Error reduction essential for industry transformation

The construction industry must improve its productivity, overcome workforce challenges and prioritise sustainability, Fergus Harradence from the Department for Business & Trade (DBT) told GIRI members at the spring members’ meeting. He said the UK Government is committed to developing a sustainable pipeline of work that will provide the opportunities and confidence for the kind of transformation the sector needs to see.

In his role as deputy director for construction, logistics, airports and water at DBT, Fergus set out the challenges for construction in this Parliament and outlined some of the government’s policy objectives and vision for the sector.

Productivity topped his list of challenges facing the industry, and one that hasn’t changed in 100 years. The second is demographic changes. “This affects the industry in two ways. Firstly, there’s the demand for what it produces and how we adapt existing infrastructure and build new buildings and infrastructure that caters for a wider range of needs in society and the larger number of people who will be elderly or living with some long-term health condition that potentially makes them more vulnerable to things like excess heat or cold.

“Then there’s the direct impact. A third of construction workers in the UK are aged over 50. It is reasonable to assume that they will retire in the next ten years. Since 2019, the industry has lost nearly 400,000 workers in the UK and it will be impossible to replace these workers through recruitment, particularly of young people.”

He added that this is a Europe-wide problem and makes the need to improve sector productivity more urgent. It also means the industry must prioritise the wellbeing of its existing workforce, as it is currently losing 450 people a year to suicide. “The industry has to change the way it operates and get better at providing the right sort of environment, training and skills for its employees.”

Cost will be a major driver for change, he said. “Public finances have worsened considerably since the financial crisis of 2008 and what we face now is the challenge of not just building a lot more new infrastructure to replace assets coming to the end of their life, and increasing the number of residential buildings, but we also need to remediate and improve the grade of buildings and infrastructure we have. This isn’t going to be affordable unless we can drive out waste, and error, and stop wasting money through defects.”

He said this government had the most ambitious policies for the sector in 40 years and has committed to publishing a 10-Year Infrastructure Strategy alongside the spending review in June 2025. There will also be a refreshed national infrastructure and construction pipeline. “It will probably have fewer projects, but the intention is that these are projects the government will be committed to delivering and to the timeframe set out in the national infrastructure pipeline.”

He added that the intention is that this will be combined with and support the activity of other key sectors and objectives like energy decarbonisation. There will also be big investments in home building and new towns with the aim of creating a ‘more coordinated and efficient approach to development’. 

“The government has also already taken steps to accelerate delivery through the planning consent system. A bill is likely to be introduced to parliament next month or shortly afterwards that will change the way in which the planning system works to make it easier to move developments through the process and get the consent they need.”

Other commitments include the creation of a National Infrastructure and Service Transformation Authority to create a body at the heart of government responsible for project delivery, and investment in sectors such as water, which  will provide an opportunity to drive transformation and embed efficiencies and productivity improvements.  

Fergus said there would be parallel developments in home building as the government is committed to delivering a 1.5 million new homes this Parliament. “To facilitate this we have seen the restoration of mandatory housing targets, the requirement for local authority development plans, and are looking at how we can fast track planning for brownfield sites.”

Other measures include the recruitment of more planning officers, the redesignation of some green belt land as grey belt, and the anticipated report from the New Towns Commission on locations identified for major development. 

Energy and retrofit are other priority areas, and Fergus said there is a lot of investment going into the energy sector to support onshore wind and solar, a plan to upgrade to five million home this parliament as part of the Warm Homes Plan, the Future Homes Standard to improve the performance of new homes, and the requirement for private rental homes to meet minimum energy efficiency standards by 2030. “This is an opportunity for the industry to use a sustainable pipeline of work to improve its performance.”

The other big driver for change is the need to reduce carbon emissions and make the industry more sustainable, which is linked to productivity, efficiency, and waste minimisation. Fergus said that the requirement for whole life carbon assessments has proved successful on some projects and the government is looking at how to drive that further through standards. “We are working closely with industry on how to reduce carbon in construction and decarbonise materials like cement and concrete through projects such as the low-carbon concrete route map.”

Biodiversity net gain targets will remain, and the creation of a national Nature Restoration Fund is intended to reduce the burden on developers and generate more funding to invest in nationally significant projects. “This is an area where the construction industry has an enormously important role to play. It is possible to develop even very large-scale developments that have a nature-positive impact and do less damage to the environment.”

Fergus also expressed the hope that some of the money saved by streamlining the planning process can be invested back into industry capability and help move the sector on from the antagonistic relationship between developers and local communities that has characterised it for 40 years. 

This vision for the built environment requires significant investment in digitisation and reporting of information and the adoption of new tools like AI, big data analytics, and data visualisation, said Fergus. He said the government is interested in investing in a range of different technologies to achieve a more efficient, effective and interconnected built environment. “This is the vision we are trying to embed in government programmes.”

It’s one that he believes will have a big impact on the construction supply chain, making it less hierarchical. “We will likely procure from a much smaller number of suppliers who are primarily offsite manufacturers… Much more of the valued-added work will be done in offices and factories in controlled environments with a minimum amount of work done on site, and all of this will be guided by a digital model and enabled by real-time data flows between all the these different organisations involved, so we will know what is happening when, where and why and we will be confident that projects are being implemented in the way we want them to be.” 

For upcoming members' meeting dates, check our event calendar.