Industry Insights – November 2020: Refocusing for Recovery

By Jen Heil | November 30, 2020

Welcome to November’s Industry Insights blog. This month, we’re exploring the need for the industry to refocus its attention on the climate emergency – and delivering social and economic value – as an end to the pandemic emerges slowly in our sights. We’ll also touch on what the Chancellor’s latest spending review means for the construction industry and how digitisation is going to play an essential part in the sector’s future.

Spotlight on Getting Back on Track: How the industry needs to refocus during recovery

Priorities in every sector have been driven by the Coronavirus pandemic for the last nine months, as businesses and individuals sought to navigate its challenges and prepare for its impact on every aspect of our lives. In a year marked by uncertainty, many of us are feeling a measure of relief at the promise of a vaccine on the horizon, and are eager to get back to business. But is ‘business as usual’ what we should be aiming for or is there an opportunity to refocus and redouble our efforts as an industry to tackle other global challenges, such as climate change and social inequity?

A year where we have been forced to stay in our homes and in our local areas has made us profoundly aware of our immediate environment – both how comfortable we are in it and how we influence it. Empty roads have given us a new appreciation for cleaner air; travel restrictions have made us grateful for local green space; and spending so many of our days at home has highlighted the importance of considerations such as thermal comfort in our buildings. Similarly, the challenges of the pandemic have exacerbated existing social inequalities, bringing them to the fore of our collective consciousness. In both instances, the built environment – and therefore the construction industry – has a pivotal role to play in addressing these issues.

As Wales launches its second consultation into changes to the Building Regulations Part L and F, the action required to tackle the climate crisis reasserts itself at the top of the agenda. The need for a coherent strategy to address energy efficiency issues in the UK’s current housing stock has long been voiced but the response has been slow to emerge and disjointed, despite being a vital step on the path to net zero carbon. Initiatives such as the Green Homes Grant have highlighted the need for a more robust approach. Intended to inject the industry with green jobs and support increased retrofitting of energy efficiency measures on domestic properties, the scheme falls short of its ambitions with many homeowners unable to find certified tradespeople to carry out the work, and certified tradespeople unable to meet demand within the tight deadline for completing work covered by the initiative.

Despite their manifesto pledge to invest £9.2billion in improving energy efficiency, the government has faced criticism for a continual watering down of their promises, and ultimately a failure to deliver on them. The latest spending review comes under similar fire, with Federation of Master Builders chief executive, Brian Berry, asserting that the lack of any mention of green jobs in the chancellor’s speech was “unacceptable given the challenges we face”. He also noted the failure of the Spending Review to commit to a long-term retrofit strategy, expressing concerns that this will “set the country back”. In response, the industry must not only put pressure on the government to deliver on its promises but must itself also work determinedly and collaboratively to ensure a green recovery.

The climate isn’t the only pressing consideration for the industry. Social inequality has been dramatically highlighted this year, as has the industry’s responsibility to work to tackle it. Delivering social value has been part of construction’s remit for decades but we’re beginning to reimagine what that means, what it looks like in a 21st century world and how we can accurately measure the broader impact of social value programmes.

Exploring how to deliver value as an industry is a central topic of conversation right now, with animated discussions at the Construction Leaders’ Summit 2020 and the launch of the Construction Innovation Hub’s Value Toolkit. Even the government’s updated Procurement Policy Note of September 2020 is specific on the extent to which social value must now be ‘explicitly evaluated’ in all central government procurement – a marked shift from ‘considered’ in its previous iteration in the Public Services (Social Value Act) 2012. Social inequities are perpetuated by a ‘business as usual’ approach to the world. To address this, we have to think and act differently, recognising that what we build and how we build it has the power and potential to improve and safeguard people’s lives as well as the environment.

There is a unique opportunity at this moment to draw the threads of these issues together, shoulder our collective responsibility and begin to strategically address the most pressing concerns of our time. As we sigh with relief at the promise of a vaccine and the beginning of the end of this particular public health crisis, we must remember, as Richard Threlfall observed, that “there is no vaccine for climate change” – nor for social injustice. It’s up to us to get to work, dismantling damaging practices and structures and rebuilding a better future for our planet and all its people.

Spending Review: key points for construction

One of the central promises of Rishi Sunak’s November Spending Review was significant investment in UK infrastructure to stimulate the post-COVID-19 recovery. The Chancellor’s statement included increased commitments for housebuilding, delivering on net zero carbon and the revelation of a new UK infrastructure bank, as well as details about the government’s school and hospital building programme.

Provision of £30million has been made to help deliver the new Building Safety Regime, including funding for a new building safety regulator. Meanwhile, details of the full £12billion ‘green industrial revolution’ were formalised, reaffirming £1.9billion for electric charging infrastructure and £1.1billion to make homes and buildings ‘net zero ready’. A National Homebuilding Fund, aiming to support delivery of 860,000 homes, will have initial investment of £7.1billion and Sunak also reaffirmed the government’s commitment to build or rebuild 500 schools across the UK in the next five years, and 40 new hospitals over the next decade.

Moving away from the current, fragmented landscape of multiple funding streams, a new £4billion, cross-departmental ‘levelling-up’ fund for England has been promised to invest in a broad range of high value local projects up to £20m. It will be open to all local areas in England and prioritise bids to drive growth and regeneration in places in need, those facing specific challenges and areas that have seen less government investment in recent years.

Sunak also announced a new UK infrastructure bank, which will be headquartered in the north of England and will come into operation from spring 2021. With the end of the Brexit transition period looming, there had been concerns around whether the UK would still have access to the European Infrastructure Bank, which helps bankroll a significant number of UK infrastructure projects. The UK infrastructure bank has been set up to help meet that need. Other promises included additional funds to take forward the government’s planning reform agenda and continue the Oxford-Cambridge Arc programme.

The commitments outlined in the spending review were met with cautious welcome within the industry, with celebrations over “exciting” strategy announcements tempered with the call for more to be done to close the skills gap and concern over a lack of focus on green jobs.

The future is digital: tech revolution in the construction industry

Local lockdowns, operational restrictions and global challenges have forced us into new ways of working this year and have emphasised the need for agility within the industry. Digitalisation has long been on the cards, with the construction industry often perceived to be lagging behind other sectors in the adoption of digital tools, but 2020 may just be the year that pushes tech from the periphery into the heart of how the sector operates.

As COVID-19 changed all the rules for day-to-day working, construction companies had to find ways to do more with less – a trend that is likely to continue beyond the end of the pandemic. Digital tools have proven key to increasing productivity, improving transparency and enabling businesses to make data-driven decisions quickly and easily. From cloud-based enterprise resource planning (ERP) systems and intelligent construction specification software, to one-platform sources for communication, the technology that is now available offers the opportunity for construction firms to deliver a seamless, end-to-end customer experience, as well as improving record keeping and inspection practices.

Another huge advantage of this digital revolution is the data-rich information it makes available, which can be analysed and used to inform improvements in future projects. A single, easily accessible source of information is a boon for collaborative working, improving lines of communication, which inevitably improves how a building comes together. As the technology continues to improve, opening up new opportunities for enhanced planning, delivery and communication, it’s time for the industry to embrace the digital revolution and all the benefits it can bring.

 

This will be our last edition of Industry Insights in 2020 – we’ll be back in January with a look back on the year and a look forward to what 2021 might hold.

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