06 September 2017

Influential reports as far back as the 1930s have highlighted the problems inherent in the construction industry but it wasn’t until 2011 that they proffered a solution that could deliver the step change needed. That solution? A package of measures with Building Information Modelling (BIM) at the heart focussed on digital collaboration and achieving best value across the project lifecycle. Here we discuss the two most recent Government Construction Strategy documents that aim to help the industry deliver improved processes and outcomes.

Government Construction Strategy 2016-20

The Government Construction Strategy 2016-20 (GCS16) was published in March 2016 by the Cabinet Office and Infrastructure and Projects Authority (IPA). 

GCS16 should not be viewed in isolation - it coexists with the Construction 2025 Industrial Strategy, which was published in 2013 and sets a long-term view of how industry and Government will, in collaboration, put Britain at the forefront of global construction. 

The strategy also sits among a suite of IPA documents including the National Infrastructure Delivery Plan 2016-21 which draws together Parliament's plans to invest in large-scale housing, new schools, hospitals and prisons and wider regeneration aims.

Download the Government Construction Strategy 2016-20

Aims and objectives

The report recognises the role construction plays in the wider UK economy - output totalling 6.5% GDP or £103bn in 2014 is cited. There's recognition too that construction provides 2.1 million of the UK's jobs. Government is recognised as being the biggest single client and is urged to use this position to drive collaboration and deliver efficiencies and better value for the taxpayer.

The strategy aims to build on progress made in the previous 2011-15 strategy. In this regard it draws on a range of previously communicated commitments and also sets new targets and strategies as it seeks to deliver efficiencies of £1.7bn and 20,000 apprenticeships.

Key areas of focus

  • The Government's role as a key client

With a quarter of all construction output commissioned by the public sector, central government is undoubtedly the construction industry's biggest single client. Asking for the right things, in the right way, therefore has the potential to significantly change the working and efficiency of the entire industry. Engaging early and well with the supply chain and delivering processes geared around collaboration and continuous improvement will reap fullest rewards. The strategy looks at how Government Soft Landings and improved procurement routes can be influential.

  • Digital and data capability is crucial

Digtal technologies and collaboration have the potential to bring significant improvements in productivity and effectiveness. BIM is key here and the strategy seeks to build on the BIM Level 2 journey with increasing maturity towards Level 3. Data-driven decision making can bring significant improvements around costing and carbon impact and offset.

  • Skills and the supply chain

New ways of working require new skills and abilities. Codifying these requirements and delivering the supporting frameworks and standards can help those working in construction really deliver. The publication of the National Infrastructure Delivery Plan 2016-21 is also designed to give certainty and surety of what the industry can expect from its biggest client. 

  • A whole-life approach to construction is required

Driving reductions in whole life cost and carbon is crucial to realising the benefits of increasing collaboration and data-driven decision making. By measuring carbon accurately at delivery and operational stages of a project better decisions can be made. Embedding sustainability at the design stage is also key to getting best results.


Government Construction Strategy 2011-15

The Government Construction Strategy 2011-2015 (GCS11) was published in May 2011. The strategy was the output of the Efficiency and Reform Group, working with the Construction Sector Unit at the Department for Business, Innovation and Skills and Infrastructure UK.

Download the Government Construction Strategy 2011 

Aims and objectives

The authors found that the UK was not getting full value from public sector construction and there was broad agreement from the industry and its customers that construction underperfoms. Procurement was found to be poor and inconsistent and low levels of standardisation. 

The aim was, over the course of a Parliament, to reduce the cost of public sector construction by up to 20% and stimulate growth.

How effective was the 2011-15 strategy?

GCS11 set an intention of reducing the cost of public sector construction by up to 20% by the end of the parliament. It suggested that the public sector accounted for 40% of the total annual £110bn spend on construction in the UK. This means that a 20% saving would have amounted to around £8.8bn a year by the end of the parliament. In 2012, Government Construction Strategy: One Year On Report and Action Plan Update re-framed this figure as 15 to 20% saving, that is, at least £6.6 billion a year. However, GCS16 reported that efficiency savings of just £3 billion were achieved over the entire period 2011-15, well below the target.

The recent Government Construction Strategies are just the latest in a long line of around 70 reports that date all the way back to 1934 that have sought to highlight concerns in the construction industry.

The reports and recommendations from years gone by

Reaching for the Skies (Alfred Bossom), 1934

Bossom's book, Reaching for the Skies, served as one of the first major documented criticisms of the UK construction industry.

Bossom drew on his experience as an architect working in the US. He found that contractors in the US were able to build faster than their UK counterparts and this increased profitability was reflected in higher salaries. Returning home, Bossom saw an adversarial and wasteful construction industry in the UK with construction taking too long, costing too much and failing to meet client requirements. Bossom's view was that construction is a process like any other and order and improved planning and scheduling would reap rewards.

The Placing and Management of Contracts for Building and Civil Engineering Work (The Banwell Report), 1964

Sir Harold Banwell headed a committee including leading industry figures and explored team relationships (in particular the separation between design and construction) and contracts and bills of quantities.

Among the report's key recommendations was the recommendation that a common contract for building and civil engineering be created. It was also suggested that tendered prices be shared anonymously amongst all firms who tendered for a project. 

The recommendations were taken up by many local authorities but there was resistance from industry bodies and the Ministry of Works.

Action on the Banwell Report: A Survey of the Implementation of the Recommendations of the Committee under the Chairmanship of Sir Harold Banwell on the Placing and Management of Contracts. Economic Development Committee for Building of the National Economic Development Office (The Potts Report), 1967

In 1964 The Banwell Report had explored team relationships, construction contracts and documentation and the traditional separation between design and construction. The Potts Report, three years on, was an attempt to address some of the problems in these areas.

Unfortunately Potts' recommendations failed to gain momentum and the industry continued to dominate practice.

Placing and Management of Building Contracts (The Simon Report), 1944

The Simon Committee, chaired by Sir Ernest Simon, was charged with investigating how the placing and management of contracts could improve the construction industry's efficiencies.

At this time design elements of projects were completed before construction contracts were openly tendered. A raft of new procurement methods were being explored resulting in a confused landscape with firms competing under a raft of differing terms and conditions and standards. 

The report was critical of open tendering (as opposed to a pre-qualification process) geared around lowest cost bids where those who were successful would then look to increase their margins by reducing quality.

The report put the case for a more collaborative approach and improved training for construction managers. The requirements of post-war reconstruction meant Simon's recommendations had little impact.

Rethinking Construction (The Egan Report), 1998

The Construction Task Force was set up by Deputy Prime Minister John Prescott and chaired by Sir John Egan. The Task Force published Rethinking Construction in November 1988. 

Egan noted 'the industry as a whole is under-achieving' and believed 'dramatic improvements' would be required. These improvements, it was said, should be focussed on delivering the value customers need and challenge the inherent waste and poor quality outputs arising from existing structures and working practices. Thus, Egan recommended entirely different ways of working and improved collaboration across the supply chain. The report set ambitious 10% annual reduction targets (in terms of both cost and time) and a 20% reduction in defects year on year.

The report was not entirely welcomed by the industry with some expressing concern that drawing parallels between experience gained in manufacturing and construction was not helpful. Egan, himself, speaking ten years after the report's publication, admitted that the impact was patchy with improvement falling below expectations.

Read Rethinking Construction

Constructing the Team (The Latham Report), 1994

Sir Michael Latham was charged with investigating perceived problems with the construction industry.

His report concluded the industry was 'ineffective', 'adversarial', 'fragmented' and incapable of delivering for its customers.

Latham put the case for a client-centred construction process with closer integration and collaboration. His recommendations included government commitment to becoming a 'best practice' client, encouragement for partnering, wider adoption of the less adversarial New Engineering Contract (NEC). 

Latham expected savings of 30% over five years if the recommendations were fully implemented but take-up was patchy and public sector procurement rules proved a stumbling block.

Read Constructing the Team

Never Waste A Good Crisis: A Review of Progress since Rethinking Construction and Thoughts for Our Future, (The Wolstenholme Report), 2009

In 2009, Never Waste A Good Crisis was written by by Andrew Wolstenholme of Balfour Beatty Management for Constructing Excellence.

It was intended to assess the progress that the industry has made since Rethinking Construction and concluded that, ‘Since 1998 we could have had a revolution and what we've achieved so far is a bit of improvement.' The authors noting that 'too often the commitment to Egan's principles has been skin-deep' and going so far as to say that 'in some sectors, such as housing, construction simply does not matter, because there is such limited understanding of how value can be created through the construction process.’ 

Read Never Waste a Good Crisis

Fixing the Foundations: Creating a more Prosperous Nation, 2015

As part of the Summer Budget in 2015 the Chancellor George Osbourne set out an action plan to tackle inefficiences and promote growth: Fixing the Foundations.

The plan clearly set out a stall around the idea that productivity is the challenge of our time and is what makes nations stronger, and families richer. Growth, said the report, comes either from more employment, or higher productivity. Construction was one of the sectors shown to have a significant role to play in realising these ambitions. 

Read Fixing the Foundations

All of which brings us, full circle, to more recent times and the current Government Construction Strategy covering the period to 2020.