Construction Industry Council

Cutting Costs with Joined-Up Government

What would you do without a construction industry? Think for a moment and it will quickly become apparent that it is a vital industry for the economic and social wellbeing of the nation. It involves the planning, design, building, management and maintenance of our national infrastructure. The latter includes the houses we live in, the means of producing, distributing and selling the food we eat and the clothing we wear, the roads and rail we travel on, the offices and factories we work in and our hospitals and schools. We spend more than 80 per cent of our lives inside buildings and most of the remaining 20 per cent of our activity is only made possible because of other aspects of our built environment.

It is a huge and complex industry and, as a result, it can easily seem fragmented. We often speak of planning, architecture, engineering, surveying, construction, project management, repair and maintenance and so on, as if they were entirely discrete and mutually independent services. House building, civil engineering and building are usually seen as quite separate industries.

This perceived fragmentation becomes most evident in the number of trade and professional bodies within the industry. There are more than 50 separate bodies concerned with the production, science and application of cement and concrete. I don't think anyone actually knows just how many bodies there are covering the whole industry but it is certainly in excess of 500. Putting this into parliamentary terms, there were 18 separate all-party parliamentary groups concerned with some aspect of the built environment in the last Parliament! In this context, it is not surprising that the construction industry attracts so few parliamentarians in terms of being a special interest.

To cope with this diversity, the industry has developed a representative structure of 'umbrella bodies'which bring together groups of organisations in a particular sector. For example, a new Alliance of more than 50 cement and concrete organisations is to be launched in September 2003.

The Construction Industry Council (CIC) is the largest umbrella body with the widest reach, embracing the professional bodies, consultants and specialist contractors' business associations, research associations and other standard-setting organisations. It has around 60 member organisations which themselves have a collective total of around 500,000 individual members and 25,000 firms. Since the CIC itself is not a trade association and represents bodies across the whole spectrum of the built environment (including clients), it is able to discuss issues in an impartial forum, independent of any particular vested interests.

The CIC works in close association with the Strategic Forum for Construction (for which it provides the Secretariat) and the Commission for Architecture and the Built Environment, particularly in terms of promoting design quality as a means of enhancing the value of the product. It also works with the Construction Industry Training Board, with whom we are joint Partners in establishing the new Construction Sector Skills Council.

Politicians often complain, with some justification, about the fragmentation of the construction industry. But where the industry's response to this problem has been one of continual rationalisation over the past ten years, the fragmentation of government as it relates to the built environment has grown progressively worse over this period.

It is reasonable to expect that the government should face the construction industry in three ways: as a sponsor, as a regulator and as a client. In fact, it faces the industry with more heads than the Hydra and many of them speak in contradictory tongues! This problem is particularly evident in the regulatory and client roles.

Whilst government policy promotes and extols the advantages of 'joined-up government', the latter scarcely exists in terms of a relationship with the construction industry. The sponsorship role has been greatly diminished under Labour and is now just a small unit of dedicated civil servants within a larger business support unit of the DTI. It has no more than one-tenth of the civil-servant cohort that was working within the same unit of the old Department of the Environment just ten years ago!

And yet construction is one of the largest industries in the UK economy with a turnover amounting to more than £80bn (approaching 10 per cent of the GDP) and employing 2 million people. This is without taking into account the leverage that construction brings to every other sector of the economy. If the UK wishes to move up the world economic league table it can only achieve this through a more competitive construction industry.

It is surprising that an industry upon which the government depends so utterly in order to deliver the improvements it has promised in education, health, prisons and transport infrastructure has itself become so insignificant within the structure of government itself.

Ten years ago, the construction industry could count upon a good portion of the Environment Secretary's time, plus a considerable chunk of a Minister of State's portfolio and an almost exclusive call upon a Parliamentary Under-Secretary of State. Today, the construction brief is carried by a very able Minister in Nigel Griffiths MP but he holds it alongside a diverse set of other responsibilities, including the massive portfolio for Small Businesses.

The effect of this fragmented approach to construction in government is felt in many ways but, perhaps worst of all, in the complete lack of any joined-up thinking in the way that the industry is regulated. There is no doubt that the cumulative effect of this lack of focus in the way construction is regulated adds to the cost of buildings and that, in the end, we all pay for this inefficiency in one way or another.

Earlier this year, the CIC delivered a report to the (then) ODPM Minister, Christopher Leslie MP, highlighting the need for harmonisation of legislation in the regulation of building work. The report was considered necessary in response to the building up of successive layers of regulation, often emanating from different parts of government, without any obvious regard for cohesion and integration with measures already on the statute book.

Setting this in context, there is presently separate legislation in force to deal with building regulations, fire safety, water (both in and out of buildings), gas, health and safety, the design and management of construction operations, planning and different aspects of civil engineering works. The CIC report to the ODPM identified almost 40 separate pieces of legislation still in force today, affecting the whole life of buildings. The responsibility is spread over many different government departments.

To give practical impact to the report, we cite eight case studies illustrating genuine conflicts between the requirements of differing authorities, responsible for implementing the various areas of legislation. These cover conflict between the requirements of the Building Regulations and the London Building Act; between the Planning and Building Control requirements; between the Safety at Sports Ground Act and the Building Regulations; between fire-prevention requirements and building control; between environmental health and building control and between national building regulations and local Acts.

As a flavour of what this actually means, here is an abridged version of just one of the report's case studies:

A large multi-storey office and shopping development with several storeys of underground areas was constructed with four-hour, fire-resistant steel doors installed in compartment walls at basement level to conform to
building-regulation requirements and following consultation with the appropriate enforcement authority.

Two years after occupation by the client, an inspection was carried out by a
fire-prevention officer from the local fire authority, who informed the client that the doors were not required for means of escape purposes and that, in fact, it would improve the situation if the doors were removed, work which the owner then had carried out.

A while later, some further material alteration work was carried out on the building and this again required building-regulations approval from the local authority, whose inspector noticed that the fire doors had been removed. This inspector deemed that the overall fire performance of the development was impaired by the doors' removal and that they should be replaced.

Fit the doors, remove them and then put them back again - all at a total cost in excess of £30,000, which someone (I suspect ultimately the users of the centre) had to pay. This story is not unusual and it is the direct result of an uncoordinated approach to regulating the construction industry, which has worsened over the years.

It should be emphasised that this campaign by the CIC is not about deregulation, once described by John Major whilst Prime Minister as "trying to grasp hold of a greasy pig", but about the essential need for harmonisation and education.

Above all, the CIC wants to make sure that we don't slide any further down this slippery slope and that there is very careful consideration of any further calls for regulation of the construction industry. There should be robust regulatory-impact assessments which must demonstrate the relationship between any proposed new measures and the existing raft of legislation.

The CIC is seeking to reinforce synergies between all the regulations that affect the delivery of buildings and to hammer home the essential point throughout government that all legislation relating to buildings should be considered in the context of whole life needs.

We have also identified a lack of understanding between several of the diverse groups of civil servants and enforcement agencies responsible for the various aspects of regulation. In this context, there is an urgent need for a comprehensive government review of the current legislation affecting buildings in order to produce a compendium.

The report also recommends that the government agencies involved in the regulation of buildings converge into a single agency and that there is a combining of enforcement approach, including the development of common guidelines.

Hand-in-glove with this proposal is the need for a two-stage process of harmonising the regulations affecting the construction process. Firstly, this should address those changes that can be made to regulations with a minimum impact on legislation and then with an overarching new Construction Act, which consolidates and updates all existing legislation and establishes the new, single-enforcement regime.

The proposed Act is intended to ensure that the regulatory control for buildings and construction projects, after completion, follows on seamlessly as a coordinated process. This would also permit the introduction of sustainability-control measures as and when robust versions become available.

This article only deals with the problems the industry and its clients face in terms of the multiplicity of regulations confronting them. There is a very similar tale to tell in terms of the government's role as a client. The Office of Government Commerce (OGC) provides a valuable role in helping to advise different parts of government about how to procure construction work, but there are still very many parts of government that the OGC guidance does not appear to reach. But this is another story for another time!

Copies of the CIC report Regulation for Buildings: Harmonisation of Legislation are available from Rhiannon Pugh at CIC on rpugh@cic.org.uk, by telephone at 020 7637 8692 or from the CIC, 26 Store Street, London WC1E 7BT.

Supplied by courtesy of Graham Watts, Chief Executive, Construction Industry Council (CIC)