• Issue 38

  • Jul 2018

The Source

Construction Deal to Close Productivity Gap

Last month, Sir Oliver Letwin produced a draft analysis identifying the causes of significant gaps between housing completions and the amount of land allocated or permissioned on large sites in areas of high demand.

Amongst the potential explanations for this are the effects on build out rates caused by limited supplies of building materials and availability of skilled labour. It was concluded that the increasing move towards so-called modern methods of construction and digital techniques at all phases of design could help a sector that has not reached its full potential due to productivity levels lower than the wider economy.

Forward a month and on 5th July 2018, the government published the delayed Construction Sector Deal, originally announced in the autumn budget on 22nd November 2017, but then delayed following the collapse of Carillion.

The deal, which the government claim is worth £420 million, is intended to transform construction through the use of innovative technologies, increasing productivity and delivering new homes faster and with less disruption. Dubbed as a ‘bytes and mortar revolution’, it will promote the use of digital design and offsite manufacturing to transform construction and provide 1.5 million new homes by 2022. There will also be a strategic shift towards whole life asset performance which will move focus from the costs of construction to the costs of a building across its life cycle, particularly its use of energy.

The Sector Deal provides a framework to help deliver:

  • a 33% reduction in the cost of construction and the whole life cost of assets;
  • a 50% reduction in the time taken from inception to completion of new build;
  • a 50% reduction in greenhouse gas emissions in the built environment – supporting the Industrial Strategy’s Clean Growth Grand Challenge; and
  • a 50% reduction in the trade gap between total exports and total imports of construction products and materials

Andrew Wolstenholme, Co-Chair of the Construction Leadership Council said: “We are an industry that must be at the forefront of the UK’s drive for future growth and prosperity – and I’m confident that this deal will help to achieve that.

“We have a golden opportunity to reap economic gains from improved productivity and the more efficient construction of assets, creating high-skilled, well-paid jobs in all parts of the UK and driving up exports to the global infrastructure market.”