Brendan Millgate and Lee Bentley recently attended a presentation given by Mark Farmer on his October 2016 Report ‘Modernise or Die: The Farmer Review of the UK Construction Labour Model’, which was hosted by the Cambridge Forum for the Construction Industry.
The report was issued by Mark Farmer at the request of the government, through the Construction Leadership Council, to identify actions to reduce the industry’s skill shortages and structural vulnerability. The report sets the industry a challenge to do things differently; to reduce the reliance on building in the same way that we have for hundreds of years. During the presentation Mark Farmer noted that we have a ‘burning platform’ and could see a 25% decline in the available workforce over the next 10 year, so we need to act. We also have a ‘reliance on a migrant workforce in an increasingly uncertain post Brexit world.’
The report outlines 10 critical failings of the industry which suggests that if the industry continues with its ‘survivalist’ shape, structure and set of commercial behaviours, a tipping point is likely to be reached and the failings will only worsen. These failings include:
- Low productivity
- Low predictability
- Structural fragmentation
- Leadership fragmentation
- Low margins and adverse pricing models
- Workforce size and demographics
- Lack of collaboration and improvement culture
- Lack of R&D and investment in innovation
- Poor industry image
There are three key themes at the heart of the Farmer review recommendations:
- The need for clear leadership and institutional reforms that better integrate clients, industry and government
- A productivity led change agenda letting innovation dictate future skills development and which clients and the supply chain can either lead or respond to
- The critical role the government has to play in the strategic initiation of change across both of the above.
It is critical that the industry recognises the need for change and resists the ‘business as usual approach’. The ‘industry will not change itself’ and needs to be driven by the government in a regulatory and strategic way, as well as by clients changing needs and behaviours. The 10 headline recommendations from the report are as follows:
- The Construction Leadership Council(CLC) should have strategic oversight for implementing the recommendations
- The Construction Industry Training Board(CITB) should be comprehensively reviewed and reformed
- A reformed CITB should reorganise its grant funding model for skills and training aligned to a future modernised industry
- Investment in research and development and innovation in construction by changing commissioning trends from traditional to pre-manufactured approaches
- A comprehensive innovation programme to define key measures of progress and report regularly against these
- A public-facing story and image for the holistic ‘built environment’ process, including an outreach programme
- Government willingness to intervene to help establish and maintain appropriate skills capacity
- Government should promote the use of pre-manufactured solutions in the housing sector
- Government should assemble and publish a comprehensive pipeline of demand in the new-build housing sector
- Government should consider a behavioural deterrent scheme similar to the ‘carrier bag charge’; taxing businesses that buy construction work in a way that doesn’t support industry innovation or skills development
Only time will tell if the Industry takes action and responds to the report. For more information see the full report here.
If you would like to find out more about the presentation by the Cambridge Forum for the Construction Industry please contact Brendan Millgate.