improve planning & delivery
Fixing our Broken Housing Market
This is the title of the Department of Communities and Local Government (DCLG) White Paper, issued on 7th February 2017. Highlighting a path to improve housing supply, it implicitly criticises the construction industry’s failure to deliver. While recognising some of the industries risks, it fails to show how these may be redefined to encourage growth.
DCLG’s Basic Economics
In a recent issue of Construction Manager, Assad Maqbool considers the papers reference to “Low levels of house building means less work for everyone involved in the construction industry.” This, he states, fails to consider that economies of scale are lost because of low throughput. It overlooks the fact that bidding for limited work and spreading small margins across few projects is inefficient, incurs costs that must then be factored into successful bids.
Appoint Construction Team Early
Doing this before significant bid costs have been incurred, and working through the pre-construction phase under contract avoids the present reality that only the larger companies can sustain appropriate bids teams. This highlights another White Paper point that construction is “too reliant on a small number of big players”. The expectations placed in the procurement process on smaller contractors and developers tends to marginalise their opportunities.
Addressing Prequalification Nonsense
Turnover tests as part of pre-qualification, for example, intended to protect clients from insolvency risk arbitrarily cut out small- and medium-sized players. Instead government could focus on performance bonds and latent defects insurance protect clients of smaller contractors and developers. It totally overlooks this in vaunting Cherwell District Councils ‘Transformational’ Graven Hill Village Development Company of 2,000 self-build and custom-build scheme.
Modernise or Die
Citing the Farmer Review of the UK construction labour model, Modernise or Die, (October 2016), that efficiency can be gained by promoting premanufactured solutions and offsite building, it talks about the Buildoffsite Property Assurance Scheme. This is a process of accreditation carried out by Lloyd’s Register to provide assurance to lenders in relation to “innovatively constructed projects”. It fails to address the security needed for purchasers to buy into and lenders to fund such a scheme.
Graven Hill Example
Maqbool instances Cherwell’s recognition of the need to engage with the planning framework to ensure that it is “more supportive of higher levels of development”, but argues that some focus should be given to the work that it has done in creating local development orders that support innovative delivery. This, he continues shows that there is scope to improve the planning and delivery framework such that a more diverse range of construction providers can meet a gap in supply.
Construction’s Failure to Deliver
Repeatedly returning to this contention, the paper fears a lack of skills, renewed training programmes to “address skills shortages by growing the construction workforce”, about the investment needed to modernise, innovate, and become more efficient. Recognising that the risks of “building at scale” are a disincentive to investment, it overlooks the fact that this is the same for investment in skills.
Need to Share the Risk
Maqbool suggests that government should encourage contracting authorities to share development risk and to create longer-term relationships with construction partners. This would enable a longer-term view on investment in innovation and skills. It should also buck the trend of one-off lowest-cost tendered projects by encouraging the use of long-term strategic alliancing contracts and frameworks agreements at all tiers of the construction industry supply chain, which encourage investment.
Assad Maqbool is a partner at Trowers & Hamlins specialising in projects and construction. Read full article
Continuous Product Improvement
What Maqbool and the White Paper overlook is the need to integrate design with manufacture. The whole process of designing for, engineering, manufacturing and building ‘Off-Site’ manufactured houses, has to be a process of continuous product improvement.
Short Run Pre-Fabrication
As long standing Chartered Building Consultants (CIOBC) this forms part of our approach to pre-fabrication. It helps us deliver the high quality homes that architects and their clients want at prices they can afford. Using computerised modelling and all that goes with it, we are making small batch off-site fabrication of compound elements increasingly possible. With much of our production being based around timber, SIP, or CLT panelised elements, the increasing use of 3D and BIM modelling is at the heart of our processes. Not only does this help to achieve greater economy, it also makes for greater safety. We welcome approaches for the development of new ideas and methods.