Thought Leadership: Construction 2025

In 2011, the Government published its Construction Strategy which set out clear objectives to promote efficiency and reform in Government construction, alongside innovation and growth in the construction sector.  The strategy called for profound changes in the way government and industry work together to achieve these aims.  In response to this, Government has worked with industry to develop a long term vision resulting in the publication earlier this month of ‘Construction 2025’, a strategy which is billed as a partnership between Government and industry setting out a vision and plan for long-term strategic action by Government and industry to continue to work together to promote the success of the UK construction sector with focus on key growth markets in smart technology, green construction and overseas trade.

 

The overall objective of the strategy is to put the UK construction industry at the forefront of the global market in an effort to achieve and deliver significant growth. With the global construction market forecast to grow by over 70% by 2025, the strategy sets out its vision for the industry to exploit its strengths in the global market to ensure British companies are well placed to take advantage of the opportunities being created by changes in the international market.  

Construction 2025 does not replace the 2011 Construction Strategy but rather supplements it, building its foundations and the Government’s Plan for Growth giving it a broader momentum to drive lasting change through reform.  It outlines the vision for a more attractive and technologically advanced industry that through integration and collaboration will allow the construction industry to grow sustainably and make a long-term contribution to growth in addition to mapping out an action plan for delivering this.  The Strategy envisages clear benefits for industry from the realisation of these aspirations by delivering better, faster, cheaper and greener products for the industry’s clients. 

However, the aspirations are lofty to say the least and the ambitions for 2025 are deliberately stretching. Through Government working in partnership with the industry the strategy is built around achieving four headline objectives by 2025:

• Lower costs: a 33% reduction in initial costs of construction and the whole life cost of built assets
• Faster delivery: a 50% reduction in the overall time from inception to completion for new build and refurbished assets
• Lower emissions: a 50% reduction in greenhouse gases emission in the built environment
• Improvement in exports: a 50% reduction in the trade gap between total exports and total imports

While the drive towards lower costs is nothing new, a 20% reduction by the end of this Parliament having already been identified in the 2011 Government Construction Strategy, the industrial strategy stretches the target to 33% albeit over a longer period of time. 

Building Information Modelling (BIM) is inevitably a key thread running through the strategy and is one of the mechanisms by which the Government hopes its efficiency targets will be met. The strategy reiterates the move to BIM Level 2 by 2016 as well as targeting Government and industry moving to Level 3 BIM between 2016 and 2025. The commitment to supporting the industry in implementing BIM remains. 

Achieving a 50% reduction in greenhouse gas emissions to meet the strategy’s low carbon and sustainability objectives relies heavily on a successful delivery of the Green Deal to improve the existing housing stock. There is no doubt of the potential of Green Deal to reduce emissions and to provide employment over a significant time period but the Government’s own figures on its take up are not encouraging. Much will also depend on the work of the Green Construction Board, which has identified the areas of greatest potential opportunity for the industry. However, moving towards the 50% reduction target in the strategy in addition to the longer term targets of the Climate Change Act will require clear leadership from Government and private sector construction clients.

The strategy acknowledges the important role clients must play in transforming the construction industry thereby aligning it with the commitments made in the Government Construction Strategy in 2011. It is perhaps surprising therefore, that the proposals in this area are not more robust, although the Government is pressing on with a number of trial projects assessing three new models of construction procurement (Two Stage Open Book; Cost Led Procurement; and Integrated Project Insurance.) 

Allied to this is ensuring the industry retains a diverse and resilient supply chain and it won’t come as any surprise the strategy identifies access to finance and cash flow as significant ongoing issues for the industry. Project Bank Accounts and Supply Chain Finance Initiatives are two key mechanisms that the strategy champions to address these issues. 

It is encouraging that the strategy recognises the need for investment, both financial and political, in training and development activities. After all, the industry needs good people and a robust framework to attract and retain new entrants. The strategy will be followed by the publication of the Government’s implementation plan for apprenticeships later in 2013 which should provide further impetus along with proposals for a more strategic approach to Continuing Professional Development. 

The ultimate test of the success of the strategy will be whether it delivers against the challenges is sets for both industry and Government. This will be predicated on strong leadership. Driving the delivery of the “Construction 2025” action plan and its strategic priorities will be the Construction Leadership Council, a joint Government and industry body. The Leadership Council will take the reins in driving forward the changes although actions will be owned and delivered by industry bodies with accountability for their implementation to the Council.

Clearly, some of the responsibility lies with the industry itself. After five years of being buffeted by the global economic storm there are growing signs that the outlook is becoming more favourable. In this respect the strategy can be seen as a real opportunity for the industry to grasp and what the sector looks like in 2025 will come down to how industry embraces this roadmap for change.

More Information

The Industrial Strategy: https://www.gov.uk/government/publications/construction-2025-strategy


You can join our webinar to learn more all about the strategy here 
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