As we get ready to leave the European Union, it is vital we ensure our industry is match-fit for Brexit, to ensure we make the most of the opportunities ahead. The construction industry plays an important part, like many other sectors, in helping us achieve this. We have already made real progress on delivering some of our most important construction projects, and are succeeding in establishing the UK as an attractive place for long term investment.
The UK construction sector employs more than 3 million people in the UK and represents approximately 6% of GDP. It is vital the government ensures the right support is in place for the industry. To do this, we established the National Infrastructure Commission (NIC) to give an impartial long term outlook of our future needs. We also created the Infrastructure and Projects Authority (IPA), whose focus on the next 5 to 10 years makes sure this vision is translated into successful project delivery.
This year we have made great strides in many of our long term projects, particularly with the big three H’s: Heathrow, Hinkley and HS2.
Last October, the government announced its support for a new runway at Heathrow. The Department for Transport are currently analysing tens of thousands of consultation responses.
Hinkley Point C has also reached financial close this year and it’s now the responsibility of the contractor and the rest of the supply chain to get on and deliver it.
And for HS2, we have legislated for the first phase. The process for procurement of station designers and rolling stock has started, and the government has announced its preferred route for many of the sections, from Crewe to Manchester and Birmingham to Leeds.
But we should remember that “construction” isn’t synonymous with “mega projects”. Since 2010, the UK has delivered around 3,000 infrastructure projects right across the country, many of which are small but have huge impact on local communities.
One such project is the Alder Hey Children’s Hospital in Liverpool, which won the Prime Minister’s Better Building Award at last year’s British Construction Industry Awards. It showed excellence in design, effective collaboration, and was delivered on time and to budget. It shows just how construction can transform public services and the hospital is already making a huge difference to the young people who depend on its services every day.
However, despite this progress, productivity in the construction industry remains stubbornly flat. Even when delivered on time and on budget, our projects seem expensive compared to global benchmarks.
It is therefore vital that we work with the construction industry to take stock of this. Together we can address this challenge. We know where some of the solutions lie - greater innovation, better training and a more collaborative approach to procurement, just to name a few.
I believe it is time for the industry to modernise. It is clear that modern methods of construction, such as offsite manufacturing and digital construction techniques, must be part of the solution. This will enable us to build at a cheaper cost and in less time.
And we have already started doing this. The government has used this approach in building modular schools. We can now build a school in three months rather than a year, and are now exporting our expertise into international markets.
As we gear up to leave the European Union, the government is committed to ensuring this industry is fit for the 21st century. We will continue to implement the Government Construction Strategy, which aims to deliver £1.7 billion efficiencies and 20,000 apprenticeships by 2020. And the IPA will continue to ensure we improve on the cost, quality and performance of projects.