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Boosting construction productivity could deliver £15 billion savings every year

New plans set out by the Department for Transport will revolutionise British infrastructure and boost the construction sector’s productivity in a move that could generate savings of £15 billion a year.

The plans were revealed alongside the National Infrastructure and Construction Pipeline, which sets out projects for the next 10 years.

This £600 billion pipeline includes both public and private investment. It will give certainty to industry that there is great appetite to develop infrastructure and will encourage the sector to invest in the right technology and skills to meet this demand.

The Transforming Infrastructure Performance programme sets out how the government will ensure these projects are delivered swiftly and efficiently. It contains ambitious plans to transform infrastructure delivery over the long-term, using the government’s influence to drive modern methods of construction so Britain can lead the world in high-tech building. The Transport Infrastructure Efficiency Strategy sets out how these lessons will be applied to drive efficiency and productivity in transport.

Andrew Jones MP, Exchequer Secretary to the Treasury, said “We are backing Britain with a record amount of infrastructure investment as we build an economy fit for the future. That’s why we’re working with the industry to skill up and scale up for the challenges ahead.

“Investing in infrastructure boosts productivity for the economy as a whole. The scale of the investment we are talking about here will deliver a step change for our country.”

Transport Secretary Chris Grayling said added “We’re undertaking the most ambitious improvements in our transport network this country has seen for decades. But we must also drive forward plans to ensure these infrastructure projects are completed on time and on budget.

“World-leading projects such as Crossrail, the Ordsall Chord and the huge investment programme in our major roads show that Britain can deliver on time and on budget, boosting jobs and growth and creating new opportunities across the nation. But we want to do better. This strategy shows the way and sets out our standards for how we will do more and better in future.”

The government is a major player in construction and delivers many projects every year, such as transport, schools, prisons and hospitals. This accounts for a quarter of all construction projects, and using this purchasing power will enable ministers to drive innovation and encourage firms to invest in modern methods and technology.

Methods such as off-site manufacturing, where projects are part-constructed before being assembled on location, can boost productivity by reducing waste by 90% and speed up delivery times by more than half (60%). For example, a school that typically takes a year to build could be done in just over 4 months.

The announcements tackle this head on and give the sector the certainty to start investing in the right technology and skills.

Tony Meggs, Chief Executive of the Infrastructure and Projects Authority (IPA), said “Publishing our Transforming Infrastructure Performance (TIP) programme demonstrates our commitment to tackling the annual £15 billion productivity gap in construction. The IPA has a significant role to play in helping to create a more productive and innovative sector.

“We want to maintain confidence in the sector and will work alongside industry, using our purchasing power to drive the adoption of modern methods of construction in both new and existing infrastructure. The scale of ambition is great but by aligning our initiatives we can work with industry to deliver transformation for the sector.”

Andrew Wolstenholme, Co-Chair of the Construction Leadership Council (CLC), said “The Transforming Infrastructure Performance programme presents a huge opportunity for the industry and government to reap the economic gains from improving productivity during the delivery of the UK’s £600 billion infrastructure pipeline. Transport is a huge part of that.

“I am delighted that the IPA, DfT and CLC are working closely to encourage construction clients to procure on the basis of whole life value, deliver more industry led innovation, develop the skills we need for the future and give the UK a competitive advantage in exporting new technologies and expertise. I am proud to chair the Transport Infrastructure Efficiency Taskforce which will ensure these strategies are brought to life across the transport sector.

“It all adds up to better economic and social infrastructure, as well as more homes, delivered quicker, at better value and more sustainably than ever before, underpinning the UK’s growth and providing jobs all over the UK.”

 

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Global standards vital to boosting infrastructure investment

The adoption of regulated internationally recognised standards can increase the UK’s ability to attract private infrastructure investment to offset the fall in public sector spending, according to a new paper which was launched by the RICS at the Labour Party Conference today.

According to the paper, the adoption of regulated internationally recognised standards can increase the UK’s ability to attract private infrastructure investment to offset the fall in public-sector spending.

Launched at the Labour Party conference in Brighton at an event attended by Shadow Housing Minister Tony Lloyd, the paper titled “Attracting Infrastructure Investment Through International Standards” sets out the case for using International Construction Measurement Standards (ICMS) to attract private investment in infrastructure projects.

Successfully enticing investors will play a vital role in Britain to mitigate recent contractions in the construction sector as Brexit discussions continue.

With the UK’s ageing infrastructure currently depleting and at capacity, and public sector investment set to fall from to 1.4%t of GDP by 2020 – from 3.2% in 2010 – the private sector has a critical role to play in updating and delivering new infrastructure.

ICMS is a key tool in managing investments, providing certainty to industry and attracting investment.

Revenue generating projects

The paper also calls on government to take a more proactive role in supporting infrastructure by identifying projects that will generate revenue, providing guarantees to minimise investor risk during the construction phase and providing certainty by seeking cross-party support for projects.

Mo Rahee, RICS Infrastructure Policy Manager said “Like the International Financial Reporting Standard, the International Construction Measurement Standard provides a level of certainty – through transparency – to investors. Effective and accurate reporting of capital expenditure can only benefit the construction sector by providing investors with accurate information that inform their investment decision process.

“Government can also support the sector by identifying projects that will generate long-term revenues and have cross-party support. This will be vital to ensure infrastructure is updated and new projects are delivered.”

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Major Chinese deal to boost Birmingham housebuilding and economy

A deal has been signed between Birmingham City Council and the fifth largest property developer in China to focus on HS2 and deliver homes for Birmingham.

As part of the agreement, which is estimated to be worth up to £2bn to the local economy, the Hong Kong Stock Exchange-listed company Country Garden intend to explore large-scale investment opportunities in and around the city.

The news of this agreement follows this week’s China visit by Prime Minister Theresa May for the G20 summit. Following the referendum result, the government have being investigating the potential for Chinese investment in major UK construction projects..

Council leader Cllr John Clancy commented on the potential that China have to offer, saying “The landscape has inevitably changed post-Brexit and Birmingham is already out of the starting blocks. That’s why I’m here selling our city to many of China’s leading investors.

“This agreement is about bringing good jobs and quality homes to Birmingham. Country Garden have a proven track record of building homes at pace and scale. They have played a major role over the last 20 years, as housebuilders have met the massive demands of China’s rapidly expanding economy.

“Bringing this level of investment and experience to Birmingham would be a massive economic boost to the region’s businesses, skills base and families. It’s about bringing new, big capital spend to the city, quickly. This is about building houses, jobs and futures for young Brummies and families across the region.

“Country Garden understand the demands in Birmingham and are clearly excited at the prospect of investing in our young, growing city.”

Country Garden founder and chairman Mr Yang Guoqiang commented “I have been impressed with Birmingham’s ambition and huge potential and I am delighted to announce this investment commitment to support significant housing and infrastructure development in the city.

“We have a proven track record in delivering quality housing at a scale to match Birmingham’s ambitions and with major projects coming to the city, including the forthcoming High Speed two project, these are exciting times for Country Garden and Birmingham.”

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