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Industry partners with government for £420m Construction Sector Deal

SEC Group has broadly welcomed proposals outlined in new strategy, but warned of need for new policies on payment and policing of standards to prevent another “false dawn”

The UK government is partnering with the construction industry to invest up to £420m in pushing new technologies, offsite manufacturing techniques and digital building design onto the market as part of a new Construction Sector Deal unveiled today.

The strategy is intended to create 1.5 million new homes over the next four years, while also supporting previously announced decarbonisation ambitions to half energy use in new buildings by 2030.

While industry bodies have welcomed proposals in the deal, the issue of who will take responsibility for policing regulations and standards remains a major concern over realising the long-term effectiveness of the government’s plan.

The same industry experts have therefore urged authorities to introduce new regulatory body to oversee compliance in public sector construction work as a vital step to ensure the success of the funding deal after the failure of previous sector deals. Payment reform and stricter licensing across the industry have also been identified as urgent priorities to ensure lasting change, particularly on the back of concerns about enforcing best industry practice following the Grenfell Tower fire and the collapse earlier this year of Carillion.

The £420m funding figure set out by government to support the Construction Sector Deal will include £250m of finance expected to come from industry itself. This money will be facilitated via the Industrial Strategy Challenge Fund that was launched by government to provide up to £4.7bn into research and development, according to the government.

Business and Energy Secretary Greg Clark said in a statement that over half of the national economy relies on the built environment and key functions such as heating and temperature control.

He said that construction, energy, manufacturing and technology companies were therefore being brought to look at new avenues for innovation to improve productivity, energy efficiency and safety considerations in the design of buildings and key systems.

Mr Clark argued that the deal represented the largest government investment in the construction sector for at least a decade.

He said, “As buildings account for around 30 per cent of total emissions, we also want to ensure that we are at the global forefront in designing and building smart, energy efficient and affordable homes and buildings through the Clean Growth Grand Challenge, saving families money on their bills.”

Part of the investment strategy will look at new construction materials and techniques to cur the time required to put new buildings in place for domestic, educational and commercial purposes in a way that is more energy efficient.

This would also consider offsite construction methods.

Government will also work with the CITB to focus on ensuring sufficient training and skills programmes are in place to meet changing industry needs.

A statement from the Department for Business, Energy and Industrial Strategy said, “With a third of the industry’s three million workers aged over 50, the Construction Sector Deal includes £34 million for expanding innovative construction training programmes across the country to up-skill the existing workforce and a commitment to increase the number of apprenticeship starts to 25,000 by 2020.”

“Government will work with industry to prepare for implementation of new construction T-Levels by supporting the sector to offer high quality construction industry placements.”

Industry response

Several associations have welcomed the announcement of the deal and its ambitions, while urging policy makers to establish clear mechanisms to tackle what it called “abusive” practices in construction.

Rudi Klein, chief executive of the Specialist Engineering Contractors (SEC) Group, cautiously welcomed the key proposals in the deal as a means to address “fault lines” that had tarnished the image of construction in the UK.

However, he questioned the current capability to deliver on the programme and curb bad practice in industry on the back of a recent review of building regulations and fire safety overseen by Dame Judith Hackitt.

Mr Klein cited similar previous initiatives such as the Construction 2025 partnership between government and industry as failing to introduce much needed transformation in how building services and other key construction functions are procured and managed.

He added, “What we don’t want is another false dawn.”

Mr Klein said that a new approach to enacting and policing regulations was vital to ensure sufficient change in the industry so that standards were being implemented and bad practice was challenged.

He identified policing as one of four key priorities required to improve standards in the construction supply chain.

These other priorities include:

  • Payment reform that ensures more timely transfer of funds for completed work
  • A revised approach to procurement
  • Professionalisation of the industry supported by new system of licensing to ensure competence

Suzannah Nichol MBE, chief executive of construction industry body BuildUK, said the deal was a welcome move to reform construction practices.

She said, “Through Build UK, the sector is already making huge strides to meet the ambition within the deal. The announcement specifically references our standardised pre-qualification process, which is at the pilot stage.”

“We have also brokered cross-industry agreement on the more contentious issue of payment and a commitment from government to develop a, fairer and more sustainable approach to contractual and payment practices will help us. I’m also pleased to see our drive for reform of CITB is embedded as a key part of the strategy, building on the progress already made, which is essential to recruiting, training and retaining the workforce we need.”

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