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Industry reacts to Construction Sector Deal

The government’s newly announced Construction Sector Deal has been broadly backed by a number of industry bodies. 

The Construction Sector Deal seeks to form ambitious partnerships between government and industry, to transform the sector’s productivity through innovation, development, and a more highly skilled workforce. Worth £420 million, the deal aims to increase the digitalisation of the construction industry, and build new homes quicker, cheaper and with less disruption.

The government hopes that this will boost its ambitions to build 1.5 million new homes by 2022, and support the Clean Growth Grand Challenge to reduce the energy consumption of new builds by half.

Both the Electrical Contractors' Association (ECA) and the Building Engineering Services Association (BESA) support the focus on more highly skilled apprenticeships, digital processes, and whole life value. The attention given to SMEs, productivity and supply chain collaboration is also welcome. However, both have agreed with the June 2018 FSB report, Chain Reaction, that more decisive and speedy action by government is needed to ensure SMEs are onboard and protected before the industry can deliver any real productivity gains.

Rob Driscoll, ECA deputy director of business policy and practice, said: “Our sector is ready to play an important role in apprenticeships, digitalisation and securing whole life value. In light of the devastating wider impacts of insolvencies like Carillion’s on industry’s capacity to deliver, fast and effective action is required to help the supply chain. 

“Specifically, we need to see government ensure that new, fairer approaches to contract and payment practices will ensure the 99 percent of industry that are SMEs are not unfairly disadvantaged, carry reduced risk and experience collaborative supply chains. We are here to help the Construction Leadership Council and government make that happen.”

Alexi Ozioro, public affairs and policy manager for BESA, said: “The whole industry eagerly anticipated the sector deal and what exactly it was going to say. Now we have it, we are broadly pleased. It is good to see government note the current business model is unsustainable and acknowledge that unfair payment is damaging the industry. Without question, the industry needs monumental reform in a post-Grenfell and post-Carillion environment, not to mention in the midst of the housing crisis.

“I am fascinated to see what the new, ‘fairer approach to contracts’ and payment practice will be. Government knows SMEs are unfairly disadvantaged, and with ready-made solutions like the Aldous Bill and other options like abolition on the table, I hope government will act sooner rather than later.”

Peter Caplehorn, Construction Products Association (CPA) deputy chief executive and policy director, added: “These are ambitious plans that will improve and modernise the construction sector, whilst providing much-needed reassurance to the supply chain as Brexit-related uncertainty continues to weigh on activity. We welcome government’s recognition of construction as one of the UK’s most important sectors, and construction product manufacturers are at the very heart of its success; with 80 percent of all products used in the UK being made in the UK, we support nearly every construction project.”

Specialist Engineering Contractors' (SEC) Group chief executive, Rudi Klein, said that the Sector Deal was now a real opportunity to address the fault lines in the industry which have tarnished its image and damaged prospects for thousands of SMEs, adding that he was particularly pleased to see some focus on promoting a more sustainable business model for the industry and on developing an industry-wide definition of value: “The Grenfell tragedy and the Carillion debacle have highlighted the dysfunctionalities in procurement and delivery especially abusive business practices and the lowest price culture which have had a detrimental impact on quality.”

SEC Group will be urging the government to set up implementation mechanisms to ensure that any changes will transform existing practice.

BSRIA chief executive, Julia Evans, added: “BSRIA welcomes this announcement as part of government’s mission to halve the energy use of new buildings by 2030 through developing innovative energy and low carbon technologies driving lower cost and high quality construction techniques.

“BSRIA has said time and time again that more quality housing is needed throughout the length and breadth of the UK, and reducing the cost of retrofitting existing buildings to make them more efficient and more sustainable is at the heart of BSRIA’s continuing strategy. Indeed, BSRIA and its members lead the way in delivering quality housing. We now look to government to make good on its promise; BSRIA members stand ready.”

6 July 2018

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