Sign of the times: the big three challenges for the construction sector
Graham Watts OBE
Chief Executive at Construction Industry Council http://www.cic.org.uk/home/index.shtml
Post date: Friday, 13th April 2012
Graham Watts OBE, Chief Executive of the Construction Industry Council, talks to Anthony Woodburn and Building Control & Development Services Magazine about the big three challenges for the construction sector: how it’s run, reducing carbon and the economy.
Graham Watts was appointed Chief Executive of CIC in October 1991. Representing the interests of more than 300 different niche groups and organisations has been a difficult job at the best of times, he said: “It is a difficult industry in which to create unity because it is so heavily fragmented. I have been involved in the industry since the late 1970s, and I suspect that today, in 2012, it’s even more fragmented because of the rise of different specialisms, technologies, and products.
"And it’s even more difficult to define. We regard the industry as a cyclical industry rather than a linear process; it’s not just from planning and design of a building to completion, it’s actually the ongoing life of that project. If we take that breadth of definition then it’s an absolutely huge industry, bigger than anybody gives it credit for.
"Gaining some recognition for the importance of the built environment and maintaining an effective built environment while getting the industry to somehow be the sum of its parts, with each of the parts looking to be an individual entity, has probably been CIC’s biggest achievement to date."
At the sharp end
One of the biggest challenges facing the construction industry today is changing the way the industry operates, continued Graham: “At the one end you have got highly sophisticated companies working across all sectors … and then you gradually drift through the layers and right at the other extreme you have got the cowboy builders who don’t even have an address.
“The trick is to eradicate the rogue traders, and that is obviously a massive issue, and get the ‘bona fide’ part of the industry, that pays its taxes, employs its people properly, pays its bills, has properly qualified people, all up to speed to deliver tomorrow’s construction projects in the best possible way. There is no doubt in my mind that that is through a better arrangement in terms of the exchange of information and BIM is at the sharp end of that.”
He explained: “All the case studies that I have seen show me that there is a massive amount of savings in terms of time and cost without impinging on the quality of the output in terms of the constructed facility by implementing even Level 2 BIM.”
Graham concedes the government’s decision to procure all construction work through BIM for projects over £5 million by 2016 is a big ask: “First of all you have to make sure that all the people that procure construction work in the public sector, that’s several thousand people, are up to speed in terms of the expertise they need to have the capability to procure through BIM. On the other side, you have got to make sure the industry has got the skills to deliver.
“Although 2016 is fours years away, it’s still a huge job but I am quite confident that it will happen because I think the market is very resilient in these ways. The expertise is there and it will have to absorb it, otherwise the work will be left to those companies who do have the capability.” Graham also acknowledges BIM concerns within the supply chain. “The construction industry has, and probably always will have, a long supply chain of specialists that have to be involved, but what they have been seeking for a very long time in terms of fair payment, greater integration, greater involvement at an earlier stage in the project are all axiomatic with BIM, so there is so much to be gained by these companies further down the supply chain, so they should see it as an opportunity and not a threat.”
Carbon reduction remains a big issue for the industry and one the government’s flagship initiatives, the Green Deal, has been dogged with controversy surrounding the timetable for its implementation in the Autumn. Watts remains cautious on the timetable, suggesting it’s now become something of a poisoned chalice for the government: “It’s very difficult because there’s always going to be problems introducing something like Green Deal; and because it is such a massive undertaking, the main thrust of the work to date has focused on making sure that financial packages are in place.
“My concern is the need for the industry to have the capability to deliver and is accredited to do so as quickly as possible. The amount of time to do that is less than is needed to meet the secondary legislation in May. But, as with BIM, the market is highly resilient and I think that, in these times, if there is an opportunity, the good firms will make sure that they are in position to do it because they need that income stream.
“While I do not believe there is going to be a capability issue within the industry, getting the technical detail of the legislation right is a major issue… The most important thing is making sure it’s the genuine parts of the industry is getting the work and not the rogue traders because that would be something that would kill the Green Deal off very quickly.”
A good example of how capable and resilient the construction industry can be is the Olympic Park and the legacy it has created, continued Graham: “For me the gold medals in this Olympics have already been won for procurement in its construction, in terms of delivering on time and on budget – fantastic projects, delivered with the health and safety of the construction team as paramount.
“However, the biggest legacy of all will be the Olympic Park itself because of the incredible regeneration that has taken place there. If you visited before 2005 you would have seen a derelict, contaminated eyesore that was a blot on the landscape of London.”
He added: “The actual business of hosting the Olympics is only a miniscule part of it. The Olympics will come and go but all these changes, both to the process of how we procured the Park and the buildings, and the actual landscape itself, will be utilised for years to come.
A new age
As for the future of the industry itself, Graham believes that while the sector has experienced recession over the past couple of years, it is now steering through unknown territory, a new era. “The level of work in 2012 is the level we saw growth in 2007, so there is still billions of pounds worth of work in the industry, but what is most interesting, compared to the last major recession 18-19 years ago, is that back then it was very much the whole industry went off the edge of a cliff and there was very little work being won anywhere, in any sector.
“The issue now is that we have a very patchy situation both regionally and by sector. If you work in certain sectors like rail for example, there is growth. But if you work in other sectors particularly those sectors that rely on public sector money, and I suppose schools is probably the most obvious area, where there has been huge reduction in funding, it’s very difficult at the moment.”
Regional disparities are also very significant in this recession, said Graham: “What we are finding is those companies out there who are diversifying are actually surviving this recession pretty well. London and the South East is a bubble in that there is as much work around today as there was two years ago. It’s only in places such as Northern Ireland and North East, where things are very, very bad, so it’s an incredibly patchy scenario. I don’t think we have ever seen anything quite like this before in terms of different sectors behaving in different ways.”
Graham’s message for the industry is simple: diversify to survive. “If you put all your eggs in the one basket there is a danger that suddenly one day that basket may not be there,” he warned. “Companies have to manage themselves through the recession and a lot of companies just can’t seem to do that.”
This article first appeared in Building Control & Development Services Magazine, Spring 2012. To read the entire publication, click the ebook.