Improving Construction Performance

What does the Government need to do to support the construction industry and improve performance in 2017? We asked some of our key clients for their thoughts.

It is more than three and half years since the launch of Construction 2025, which sets out how industry and Government will work together to put Britain at the forefront of global construction over the coming years.

The document focuses on some key themes, all of which will need work if the targets are to be achieved by 2025. These include smarter procurement, fairer payment, improving digital skills, reducing carbon emissions, and increasing client capability.

But more than a quarter of the way through the Construction 2025 strategy, what progress has really been made? And are we missing short-term opportunities for improvement, in pursuit of this long-term strategy?

Last month we summarised the main challenges our clients in the construction sector expect to face in 2017. Now we ask how to solve those challenges – and specifically what the Government needs to do in 2017 to help improve the performance of the UK construction industry.

Targeted spending

Nigel Parrish, regional commercial manager for Tolent Construction, spoke about the importance of target spending. He said: “What we would like to see is targeted spending on infrastructure and housing. In reality we are not confident this is going to happen.”

Nigel also believes George Osborne’s Northern Powerhouse initiative is a ‘dead parrot’ – a feeling which is not exclusive to Tolent Construction of course, as this letter to Yorkshire Post shows.

Double edged question?

Paul Rawlings, managing director of Rawlings Consulting UK, said: “On one hand, Government investment in infrastructure is always good news; but it drains the underlying private sector.”

Paul voiced concerns that big infrastructure projects help push the price of materials and wages up. Coupled with the fact that most infrastructure projects are generally funded by printed money, this creates a bubble economy, he says.

“Therefore the one thing we would like to see if a more natural balance on Government-funded projects, so that the private sector can have a more level playing field.”

Review the CITB levy

For Lee Newsham, financial director for PDR Construction, there are three things the Government must do.

“Facilitate provision of quicker planning approvals by local authorities and reverse the recent Insurance Premium Tax hikes, which hit the construction sector harder than most,” he said.

Lee also highlighted the continued skills shortage in the construction industry as he believes the Government must undertake “a full review of the effectiveness of the CITB levy in achieving its goals and its value for money.”

Focus on apprentices

The skills shortage was also the biggest concern for Nick Goodson, managing director of BDB Design and Build, who said the most important thing is to focus on trade skills development – perhaps in the shape of the more historical ‘apprentice’ type schemes.

Project bank accounts

Finally Rob Ford, operations director for Sangwin, said that the best thing to Government can do in 2017 to improve the performance of the construction sector is to introduce mandatory use of project bank account for all projects with a value in excess of £500,000 – with the ‘project account’ to be administered by an independent Project Account Manager.

If you need legal advice on construction matters, please contact Anjon Mallik on 0113 227 0227 or email anjon.mallik@gordonsllp.com. For more information about us visit www.gordonsllp.com/law-services/construction-lawyers.