What’s needed are big bold steps by the industry. The groundwork is there – innovation, quality, offsite, these are not new initiatives – but what we need is to be brave and accept that change is needed and take that leap of faith. If not, it could be too little too late.
Contributor: Martin Townsend is the Director of Sustainability for BRE Global Ltd
Director of Sustainability
BRE Global Ltd
The Chancellor of the Exchequer, Philip Hammond, will present his first Autumn Statement to Parliament next month. This is a golden opportunity for the government to set the tone for its relationship with British business, by pulling out all the stops to support investment, infrastructure improvements, and business confidence. But what are we likely to hear?
Based on the latest forecasts from the Office for Budget Responsibility for the economy and public finances, the Autumn statement will be an important glimpse to understand the direction that the Government is taking particularly for the construction industry. Announced on the 23rd November, it will be Mr Hammond’s first statement as the newly appointed Chancellor of the Exchequer. So the question is what can we expect from him?
Well he has already stated that a shift in economic policy is needed to see the UK through ‘a period of turbulence and uncertainty’. He has also come out in support of the Communities Secretary Sajid Javid who at the Conservative Party annual conference in Birmingham earlier this month, announcing a package of new measures to build more houses, more quickly, in places people want to live. These measures include the launch of a £3bn Home Building Fund to help to build more than 25,000 new homes this Parliament and up to 225,000 in the longer term; direct action to fix the housing market, using public land and £2bn of investment to encourage the building of up to 15,000 homes; and ringing forward urban regeneration and levelling the playing field between brownfield and greenfield development to regenerate inner cities.
Early indicators seem to point to a commitment to the construction industry but it is important that we see fresh thinking and new ideas and not a statement that is a rehash of previous statements from George Osbourne. What we need is something that gives the industry confidence and ensure that we see a debate driven by quality and quantity, which we may not get if you listen to the underlying currents of Mr Javid’s announcement which seem to infer the government is looking to build cheaper houses in greater density to reach its target of building a million new homes by 2020.
We also need to think long term, not short. Sustainability, with energy efficiency being a prime motivator, needs to be front and centre. When talking to a well- respected architect and developer in the housing sector, their response was a simple and clear one - all new homes need to generate at least 70% of their energy demand from onsite or near site solution. The question is how are we going to achieve this without any mandate?
Although there has been a heavy emphasis in the past on large scale infrastructure projects, there will need to be investment and faster sign- off of projects which give rapid delivery, to take us through the more immediate period of uncertainty and to build more confidence in internal markets. The Home Builders Fund will provide £1bn of short term loan funding that will be used for small builders and custom builders to deliver 25,500 homes by 2020 but it will also include £2bn of long-term funding for infrastructure. So fingers crossed, major infrastructure investment will continue.
However I believe that key to driving this success will be the new industrial strategy. Business Secretary Greg Clark stated that a successful industrial framework ‘has to be local’ and warned that ‘for too long government policy has treated everywhere like it is identical’. This is something that was reinforced at the recent Telegraph Britain’s Smart Cities conference where the strong message was that change, innovation and reform was being driven at local level, often under the radar.
BRE has argued that for a new industrial framework to be successful we need to ensure that any strategy drives UK innovation. A process of driving innovation and market transformation has been at the heart of BREEAM, BRE’s internationally recognised measure of sustainability for buildings and communities, for many years. Innovation is one of the UK’s strongest assets and in a time of mass uncertainty, we need to remind everyone of just what we are good at and what we can achieve.
Next month’s statement is a chance for the Government to restore some stability and set out a long term, robust plan. The question is what is the plan and we will see what I believe are the fundamental attributes of quantity, quality and innovation.
Time will tell.
Contributor: Martin Townsend is the Director of Sustainability for BRE Global Ltd
Lead Technologist - Built Environment
I would like to think that this image (left) has captured this young persons elation as he realises his idea has been recognised as the "best" and that this presents a springboard to a career as scientist or engineer.
Does the construction sector have the potential to engender such a response in the younger generation?
He was a winner at the TeenTech Awards this summer, and it was my pleasure to hear an inspiring presentation from TeenTech Events CEO, Ms Maggie Philbin (yes the owner of ludicrously big hair do's in the 80's and who brought us great insight in to tomorrows technology). Since 2008 Maggie has been running this NFPO TeenTech, which helps young teenagers see the wide range of career possibilities in Science, Engineering and Technology.
Maggie's presentation was given as the key note speech for the CIC's Construction Industry Summit 2016. Maggie captivated the audience with her insights on how to engage with and recruit tomorrows talent. Communication is clearly a big challenge - not only in terms of the content but also in the method.
Tomorrows talent pool will be quite adept at digital communication - my return from the summit sat me adjacent to three teenagers, who spent much of the train journey texting each other instead of speaking. But Maggie advised that simply having a glossy website and hoping they will find you was not likely to succeed. First you need to capture their interest in what is the possible, what does it offer them - and most of this direction comes form their parents. Then they will research and find out more - most likely on line. As an industry we need to do better in showcasing what we offer - digging holes and wearing hi-viz are a definite turn off. Being creative, making a difference, working in dynamic project teams, being respected and well rewarded - these are appealing and as an industry we need to convey this.
Maggie's advice was:
- Make tech roles visible and better understood
- When recruiting seek the key qualities needed for the future [see below]
- Align your CSR activities with your company business
- Set up on-going relationships with local schools, colleges and universities to provide work experience and work placements
- Offer quality apprenticeships – collaborating where necessary to offer a wide range
- Become a school governor
- Sponsor as well as mentor
- Volunteer with organisations like TeenTech, Code Club, WISE
Maggie advised that progressive companies are seeking more than just academic qualifications from their next generation of talent, they see the following as key qualities:
- Bold thinking
- Life- long learning
Finally, I am a volunteer mentor and judge with TeenTech. In my day job I undertake assessments of applications for investment for a wide range of organisations. I can honestly say that being a judge for TeenTech is every bit if not more rewarding - freed from naysayer constraints, the teams creativity, innovation and drive is inspiring. I was privileged to review a wide range of ideas to solve our grandest of challenges. Whilst some may well have been flights of fancy or defied the laws of physics, others were near market ready and one I would have happily returned a cheque with my assessment for an equity share! Who couldn't do with some of that sort of talent in their organisation?
Mark Wray, Innovate UK, National Platform for the Built Environment, Innovate UK (Technology Strategy Board)
CIC Yorkshire & Humber Chair
Architect, Pearce Bottomley Architects
It was in horror that we watched last year’s events unfold in Paris. Places of apparent safety - a restaurant, a music venue - became unsafe; a city violated. We may think that the impact of a troublesome political climate is a relatively new thing, that it is really only now that we feel unsafe, insecure, paranoid even, whilst going about our daily business. Yet is this really the case? Medieval Britons would think twice before venturing far without being armed to the teeth. Georgian homeowners would literally nail themselves within their property. It is the threats - and perceived threats - that have changed.
And we are not just referring to the impact of contemporary terrorism on our built environment - it is also about safety. Creating places that feel safe at all times of the day is crucial to the success of a neighbourhood, resulting in reduced crime and increased business. It can attract investment, people and culture. Indeed a little anarchy can be a good thing for an area, cultivating alternative thinking, artistic endeavours and literary inspiration. A counter-culture can be good for business - just look at New York’s Meat Packing district or Brixton. Unfortunately safe places = terrorist targets. Boston, for example, is consistently voted as being one of the safest cities in the US, although this illusion was shattered during the Boston Marathon, giving rise to the question as to whether a balance can be struck between ‘safety’ and ‘security’. It would seem this shift in the balance is only temporary. Cities are amazingly resilient - largely due to its people who rebelliously will not hide, but also the buildings, infrastructure and public spaces that continue to endure.
Many of our cities developed because of their defensive position. Whether a small city like York or a metropolis like London, the very existence of these conurbations is due to their foundations as fortifications. The quaintness of Yorkshire market towns like Richmond or Knaresborough belive the once strategic importance of their associated castles, but these fortifications influenced how our cities developed and in turn shaped our society, becoming places of safety in turbulent times. How things have changed. From the blitz, the threat of nuclear war and alternative tactics from terrorist organisations have made these urban areas look less like refuges and more like targets. How has modern day urban planning responded to these new challenges and is there a way that we can learn from past defensive design to bring sanctuary back to the city?
There is a great deal of research on how the creation of spaces that give residents and users a feeling of sanctuary, reducing crime and anti-social behaviour. However it would seem that this theory is taken to the extreme; that rather than creating urban design that engages people, some local authorities and developers are keen to ‘design out’ certain activities, and ipso facto, certain people. Whether it is the anti-loitering "Mosquito" device, anti-skateboarding studs or benches that prevent any other use other than the act of sitting, urban spaces are becoming less about inclusive design and more about defending our cities from the homeless, ‘anti-social’ youths and feral pigeons. What are the consequences of such design? How can we design urban spaces that are all embracing to the wider society in which we live, yet remain safe and welcoming?
Is the Internet of Things possibly the future of the industry, and the development of the concept of intelligent buildings is leading to significant shifts in the way buildings are designed, operated and used. From the designers, constructors and users, everyone stands to benefit from the optimisation of space, energy efficiency and connectivity, whether a workplace or home, changing demographics come with increasing user expectations of modern and flexible space design, improved comfort, productivity, and pervasive connectivity. Sounds great, but the downside is that the greater the reliance on digital technology, the greater the chance of the building - or elements of - being hacked. Can terrorists turn out the lights out of a city, can a burglar hack into your security alarm, can your kettle turn against you? Is this the future or will there be a revolution against the digital age?
Maybe the armed forces can help solve some of the challenges. The armed forces have incredible skills in design and engineering; skills used to overcome some extraordinary circumstances in places of extreme danger. These skills, developed in response to defending security, can be used to overcome peacetime problems. Whether in the aftermath of earthquakes or, as the Boxing Day floods demonstrated, the army’s skills in design were indispensable in keeping communities together and society functioning. However, can these skills be used for more than emergency situations, when all other options have failed? Are there innovative solutions that the industry can use as a matter of course?
I realise that I have introduced more questions than answers, but that, I think, is because there is no single answer in creating safe and welcoming spaces. Indeed it is questioning what has been done and how we can work together in the future that is the basis of the Construction Industry Council’s sixth annual Yorkshire & Humber conference.
The aim of this day is to explore the ways in which our built environment has developed and continues to develop strategies that respond to safety and security risks, and questions how we, as construction professionals, can work together to create safe yet welcoming spaces. What this conference is not about is bomb blast bollards, barriers and anti-parking paving, but rather an interrogation of new threats, what we can learn from past threats and what we can do to defend the future.
For further information on the conference please click here.
Contributor: Stefanie chairs CIC's Yorkshire and Humber regional committee and is an Architect at Pearce Bottomley Architects in Leeds.
I studied Engineering at Cambridge University for four years, and the top mark in our first year was won by a girl. I stopped paying attention to the league table after that (because I discovered comedy – which involved a lot more self-gratification, and a lot less trigonometry), but I think she may even have claimed the title two or three more times.
Throughout my school years, my academic rivals in Maths and Science were almost always girls. And with a doctor mother and a (now) lawyer sister, I was never by any means the top professional at home either. So the idea that girls/women/counter-men (whatever you want to call them) were in some way inherently less interested or capable in Maths and Science came to me as something of a surprise when I was made aware of it in my teens.
It was a surprise because it’s simply not true. Scientific aptitude knows no sex, although many of us are still brought up subscribing to traditional gender roles. It starts early, with boys’ toys including building blocks and construction vehicles, and girls’ toys consisting almost entirely of baby dolls, mini ovens and other forms of Mother-PracticeTM. Boys are taught to be effective and practical above all else, while girls, to be compassionate and humble.
Now, construction and comedy are rarely mentioned in the same breath, but in the case of gender equality there are distinct parallels. Both have historically suffered a startlingly similar image problem – i.e. “NO GIRLS, CHEERS”. Men build the bridges that the women may walk over them, and men tell the jokes that the ladies may giggle, their hysterical humours revitalized, ready for another busy day of blushing. This perception is thankfully changing in comedy. An industry that was once the preserve of men is now beginning to be dominated at the top tier by women; the current charge led by the likes of Katherine Ryan, Bridget Christie, and Sara Pascoe. Women are also coming to match – and in some cases surpass – men in the areas of comedy production, commissioning, and talent management.
As Maths and Science continue to be popularized in mainstream culture, and as interest in them is gradually stripped of its nerdy, male monopoly, a gender shift similar to comedy’s is bound to happen in engineering as well. Not just in construction, but in all the engineering disciplines: mechanical engineering, chemical engineering, computer engineering, and whoever it is that makes singing birthday cards.
The battle is not yet won, though. As long as the country’s main touchstone for female mathematicians is Countdown, there will still be work to be done. But if more young women can be encouraged to let go of the baseless assumptions of what a woman’s career is, and take up the set square instead, they might just solve an industry-wide gender imbalance and a national skills shortage in one fell swoop. Classic multitasking.
Who knows? We may even see a day when female builders shout crass sexual innuendos at men in the street. It’s unlikely. But a Wang can dream, can’t he?
Contributor: Phil Wang is a British Chinese stand-up comedian who is also a member of the British sketch comedy group Daphne.
Phil will taking part in a panel debate at the Construction Industry Summit as part of the Construction Youth Trust breakout event #notjustforboys
Built Environment Skills in Schools (BESS)
Construction is a robust sector, literally and metaphorically, and we have overcome many challenges before. I can only imagine that this is why we've never reached a pain threshold that compels us, as a united sector, to tackle the skills gap. I'm no economist, but rumours of a post-Brexit mini recession (source: Construction News, 27/7/2016) do suggest it is so important that we take responsibility for the skills gap - each and every one of us - right now.
Complaining about the skills shortage is easy (and a definitive sign that we still haven't yet reached an adequate pain point), and the barriers to action are real and significant – shortage of time, resources, staff turnover, and capacity to name a few. On the face of it, that doesn't even make it sound like a very appealing sector to join. In fact from 2013 to 2014, favourability of the industry fell for both parents and young people (source: CITB).
Nevertheless, results from CITB's review of the Young Apprentice Programme indicate that only 10% of construction employers had engaged with schools for career-related activities. 10%! No wonder children don't consider construction to be worth their time (34.6% in 2014, down from 38.2% in 2013).
75% of construction employers found young people lacked understanding of the construction sector, and 82% of teachers didn't feel that they had the appropriate knowledge to advise pupils on their careers (source: IFF 2015). I don't think it would be too much of a leap to suggest that those statistics are related. We are perpetuating the cycle of poor awareness and low desirability, and possibly even increasing the damage by presenting a disjointed, patchy, sporadic, siloed sector.
Could this all be because construction has traditionally been a male-dominated sector? We all know that male traits lean towards competition rather than collaboration. Yet collaboration is still the buzzword at every event, roundtable, networking breakfast and press briefing. Perhaps we're just making the concept of 'collaborating' really hard on ourselves. Or we're waiting for someone else to collaborate for us?
Naturally, all this is important as the skills gap has an impact on our existing requirement to build (particularly housing), but it also has a massive impact on each and every one of us as individuals - the homes we live in, the buildings we work in, the infrastructure we rely on – and at a socio-economic level, with the prevalence of anti-social behaviour, disconnected communities, and low-level mental health conditions.
So, I suggest we collaborate on finding ways to collaborate.
Think about the resources and skills you have in your own organisation. It could be a good-sized meeting room. Or PPE in lots of different sizes. Or transport, or access to site equipment, or software licenses, or demonstration facilities, or strong social media channels, or enthused staff. Or something completely different.
Now pick up the phone or draft an email to someone else in your supply chain and ask them what kind of problems they face in trying to engage with education. Then talk to people involved in addressing the skills gap alongside education, as they'll be able to help you navigate around those problems. (It’s what we do, and we're a great source of advice!) And together you can come up with powerful ways to support each other, create more consistent engagement, and fill some of those outreach gaps.
Once you're taking collaborative action, you might want to introduce some metrics to measure the effectiveness of your efforts. It could even be that someone else in your supply chain is a wizard with metrics – what a great way to get them involved and increase the collaboration!
If you're not involved in addressing the skills gap as an individual, I urge you to take action. Talk to your colleagues, discuss ways forward and be part of the solution. If its something your company already does, that's great too, but what are you doing personally? At the risk of sounding like a cliché, if you're not part of the solution you are part of the problem. Nobody is going to do this for us and now more than ever the impact of the skills gap will be felt across construction.
And when you arrive at the Grange St Paul's Hotel for the Construction Industry Summit in September, and you're ready to work the room, perhaps consider using this practical collaboration approach as an ice-breaker.
Contributor: Kathryn Lennon Johnson is a behavioural change specialist and founder of 'Built Environment Skills in Schools', a nationwide platform established to connect all the dots of skills and careers engagement in construction using experiential tools like gamification, simulations, virtual and augmented reality, apps and social media.
Kathryn will be speaking at the Construction Industry Summit as part of the Delivering the Future’ Session.
Head of Digital Research & Innovation
Balfour Beatty UK
The idea of a smart city is to combine inter-connected networks of people and ‘things’. Inter-connected networks are already a well-established technology; it’s the internet! We have already witnessed the dramatic impact of connecting nearly 3.4 billion people through the internet, affecting governments and societies across the globe. Hal Varian, Chief Economist at Google said in 2013 that there are no technological barriers to placing all of the world’s information in to the hands of everyone. The only barriers that remain are legal and cultural.
What is a smart city anyway? The UK’s Government in 2013 explained that the concept is not static and an absolute definition hasn’t been made. However, it does explain that a smart city mimics the innovation that has happened in the consumption of private goods and services over the internet. The disruption of the music industry is a good example, moving from selling physical to digital records.
Consumers have been empowered by the internet via platforms like Amazon and Tripadvisor, where decision making is supported by consumer reviews of products and services. Smart cities aim to do the same with public services, such as hospitals, schools and transport integrated with private services (imagine your fridge telling your local shop to hand you a pint of milk at the train station as you pass on the way home). The ultimate objective is to place decision making in to the hands of all consumers of public and private goods and services by providing real time information and analysis. This is what the CIC BE2050 report described as the “smart social-political process” and is what will shift the foundation of our political landscape.
The EU Referendum highlighted the sorry state of our [society in general] ability to use data to present important political arguments. However, regardless of the result it presents an opportunity for us in the construction industry to show that a truly smart city requires a foundation of information fed from the built environment via the internet of things in order to surface the truth about the use of our built environment.
But how does an ‘internet of things’ address this issue? This is where we look to the manufacture of jet engines and the circular economy. Rolls Royce celebrated the 50th anniversary of offering power-by-the-hour in 2012. Instead of selling a commodity (in this case an engine) Rolls Royce sell an output of engine power per hour. Instead of selling a product, they sell a service. Rolls Royce tracks all their assets in real-time using an internet of things style approach. Primarily it demonstrates the delivery of their contractual obligations with airlines but also ensures maintenance is completed in the most efficient way. Interestingly, this also incentivises the design of the engines to be efficient over their whole life, not at the point of sale of the engine to the airline in the traditional jet engine market.
Is this starting to sound familiar? If the construction industry was to embed sensors in to our assets, could we deliver a more efficient product? Could we deliver a better service to the users of the built environment?
However, is it sustainable to embed technology in to everything? Will the cost in energy and materials of the smart city be outweighed by the benefits? The charging of mobile devices has a negligible impact on our energy bills. However, the energy demand of streaming services that require cloud computing from these devices is massive in comparison and a potential hurdle for smart cities. The collection of data from the sea of sensors on the Internet of Things combined with the information from the Internet of People is known as Big Data. The computation of Big Data in to useful insight requires a great deal of computing power from data centres. As this technology scales, it presents an ecological challenge for data centre design.
A final challenge for smart cities is security. In 2015 Ukraine was victim of a hack in to their national power grid as 80,000 of their citizens were plunged in to darkness. This represents a tangible threat to the welfare of citizens. However, there is also a less tangible threat to the occupier of these cities, consumer protection. Apple’s terms and conditions are famously longer than Shakespeare’s Macbeth and highlights that our personal rights require modification when participating in a smart city. I personally believe the aggregation of our personal data is greater than the sum of its parts, requiring a profound shift in our urban culture to be successful.
My challenge to industry is to think about how we deliver value in an IoT world. What do our businesses look like if we shifted our delivery from outputs to services? I want to see our industry take a lead in building the digital foundation of our smart social-political process, and lastly I want our industry to be proactive in developing consumer behaviours when designing, building and operating digitally connected buildings and infrastructure.
Contributer: Neil Thompson is the Head of Digital Research & Innovation for Balfour Beatty UK and Chief Executive of dotBuiltEnvironment, a network that promotes digital adoption across the built environment
Neil will be speaking at the Construction Industry Summit as part of the 'Smart Cities, Open Data - a data driven future' Session.
Speaker, contract strategist, lawyer
500 Words Ltd
Ever since corporations decided to reduce the costs of procuring construction projects, there has been a trend towards standardisation of processes, contracts, laws and regulations. The first industry standard form (heads of conditions for a builder’s contract) appeared in 1870 and the first engineering contract (the model form for electrical works) followed in 1903.
Fast forward nearly 150 years and the construction industry is unrecognisable from its 19th century predecessor. We are ‘blessed’ with a cornucopia brimming with standard form contracts, designed (allegedly) to meet the needs of the UK construction industry.
But do the cross-industry boards, drafting committees of professional bodies, or sponsoring law firms publish contracts that actually meet the needs of 21st century businesses? Do we have contracts that are fit for today’s purposes? Do they reflect human-to-human selling, fast global procurement methods, electronic information sharing and storage, and collaborative project strategies based on trust? Or are we just stuck in the dark ages?
Familiarity Breeds Laziness
Although our standard forms are regularly updated, and new forms heralded with fanfares (before struggling to gain market share), we rarely see fundamental shifts in drafting philosophy, style and tone of voice, or usability. The only thing we can be sure of is that each new edition will be longer than the last!
With over 140 standard forms of construction contract, the market is dominated by contracts of staggering complexity, sprinkled with legal phrases and jargon, and a veritable plethora of options, annexes and supplementary sections. Together these create an almost impenetrable barrier to new users. Many organisations stick with their favourite contract - lazily clinging to the familiar, rather than adopting a coherent contract strategy that meets their business’ needs and values.
Contracts or Trust?
Refusing to budge from the contract with which you are most familiar is not the same as actively choosing a contract based on trust. Users tend to justify this ‘strategy’ by saying “well, the contract hasn’t gone wrong so far”, which is hardly a ringing endorsement. One reason for avoiding change is mistrust of other standard forms. If you’ve never used a contract, then with up to 100 pages and 50,000 words, the learning curve for knowing how to use it properly is too steep. Frankly, unless it’s a deal-breaker, why would you even contemplate it when the other contract provides no guarantees of being more effective?
20 years ago, a whopping 58% of the construction industry said standard forms encouraged conflict and 38% said they created mistrust (Latham Report 1995). My 2015 Survey showed that a pitiful 14% of contract users said current UK standard form contracts create trust.
This does not bode well for the Government’s Construction Strategy 2025 with its aim of a strong, integrated supply chain thriving on productive long-term relationships while simultaneously lacking trust in each other!
It is self-evident that you should not enter into a contract with a company you don’t trust. So should you demonstrate your trust in your project team through adopting complex or simplified contracts?
There are essentially two opposing approaches to how to create contracts: one is characterised by low trust where the contract acts as a safety-net. This sort of relationship requires the standard form to comprehensively cover every possible angle, tie up every loophole and create a knot of clauses to ‘save the parties’ in the event of a dispute. The project team trusts the contracts to provide the answer.
The other approach is characterised by high trust where there is a simplified framework of terms, on which the parties hang project specifics
2. The contract does not have all the answers, enabling and encouraging the project team to trust each other and to solve issues which arise, within a clear framework.
Supporting Long-Term Relationships
The best ways to create long-term relationships is to adopt a collaborative ethos (reflected in processes and contracts) and to avoid disputes which damage those relationships.
Despite years of toying with terms to refine and improve them, each Annual ARCADIS Global Disputes Survey demonstrates that the most common cause of construction disputes is a failure to administer the contract. The other causes listed – incomplete contract, failure to operate specific procedures, incomplete claims – also arise from the users being unable to use the contract effectively.
To use a contract (and its procedures) accurately and effectively, it is critical that you can read and understand the standard form. However, our current standard forms positively discourage you from reading them, dissuade you from understanding them, and make it impractical (if not impossible) to use them.
Surely developing processes and contracts that help avoid disputes should be on everyone’s urgent and important to-do list?
Perhaps the solution is to tear up the rule books and the lengthy standard form contracts, and start with a large dose of trust. We can then decide the strategies, processes and contracts we need for a 21st century industry.
Constributor: Sarah is a professional speaker, trainer and contract strategist. She helps construction professionals to write simpler contracts, so they can build trusting relationships and avoid disputes. www.500Words.co.uk
Sarah will also be speaking at the Construction Industry Summit as part of the 'Working with the Enemy – Sharing, Collaboration & Trust' Session.
1 - 10% of respondents said the same contracts create mistrust!
2 - This is how the engineering model forms in engineering were intended to be used as the publishers recognised the huge array of project differentiators could not be accommodated in one standard contract.
Scheme Ambassador and Former Chairman
Considerate Constructors Scheme
Ensuring the legitimacy of the workforce is one of the key challenges facing the construction industry. Employing illegal workers isn’t just against the law; there is an undeniable relationship between illegal workers and those subjected to modern slavery.
The statistics speak for themselves: the National Crime Agency has pinpointed the construction sector as the sixth most prevalent for labour exploitation; and in 2013 the government identified 53 “potential victims of modern slavery” within the industry.
What everyone is clear about is that it is very damaging for those individuals concerned, and the industry’s image as a whole. This can lead to widespread reputational damage at a time where portraying the industry in a very positive light is critical to attracting and retaining skilled workers to meet the pipeline of future work.
As the Government’s recent actions have demonstrated - with Operation Magnify starting last autumn and the Modern Slavery Act being applied from 1 April 2016 - there is growing pressure on the Industry to make sure that all of the checks and balances are in place to assess and monitor their workforce.
But valuing the workforce by ensuring their legitimacy to work shouldn’t just be a ‘kneejerk’ reaction to the Government’s latest actions - it should be part of the day-in, day-out routine of every element of construction activity throughout the UK. To help this become a reality and continually raise standards in this area, the Considerate Constructors Scheme introduced a new question in its Monitors’ Checklist earlier this year; specifically challenging constructors registered with the Scheme on ensuring the legitimacy of their workforce:
How does the site assess and monitor the legitimacy and competency of the workforce?
This question challenges contractors and their supply chains to take greater responsibility for the way they recruit their workforce. It requires a structure to be put in place which ensures that suppliers and subcontractors provide evidence to show they have effectively assessed the legitimacy of the workforce.
By challenging sites to explore how they currently assess and monitor the legitimacy of their workforce, the Scheme believes that in the not-so-distant future, all registered sites, companies and suppliers will have a routine in place. This will ensure that when they are questioned by the Monitor, they will provide a ‘standard’ response, intrinsic to their organisation.
The Scheme is in a prime position to effect real change amongst the industry and it is great to see that the CIOB’s CPD module ‘Stamping out illegal working on every site’ includes a question about the new Checklist.
Sites, sub-contractors and suppliers should establish a transparent culture whereby workers feel able to highlight to management when they have concerns over colleagues.
The recent recognition from the Government in how the Scheme is helping to tackle this issue also underlines the impact the Scheme will have. Immigration Minister James Brokenshire said: “Our work to stamp out illegal working involves close collaborative working with lead industry bodies. We are fully supportive of genuine efforts, such as this scheme, to drive compliance with the rules.
“Employers within the construction sector have a crucial and ongoing part to play in helping combat illegal working by ensuring they carry out the straightforward ‘Right to Work’ checks on potential employees.”
As ever, the need to continually drive improvement and progress within the industry means that much more still needs to be done.
While this is the case, it is really important to highlight that there are numerous examples throughout the Industry of tremendous improvements which have been made over the last decade in how construction values its workforce. Those registered with the Scheme [see Best Practice Hub for examples] have made significant progress in terms of establishing a supporting and caring working environment, by:
- Providing a workplace where everyone is respected, treated fairly, encouraged and supported.
- Identifying personal development needs and promoting training.
- Caring for the health and wellbeing of the workforce.
- Providing and maintaining high standards of welfare
Now is the time to tackle illegal working on sites. There has never been a better moment for the industry to rise to the challenge and ensure that checks for workers’ legitimacy become firmly entrenched within all construction activity across the UK; once again underlining that UK construction is at the very forefront of best practice.
Contributor: Robert Biggs is a Scheme Ambassador and Former Chairman for the Considerate Constructors Scheme.
Association for Project Safety
Earlier this year, at the Association for Project Safety (APS), we proudly announced the launch of our ninth National CDM and Student Designer Awards. With the deadline (31 May 2016 ) for final entries looming, I thought I'd take this opportunity to tell you a little bit more about the awards and why, if you work in the Design and Construction Health and Safety sector, you should consider entering too.
Before I get on to talking about the prestigious event, let me first tell you a little more about APS and what we do.
We're a professional membership body that offers guidance and support to 5,000 Members across the UK, in all areas of Construction Health and Safety Risk Management. In fact, APS members are amongst some of the country's leading architectural, engineering, health and safety, project management and surveying professionals. Our members are all required to maintain their skills, knowledge and experience by undertaking Continuing Professional Development programmes each year, which means APS members are some of the UK's most trusted, leading experts. We're members of the Construction Industry Council (CIC) too.
We strive to continuously improve and promote professional practice, and our ninth annual National CDM and Student Awards will showcase the exceptional work happening in our industry. They celebrate both current and future members of the Design and Construction Health and Safety sector, by rewarding examples of good practice, and providing people in the industry with a benchmark of success to work towards.
Of course, although we are responsible for organising and hosting the awards, the National CDM and Student Awards are open to both APS Members and non-members, and so I'd strongly encourage you to enter.
With nine different categories to enter, our awards are one-of-a-kind. There are so many different award ceremonies and events within our sector for people to enter, however, these awards often only recognise the importance of Design and Construction Health and Safety through perhaps one or two dedicated categories. Yet the purpose of our awards is to only recognise the important role of Design and Construction Health and Safety plays through each and every category - our National CDM and Student Designer Awards really are unique.
Entries are now open and will close on Tuesday 31 May 2016, with the short list of successful entries being announced in early September – so don't delay as there isn't long to go before the deadline.
Judging will take place over the summer months by an expert panel of industry figure-heads, including the Health and Safety Executive. With such a vigorous judging process, you can be sure that if you win, your work is of the very highest standards and is quite rightly something for you to shout about!
The award ceremony itself will take place on Thursday 27 October at the Radisson Blu Portman Hotel in London. The awards event promises to be bigger and better than ever before, with a high profile speaker, dinner, dancing and entertainment too; we look forward to welcoming our Members, as well as meeting some new faces at the event in October. It's going to be a great night.
And as if attending the awards evening wasn't celebration enough, all shortlisted entries will be invited to an exclusive reception at the House of Commons on the afternoon of the awards evening. Attending the event will be MPs representing the constituencies of the shortlisted candidates and Parliamentarians with an interest in the work and reach of APS across the UK.
If you'd like to submit an application, you can do so online via our website free of charge. If you'd like more information about the awards, visit www.aps.org.uk/how-apply or call the team on 0131 442 6600.
We really do hope you'll take this opportunity to celebrate success with us and we look forward to seeing you in London soon.