Costing our construction industry?











The recent furore over the Government’s decision to award the contract for the post-Brexit, blue British passport to a French-based business is understandable. So, however, are the reasons for the Government’s decision – the savings are considerable. And of course, as a nation, post the divorce, we wish to maintain an amicable and productive trading relationship with EU countries. Why not start as we mean to go on with a very public statement of our intent?
But the story has another side. By choosing to award the contract to an overseas supplier, is the Government undermining the prospects of home-grown industries? We are entering a challenging era and cannot afford for our industries to collapse.
One of Britain’s key industries is construction. It makes up over 6 percent of the UK’s GDP and employs around 9 percent of the workforce. With major infrastructure projects underway across the country, the sector is still growing, but if you’ll pardon the pun, are its foundations solid?
The collapse of Carillion rightly raised questions in Parliament. It exposed a level of fragility that few outside the sector would have thought existed. And that fragility was obscured by how complex the business structure had become with a mesh of subcontractors extending right through to the very smallest firms – often the ones with most to lose. These are businesses built over generations, employing sometimes whole families or significant proportions of local populations. They are the building blocks of our national economy.
We have become a society where cost becomes the determiner in the awarding of contracts – again and again. But cost is only part of the equation. Value is far more critical, and value is a far wider measure. It embraces quality, deliverability and long-term performance. Is also encompasses a key issue that doesn’t get enough attention – sustainability. Not sustainability in terms of carbon footprint or renewable resources, but the sustainability of viable contractors and the sector as a whole. Is it worth saving a few millions if the cost is company failures and a massive bill for the nation’s economy?
New technologies, materials and methods are driving change in construction. They can improve efficiency and attract clients, but they demand both vision and investment. And investment isn’t an option for a business barely scraping a profit or shored-up by loans with punitive interest rates.
Unfortunately, for many firms, this is the day-to-day reality. A huge part of our economy depends upon businesses that are managing a risky position rather than developing a secure long-term growth strategy.
Our construction industry matters because infrastructure matters. Without it, our economy cannot grow, and our societies will suffer. We need the courage to admit that, sometimes, spending a little more on a contract might be the right thing to do.