Looking to the Future of Construction

Marco Verdonkschot is Managing Director at IronmongeryDirect,  the UK’s largest supplier of specialist ironmongery, here he reviews the construction industry in 2020 and looks ahead to next year.

2020 has been a year like no other, with every area of life facing incredible challenges and disruption. The construction industry is certainly no exception to that and has had to deal with unprecedented levels of cuts and job losses. However, it is ending the year strongly, so there is certainly hope for a full recovery in 2021.

The pandemic has hit the industry hard, with the lockdown causing construction output to plummet. In April, it fell by a staggering 40.2% – the highest monthly fall since such records began in 2010. However, since that drastic fall, output has increased every month. Between May and June, it grew by 23.5%, which was also a record.

While output remains down year-on-year, in September, it was only 1.8% below that in March, when restrictions were first put in place. In fact, output in certain sectors, such as Repair and Maintenance, Private Housing and Infrastructure, have already recovered to March levels, which is great to see.

As the situation has improved, the average number of hours worked has risen, which is a really healthy sign. Between July and September, the typical construction employee worked 30.7 hours a week. Since the start of lockdown, when this figure dropped as low as 26.6, it has risen continuously. This has led to rises in weekly earnings, from a low of £577 in April, to £642 in September.

With increases in the amount of new work, it’s not surprising that construction firms are starting to hire again. Between August and October, there were 27,000 job vacancies across the UK, which is nearly 240% more than between April and June, when there were just 8,000 spots available.

During the more difficult months, lots of construction companies took advantage of the government’s Job Retention Scheme. The latest data shows that £3.5 billion of claims have been made so far. With the Chancellor extending the scheme until March 2021, many will continue to rely on it, but the number has been falling rapidly since April, when over 720,000 construction workers were furloughed. In August, there were just over 185,000 people being supported by the government, which is 74% less than when it peaked.

One interesting result of the pandemic is a slight increase in the number of self-employed workers in the industry. Many people decided to set up on their own after being made redundant or realising they wanted a fresh start. The number of individuals registered as self-employed in both the construction of buildings sector and specialised construction activities rose between March and June this year, by 1,000 and 6,000 respectively.

The vast majority of these new self-employed workers are women, with an increase of 10,000 across these two areas. In contrast, there were 2,000 fewer men registered as self-employed in these sectors in June than in March, so it is definitely female construction workers leading the charge in this space.

Overall, after a really difficult year, there are definite signs of recovery, with output and job vacancies increasing, and the number of furloughed workers dropping considerably. While the rate of recovery will inevitably slow after record growth, hopefully it won’t be long before we are back at pre-lockdown levels.”

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What will Brexit mean for construction

David Vayro is Head of Built Environment Projects at Primas Law. In this feature, he looks at the benefits and challenges of Brexit, and what it holds for the UK construction industry.

Since the United Kingdom formally left the European Union at midnight on 31st January, 2020 we have been in something of a forged war. The Transition Period, which comes to an end on 31 December 2020, has meant that although the United Kingdom is no longer a member of the EU, things on the ground remain very much the same.

From 1st January 2021, however, the reality of Brexit will start to bite. This is as true for the construction sector as it is for any other branch of UK PLC. As the great pan-sectoral enabler, the construction industry will have to deal both with its own direct impacts and also with the indirect effects of Brexit on all of the other sectors into which it feeds.

Change – and there will be plenty of that – is often painful and difficult. Some of the impacts will indeed be damaging, especially so as they follow hot-foot on the UK economy’s long, slow emergence from the effects of the COVID-19 pandemic.

It is important, however, not to allow those challenges to obscure the opportunities and benefits which Brexit will present to the construction sector. As those opportunities and benefits are likely to come to fruition in the medium and long term that might not be of much immediate comfort. There are benefits and opportunities nonetheless and in the short term, their latency should help bolster business confidence, the oxygen of the construction sector.

The short to medium term challenges which the construction sector will face are not to be under-estimated. As we go to press the very distinct mood music emerging from Whitehall is that the prospects of a deal are fading. For what it is worth, the UK is briefing that the EU is trying to introduce new issues into the debate. The EU is briefing on UK intransigence around, for example, Fishing Rights and its perfidy exemplified by aspects of the UK Internal Market Bill, returning for a final time to the Commons on 7 December 2020. A no-deal Brexit would result in the UK leaving the EU without a negotiated and settled Trade Agreement and falling back on World Trade Organisation rules.

So, then, in practical terms what are the key challenges for the UK construction sector in the event of a no-deal Brexit? They are to be found in relation to two of the key Freedoms embedded in the EU, those of people and of goods:

1. Labour and skills

The UK construction sector has a disproportionate dependence on migrant labour from within the EU in relation to low-skilled or un-skilled work. Many higher-skilled roles are also occupied by EU Nationals although the proportions are much lower. Overall in excess of 28% of the construction industry workforce originates from EU Member States.

Access to those markets will be very much more difficult following a no-deal exit. EU Nationals will no longer be able to travel freely to and work in the UK and instead they will require Visas; social and healthcare arrangements will not be as straight forward and payment and tax regimes will have additional layers of approval and compliance requirements.

Not only will this add cost to the process, it will also increase scarcity of the resource, extend timelines for on-boarding and act as a practical deterrent. This would be coming at a time where, notwithstanding Covid-19, the construction sector of the UK economy is in its sixth straight month of growth enjoying filling order books on the back of a six-year high in the rate of increase in new orders.

The sector has (and continues to) shed labour in its overhead reduction efforts responding to COVID impacts but with business confidence at its highest (according to November’s construction PMI data) in a year, that strategy is going to come up against the rising demand referred to above and something will need to give.

The Construction Industry Training Board (CITB) recognises this in its 2020-2025 Strategy Document and has to concede that, in reality, there is no practical solution which is likely to be able to address shortages in in the near term.

There was never a point where the need for a coherent strategy which engages and has the support of all participants in the sector was so needed. The skills and labour shortage is a double-whammy. Under a no-deal Brexit there is both the immediate hit and the gradually increasing throttle on delivery as growth in demand activity far outstrips supply.

2. Construction materials and equipment

In an echo of its labour profile, the UK construction sector has developed a healthy appetite for importing and exporting  (64 % and 63% in 2010 respectively) construction materials and equipment.

COVID has very effectively seen to the ravaging and desiccation of the industry’s supply chains the effect being that materials lead times and scarcity are on the increase in the face of already rapidly increasing demand. Those supply chains had already evolved in large part on to “just in time” platforms taking advantage of rapid movements around the continent.

Play into that mix the additional complexities around the procurement and import of materials and equipment which a no–deal Brexit will entail and the result is a significant structural delay and additional cost. Many millions of additional Customs transactions required and queues of  thousands of trucks at the UK borders with the EU (effectively France and the Republic of Ireland).

As with labour issues, that structural delay and additional cost will be overlaying the current and continuing growth trend in construction activity, exacerbating the difficulties.

Integrated and collaborative supply chains which are technologically robust will fare least worst and the rest will either be already on a fast learning and development curve or will face an almost vertical cliff face in terms of competing in a bureaucratic, administration heavy market place with costs and demand soaring away.

3. Impact on quality and standards

The aftermath of a no-deal Brexit would see the effective unpicking of EU-wide harmony in terms of quality benchmarks and approved standards. It would no longer automatically be the case that European Standards and the “CE” mark would be acceptable contractually or technically.

The accumulation of similar structural delays and additional cost is the logical impact.

At this point it is worth remembering that amongst this litany of challenges, there are benefits of which the fittest and best prepared participants in the sector will be able to take advantage in the medium term. The foremost of these is the potential for root and branch reform of how government procures the practical manifestation of its policies and how it influences the private sector to follow that lead.

4. Public procurement regime

A no-deal Brexit presents government with an opportunity to re-calibrate public procurement processes to become drivers for growth and development in the construction sector (and in the wider Economy). That re-calibration could also be harnessed as best practice to encourage the private sector also to adopt the practice of procurement as a policy tool.

The areas of influence are obvious and chime very closely with the increasing cut through of the sustainability agenda. Examples are:

• Levelling access for SME’s to local procurement with associated local economy benefits;
• Minimising carbon miles by local materials and equipment sourcing;
• The comprehensive greening of buildings;
• Promoting local employment and skills training;
• Elevating the relative importance of social value issues as procurement criteria; and
• Whole of Life and Lifecycle costing vs. Lowest Price tendering.

In conclusion, for the construction industry there are challenges in abundance, and the current growth trend in the construction sector notwithstanding, those challenges are going to take their toll. For the fittest and the most resilient, however, there is the hope that Brexit can be the vehicle for the order of magnitude of change in public and private procurement practice which can help ensure that a post-COVID, post-Brexit construction sector is healthy, strong and effective.

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Pagabo Announce Awards for £47bn Framework

Pagabo has announced the awards for its £47 billion, five and a half year, developer-led framework which went live on December 15^th, 2020.

Acting on behalf of Cumbria, Northumberland, Tyne and Wear NHS Foundation trust, Pagabo has established a framework of 29 development companies that are capable of providing developer-led schemes within the UK for the UK public sector,

The framework features nine lots which cover three contract structures:

1. Property Development via Joint Venture and Special Purpose Vehicle
2. Long Income Lease and Lease Back
3. Property Development Single Site by Development Agreement

The lots cover a wide and varying variety of development sectors, covering single and multi-occupancy residential and student accommodation, commercial buildings, transport infrastructure and car parks, prisons and high security buildings, education, healthcare, care homes and extra care buildings and mixed use schemes.

Each contract structure is separated into three value bands as well as on a sector and regional basis to make sure the relevant developers are available to clients for the right size of project. The value bands are split into three increments and cover developments of up to and above £100 million.

In order to provide greater choice for clients, Pagabo allowed up to six core companies for each development sector under each lot in every geographical region. In addition to these core companies, three reserve companies have been named to supplement the procurement process in each segment.

The 29 development companies that have been awarded a place on the new framework (in alphabetical order) are:

• Argon Property Development Solutions Ltd
• Bruntwood
• Capital and Centric
• Community Development Partnerships
• EDAROTH
• ENGIE Regeneration
• Equitix
• Geoffrey Osborne
• Godwin Developments
• Goldbeck
• HBD
• Heron Bros
• Ion Developments
• GRAHAM Cityheart
• Kajima Genr8
• Kier Property Developments
• Lindum Group
• LinkCity
• McGoff Construction
• Morgan Sindall Consortium
• Prime
• Queensberry Real Estate
• Seddon
• Sir Robert McAlpine Capital Ventures
• Summerhill
• VINCI UK Developments
• Vistry Partnerships
• Willmott Dixon
• Yondr Group

Jason Stapley, managing director at Pagabo, said: “We have been blown away by the phenomenal interest to this new framework from the industry, which speaks to its uniqueness and potential. It will not only save time and effort when procuring a developer but will also save developers a lot of money on opportunity bidding as well – which for some larger development schemes can be more than £1 million.

“It’s been clear from recent months that government sees the construction industry as really important to our ‘return to normal’ recovery – particularly when it comes to complex development projects. This new framework will allow developers the ability to procure works through a compliant and simple to use framework, and to support the public sector with vital expansion plans, and to create a more robust sector all round.”

Jonathan Parker, framework manager at Pagabo, said: “We are incredibly pleased to be bringing this new developer-led framework to market, which will give Pagabo a unique procurement route for clients to the development market. As with all of our frameworks, the developer-led procurement option is rooted in compliance, giving our clients complete peace of mind and security, as well as the simplicity of process, speed and support we are known for.

“A unique element of this framework is the implementation of legal documents. All too often in the development market, ensuring the compliance and accuracy of documentation can significantly complicate process and make things take longer, so we have worked closely with a leading legal practice to create standard documents for clients to use as a basis to help further speed up the process.

“A great deal of our procurement success is down to our client-focussed approach. With all our frameworks we aim to simplify the whole process, ensure flexibility and provide greater choice for clients, all packaged up with OJEU compliance – and this new framework is no different in that respect. It will form another crucial part of our Pagabo’s overall portfolio, and it’s clear from the highly competitive process that our collaborative approach and market engagement has resonated with developers. This is an excellent way to round out the year, and we very much look forward to progressing the first projects via the framework over the coming months”

In order to be considered for the framework, providers were required to go through a rigorous OJEU compliant tender process, prove financial suitability and relevant experience. As well as this, providers on Pagabo frameworks are required to share the company’s passion for social value and technology.

This framework launch rounds off a successful 2020 for Pagabo, with the framework provider recently surpassing £3 billion in social value enabled via its suite of frameworks, and the launch of the second iterations of its highly successful Major Works and Professional Services frameworks earlier in the year.

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SMEs Urged to Get Involved in A303 Upgrade

Highways England is encouraging smaller companies to play their part in the A303 Stonehenge upgrade, which is the biggest road scheme to be built in the South West in recent years.

The transformational A303 Amesbury to Berwick Down scheme past Stonehenge was given the green light last month (November) by Secretary of State for Transport Grant Shapps. As well as the wider economic benefits, the project will also help provide opportunities for small and medium-sized enterprises (SMEs) locally, regionally, and further afield.

According to an independent economic assessment commissioned by local authorities and the Heart of the South West Local Enterprise Partnership, and validated by the Department for Transport, improving the A303 corridor will help to create 21,000 jobs and deliver a £39 billion boost in the long term.

On 9 December, Highways England outlined details of how small and medium-sized businesses can get involved in the A303 Stonehenge scheme at Business West’s virtual Swindon & Wiltshire Business and Economy Meeting.

David Bullock, Highways England Project Manager for the A303 Stonehenge scheme, said: “The scheme has numerous benefits, not only in improving journey reliability and enhancing the World Heritage Site landscape, but also in unlocking economic growth in the South West.

“The scheme is not just limited to larger, national and international companies, and we’re keen for local and regional businesses to get the chance to work with the project.

“With our archaeology specialists and preliminary works contractors expected to start on site in late spring next year, there’s going to be some opportunities with those companies within the next six months or so. But there will be greater potential when our main contractor is appointed later in 2021, and we’d urge businesses to get in touch now, so we can start to help them prepare”

In the meantime, Highways England is working closely with the Swindon and Wiltshire Local Enterprise Partnership, Business West and the Federation of Small Businesses, and has partnered nationally with the Supply Chain Sustainability School to provide free online training.

This helps smaller companies to upskill and places them in a better position to tender for work on larger infrastructure projects, such as the A303 Stonehenge upgrade.

Through its procurement process, the company, responsible for England’s major A roads and motorways, appoints main contractors who in turn require their own supply chain, which provides opportunities for sub-contractors and sub-consultants to bid for work and become part of the extended supply chain.

The A303 Stonehenge project team has recently awarded contracts to Osborne Ltd for the preliminary works and Wessex Archaeology for the archaeological excavation work, and in the next six months, the types of services and people required will include plant, fencing, track matting, catering, cleaning, accommodation and hospitality.

Osborne Project Director Chris Hudson said: “Osborne has significant experience working collaboratively with Highways England and local stakeholders on a wide variety of challenging projects. Knowing the benefits such projects can bring, we engage with local communities, keeping them informed as well as supporting local businesses and initiatives where possible.”

Highways England will also be hosting a Meet The Buyer event early in the new year, and this will help to outline the training available via the Supply Chain Sustainability School, including topics such as Business Ethics, Waste Resource, Sustainable Procurement and Equality Diversion Inclusion.

In the meantime, any companies interested in working on the A303 Stonehenge project are asked to register their details here. Information will then be passed to the relevant contractors.

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Can Construction Attract and Retain Talent After Brexit?

Suzanne Treen, Director in the Employment team at Walker Morris LLP, discusses the key considerations for the construction industry post-Brexit and the importance of attracting and retaining talent.

As the United Kingdom resumes its discussions surrounding leaving the EU’s single market and customs union, we can expect there to be a considerable impact on the construction sector. The industry relies heavily on migrant workers from other EU countries and the end of free movement post-Brexit will almost certainly lead to challenges for the sector, with the potential for a real skills shortage.

Inevitably, the overall pool of candidates who are free from immigration restrictions will be smaller from January 2021, when free movement for European nationals ends.  Whilst the construction sector is a key driver of jobs and economic growth in the UK, it is likely to be an industry that could be especially hard hit in 2021 and beyond. With one of the highest proportions of migrant workers within its labour force, it is vital that the construction industry prepares for the changes that will come into force after the Brexit transition deadline, to minimise the impact on its workforce and to ensure that it can continue to attract and retain the best talent.[1]

Given the inevitable increase in competition for the best people, now is the time for all businesses start to think about recruitment practices and incentivising existing staff.  Here are four things we are seeing businesses concentrate on in their HR strategy planning:

1. Re-thinking business values and culture

There is no doubt that we are seeing a greater push for businesses to give more weight to ethical and social commitments as part of the work they do. Initiatives relating to the environment, sustainability and ethical working practices are now a must for many individuals when searching for an employer, so it is important to think about communicating the positive values and culture of your business to attract the best talent for the future.

It is also essential to have genuine equality and diversity practices in place, with many businesses now opting to publish diversity data and taking steps to address under-representation, such as signing up to the Race at Work Charter.  Tackling diversity and gender imbalances is especially important in the construction industry. According to the 2018 Office for National Statistics Survey, the construction industry is made up by just 12% female employees in the workforce with only 1% of those working onsite[2], whilst just 5.4% of workers are from BAME backgrounds.[3] Confronting and taking steps to overcome these disparities could help to open up a new pool of talent for employers.

2. Consider applying for a sponsor licence

As a construction company, if you want to look outside of the UK workforce to recruit skilled individuals, now is the time to apply for a sponsor licence. The Government is actively encouraging businesses to do so in preparation for the end of free movement for European nationals from 1 January 2021.  There are now almost 39,000 UK registered sponsor licence holders, but the numbers are increasing daily given the end of freedom of movement. My advice is if you haven’t done so already, get your application for a sponsor licence in as soon as possible so that you can continue to enjoy access to a global talent pool beyond the UK market.

For employers who already have a licence, there are still significant changes to the immigration rules to get to grips with and the new rules have now been published. We explain the rule changes and what they mean for businesses more in our recent webinar that you can find here. While the aim of the new rules is to streamline some aspects of the points based system, it should be noted that there are still prescriptive requirements about who is eligible for sponsorship, stringent duties on sponsors, and significant costs involved.

3. Investing in people through training and apprenticeships

Retaining the talent you already have will be key to ensure your business is ready in a post-Brexit landscape. Training and investment in your staff not only encourages better performance and productivity, but it also signals a long-term commitment to developing your people. This could lead to more internal promotions, giving employees the opportunity to progress in their careers and boosting staff retention rates.  In addition, offering apprenticeships to encourage junior entrants, particularly in roles which focus on the development of specialist construction technology and software, can also assist with filling skills gaps.

Now is the time to create a plan for apprenticeships, particularly as the Government has increased incentive payments for apprentices hired between 1 August 2020 and 31 January 2021.

It also key to note that, in summer 2021, an unsponsored graduate route is expected to be launched in the UK allowing international students the opportunity to stay in the UK to work or to look for work after they graduate. An unsponsored route for highly skilled workers is also expected to be introduced under the points-based system, which will allow a small number of the most highly skilled workers in the construction industry to enter the UK without a job offer.

4. A focus on long-term flexible working

Whilst working from home is likely to be a default for many roles for some time, for many workers in the construction sector, this will not be possible and this is why it has been important to keep construction sites open throughout the pandemic wherever possible and safe to do so.  Many employees have enjoyed the flexibility brought by the homeworking project, and businesses with office-based roles could consider offering more flexible ways of working in the future, where possible, for the workforce in order to incentivise and retain staff.

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[1] http://speri.dept.shef.ac.uk/2020/02/19/restrictions-to-immigration-and-work-in-the-uk-construction-industry/

[3] https://www.ukconstructionmedia.co.uk/features/building-diversity-construction/

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Brexit – The Challenges for Construction

Steve Taklalsingh is MD UK Business at Amaiz. With just a few short weeks until the UK leaves the European Union, Steve takes a look at the opportunities and challenges the construction sector might face. 

In the midst of the global crisis caused by the pandemic it was easy to forget that Brexit also looms large. But now we’ve reached the deadline. As I write, an agreement is promised ‘any minute’, but until it’s actually announced I won’t get too excited. My company, Amaiz, provides a business app that’s proved popular with the construction sector. It makes it possible to manage a current account with pre-paid business card and with added bookkeeping tools (including invoicing) on the go, all from your smartphone.

We wanted to find out how ready the SMEs that use our app are for Brexit, and what key issues they are going to face. At the end of last month, we carried out research and found that:

• Nearly half (49.2%) of company leaders have already reviewed new regulations set to take force on 1 January 2021 and made changes to ensure their companies will meet them
• Only 17% of companies say they have failed to prepare

Where do you fit into this?  Below is a summary of some of the main changes that might be relevant to you and where you can go for further help.

Importing supplies from the EU:  

We will switch to rules faced by non-EU countries when importing from the EU. This means that you’ll need an EORI number (European Union registration and identification number) and will be required to submit a full declaration at the time the goods enter the country, unless they go into temporary storage. Completing a customs declaration is complicated and most are submitted electronically through the CHIEF system (you need to be registered to use it). While you can make declarations yourself, I would recommend using a specialist. It will be worth the cost.

Customs duty: The UK Global Tariff (UKGT) will (at time of writing) replace the Current EU Common External Tariff. This will apply to all imported goods unless an exception applies. You’ll need to find out the rates of duty. This can be done relatively easily through the government’s UK Global Tariff tool. However, you will need a commodity code and a product description.

VAT:  You will be required to pay VAT on imports from the EU. An existing low-value consignment relief that exempted some imports from VAT has been scrapped, and those worth less than £135 will no longer attract import VAT, which will be applied at the point of sale.

Buying or selling supplies – Standards and Certification

Brexit will have an impact in a range of areas related to product safety or eco-compliance, including packaging and labelling.  Goods sold in the UK, that require a CE mark, will need to be replaced with the UKCA mark. There is some leeway for existing stock.

Storing customers’ data

After the transition, the UK will no longer be regulated by the European GDPR but has passed its own version, the UK-GDPR to accommodate some differences (related to matters of national security, intelligence and immigration). Britain’s Information Commissioner is established as the data protection authority in the UK.  In the absence of a decision, GDPR transfer rules will apply to data coming into the UK from the European Economic Area (EEA).

Employing people

If you employ EU citizens, they will need a visa, which requires them to show they have a job offer from an approved employer sponsor. So, if you’re recruiting from the EU who need to become an approved sponsor. Existing EU, EEA or Swiss citizens working in the UK as of the end of the transition period will need to apply to the EU Settlement Scheme by 30 June 2021.

Brexit will affect the recognition of professional qualifications, which may have implications for UK staff who have to work cross-border in EU member states.

Insurance

A number of insurance requirements will change. This will particularly impact on companies whose employees have to travel in Europe for business purposes. For example, drivers may be required to carry an EU “Green Card” to take to the road and in some countries may also need an international driving permit (IDP).  The European Health Insurance Card (EHIC) will no longer cover UK citizens for healthcare in the EU and EEA and they will need to take out travel insurance to cover them for medical care abroad.

However, a business policy held with an EU insurer should not be affected.

Where to get help

The government launched a campaign to prepare the UK for the end of the transition and has provided information about what the changes means for business.  You can find extensive information and advice on websites such as the Brexit transition website.  Other forms of government support for small businesses overlap with efforts to help them during the coronavirus pandemic, and details can be found at the British Chambers of Commerce.

Several organisations also provide information, such as:

• the Federation of Small Businesses
• the Enterprise Nation Brexit Advice Service
• the CBI’s UK transition hub
• the ICAEW

The Opportunities?

There are bound to be challenges along the road. You might, for example, discover that you have suppliers who are affected more than you anticipated. Over time, these issues should be resolved.  However, I think the one thing that we can all look forward to is a more certain future. Since the referendum it has been difficult for any business to make plans as no one knew what the rules would be.  By January, good or bad, at least we will know where we stand.

Are there any opportunities or is it all negative?  At its worse, the EU did represent an additional layer of bureaucracy that was sometimes remote from the needs of the UK industry. Brexit could, in theory, speed up approvals and make decision making more pertinent to the local economy. For example, the government reported that this had a positive impact on our ability to get a COVID-19 vaccine first (as the UK didn’t have to wait for European Medicine Agency approval).  So, while you may find some avenues closed to you, there may well be the opportunity to influence what happens in the sector in a way that would have been, in practical terms, impossible when within the EU. Time to visit your MP!

Brexit and the pandemic have caused chaos but, as a famous writer put it, ‘chaos is a ladder’. Whilst most SMEs see many negatives to Brexit, I believe that the entrepreneurial spirit of the UK construction industry will also find ways to make it work. To succeed we must think positively.

You can download our report,  The Brexit Brink – Are British SMEs about to fall off the edge of Europe – or building new bridges? for free from www.amaiz.com.

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New Playbook Launched for Construction

New plans on how the UK Government will work with the construction industry to ensure public sector works are delivered quicker, better and greener have been revealed.

In 2018, public sector works contributed £117 billion to UK economy, as well as supporting more than two million jobs.

The Construction Playbook, launched on 8^th December 2020, outlines what the Government expects from these works, which range from new roads and railway lines, to schools, hospitals and prisons.

The Playbook also outlines the key role which the UK construction sector is to play in the country’s recovery from the COVID-19 pandemic, as well as in the country’s attempts to bring down greenhouse gas emissions to net zero by 2050. Green initiatives in the Playbook include promoting the use of carbon assessments to understand and minimise the greenhouse emissions project.

Other specific measures include:

• Providing greater certainty to industry through long-term plans for key programmes. This will include longer-term contracting across a range of areas, which will give industry the certainty required to invest in new technologies, delivering improved productivity and efficiency savings
• Incentivising industry to innovate by focusing on the output of what we want a project to achieve, rather than micromanaging how it is done
• Modernising construction by standardising designs and parts, as well as embedding digital technologies including the UK Building Information Management Framework
• Greater focus on building positive relationships with robust contract management between project leads and industry
• Investing more in training and apprenticeships, driving forward innovation in construction, boost productivity and focus on value for money in public sector developments

Learning lessons from the Grenfell Tower tragedy, the Construction Playbook also makes it clear that the construction sector must put safety at the heart of everything it does.

The Construction Playbook has been created following months of detailed talks between the Government and the construction sector. The measures have been backed by construction firms and business associations from across the industry.

The document also outlines how the Government will strengthen the financial assessment of all the suppliers it works with to make sure projects are delivered on time and to budget.

Mark Robinson, Group Chief Executive at SCAPE, the UK’s leading public sector procurement authority, said:

“Procurement excellence, which benefits communities and supports local economic growth, is a subject close to our hearts and integral to our clients’ decision making, so we welcome the arrival of the much-anticipated Construction Playbook. With the priority that government that placed upon infrastructure investment in 2021, the new guidance set out by the Cabinet Office will prove instrumental in the UK’s efforts to ‘build back better’.

“The construction industry faces a number of challenges in terms of driving value for money, sustainability and, importantly, ensuring that public sector projects large or small leave a legacy that benefits communities. At a time when the government’s role as a procurer has never been more critical, we welcome the clarity the Playbook will bring to contractors tendering for work across the supply chain as they look to meet best-in-practice standards of delivery and build strong pipelines next year and beyond.”

Those in the public sector working on procurement will need to radically adapt and change the way they work to support change in the construction industry and respond to the challenges faced by the country. So says Lord Kerslake, Non-Executive Chairman of framework provider Pagabo:

“Last week’s government guidance on sourcing and contracting public works projects and programmes has been published at a crucial time – when the UK is still reeling from the effects of COVID-19 and as it moves to a new relationship with the European Union.

“The Construction Playbook is a positive and powerful document with great information on how we can together create a transformation of the construction sector. This document is really important and bigger than people realise – given the size of the construction sector in this country and that it makes up 10 per cent of our economy.

“The report has some particularly positive things in it in terms of health and safety and its primacy in construction and the way it innovates. The report also acknowledges the huge importance of social value and the need to assess projects in terms of their whole life costs and procure for value. Thirdly, and crucially, the importance of digital in construction.

“The report itself features an in-depth analysis on how we move forwards as an industry and how we will take on board these really important issues.

“This is going to involve as much of a change on the procurement side in the public sector as it a change in the construction sector.

“This means a radical change in the process of procurement within the public sector to encourage and support the sector itself changing. There will therefore be the huge task of investing in training and development of the public sector here. And if that doesn’t happen, there is a risk that the sector looks to change but then finds the procurement isn’t changing to keep pace with that. It is vitally important therefore, but both construction and procurement need to work together.

“We need to ensure that the principles of the document are followed through in practice so when we talk about social value it is not a theoretical thing – but is real delivery of social value. Which means that you have to ensure that social benefits are maintained when the contract has started – not just calculated at the beginning.

“Digital technology and digitally enabled procurement and delivery could be enormously helpful in ensuring that the rest of the principles are achieved in practice.  I think that the things that Pagabo has done with its Future of Construction initiative anticipates many of these issues and it fits very well with the approach that Pagabo has taken to try and change its business.

“One issue that I couldn’t see as much about creating a diverse industry.

“The Playbook talks about delivery but more work needs to be done and more thought needs to be given to how this is done across the public sector – a huge and diverse set of organisations.

“The Playbook is important post COVID. COVID has been the focus in the construction sector and within local organisations – and of course, the ‘here and now.’ This has almost certainly crowded out the longer term thinking by government.

“But what I do see are welcome documents such as this Playbook, as well as the government’s Fairer, Faster, Green document on infrastructure and the prime minister’s ten-point plan on zero carbon. It’s all part of the ‘building back better’ agenda and now is the right time to be thinking about all of these aspects.

“The construction industry is vital to the UK’s economy and this Playbook acknowledges that – and it encourages collaborative work across the public sector and private sector. It also notes that the principles and polices in the Playbook aim to transform how we assess procure and manage public works projects and programmes.

“The document is a good guide for how the UK can deliver beyond COVID. But now we need to deliver together – and procurement is at the core of that delivery.”

David Thomson, Head of External Affairs at APM said:

“As the chartered body for the project profession, we welcome the launch of the Government’s Construction Playbook as part of the National Infrastructure Strategy. It is an excellent example of collaboration between government and the construction sector in promoting innovative, modern construction methods, to drive better and smarter delivery of projects across the UK.”

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