Constructing Excellence partnered with Pinsent Masons to convene a group of senior industry stakeholders to discuss and highlight a number of key issues critical to the delivery of the government’s new 10-year Infrastructure Strategy, which are summarised below.
Housing programme: the government’s Long-Term Housing Strategy, due to be published later in 2025, should set out a programme of housing construction to ensure certainty of pipeline to meet this government’s national target of building 1.5 million new houses during this parliament. This will help provide certainty over the longer term. The scale and complexity of the housing challenge requires cross-sector focus. It is essential that strategic partnerships with long-term capital and appropriate funding mechanisms are developed to support a longer-term pipeline of delivery that will support an industry-wide campaign and support an industrialised approach to delivering high quality Net Zero housing.
Planning: use of digital tools could help support the planning process and create a cohesive national approach to spatial infrastructure planning, but there will need to be investment in central and local government to make this happen.
Competency and training: workforce skills and the need to address longer-term structural workforce issues need to be addressed across the construction industry. The Industrial Training Board (ITB) review into the role and effectiveness of the Construction Industry Training Board (CITB), recommended shifting to a whole of workforce focus on competency to drive up productivity and quality by enhancing, supporting and leveraging the wider skills system.
Productivity: construction productivity has fallen by an average of -0.6% each year between 1997 and 2019 according to the Construction Productivity Taskforce. Over the same period, productivity of the whole UK economy rose by 2.8% pa while the productivity of manufacturing grew by 3.9% pa. It now takes a larger workforce to build the same output in real terms, which makes construction more expensive than it need be and has led to a downward spiral of low margins and low investment. Productivity remains a key concern to project sponsors and the industry and should be a key focus. A one percent improvement in productivity across the construction industry can make a huge difference, especially if sustained year-on-year over the next 10 years (if manufacturing can improve by an average of 3.9% each year, why can’t construction sustain a one percent annual improvement). Standardisation and adopting Industrialised Construction could create a step-change in productivity.
Procurement: a change of approach is needed to overcome transactional friction and allocate risk more effectively. There needs to be a greater focus on early design stages to maximise positive outcomes, as well as ensuring that the right skills are in place across all parts of the value chain. Constructing Excellence’s Value Toolkit can help to drive this transformation.
Private investment: the scale of the opportunity presented by the Infrastructure Strategy needs to be articulated clearly to investors alongside practical and deliverable models demonstrating how this opportunity will be realised.
Infrastructure Pipeline: creating visibility and certainty in the pipeline is critical to the success of the Infrastructure Strategy. Providing greater certainty for investors, infrastructure developers and contractors is essential.
Role of NISTA: NISTA needs to be empowered to drive change and momentum on projects and foster greater collaboration between central and local governments to avoid operational silos. Sharing best practice and widening industry knowledge will support greater efficiency.
Instilling confidence in construction and improving public perceptions is essential. Major projects are a shop window for the construction industry and can cause disproportionate reputational damage when they aren’t delivered to budget or on time. As an industry, we must reclaim the narrative around infrastructure to showcase the economic and social benefits that projects deliver which often get missed amongst negative headlines.
Climate change and embodied carbon must be tackled directly by the industry. The Infrastructure Strategy rightly focuses on the clean energy transition to help achieve net zero but does not deal with the huge amounts of carbon embodied in new construction, which typically accounts for 60% of the lifetime emissions of new homes built today.
Over the coming months we will be convening more key stakeholders to explore the core topics in further detail.
